Power Only Insurance: Trailer Interchange Explained

Power only is attractive: no trailer to buy, maintain or insure, and steady work from large shippers and brokers with trailer pools. The coverage question it creates is simple to state and easy to get wrong — who pays when the trailer you are pulling is damaged?

Your physical damage policy does not cover it

Physical damage covers scheduled units you own or lease. A trailer belonging to a broker, shipper or another carrier is not on that schedule. Damaging it while it is in your possession creates a direct claim against your business unless a specific coverage responds.

Trailer interchange vs. non-owned trailer

• Trailer interchange responds when a written interchange agreement exists between you and the trailer owner. It is the standard for broker and carrier trailer pools.
• Non-owned trailer coverage responds when you pull a trailer without a formal interchange agreement. Some carriers offer it, some do not.
• Both are usually written at a stated limit per trailer, with their own deductible.

Which one you need depends on your contracts. Many power only operations need both because the paperwork is not consistent across every account.

Setting the limit

A dry van trailer commonly runs $30,000 to $60,000 to replace, and reefer trailers are considerably more. A $20,000 interchange limit does not cover a modern reefer. Set the limit against the most expensive trailer you will be handed, not the average.

Cargo still travels with you

Power only does not remove cargo liability. The freight inside the trailer is your responsibility while it is in your care, custody and control, so motor truck cargo remains part of the program at a limit matched to the loads in those trailers.

Read the interchange agreement before signing. Some make the carrier responsible for the trailer on a replacement-cost basis regardless of fault, which is broader than your policy may respond to.

Documentation at hook and drop

Photograph the trailer at pickup and at delivery — all four sides, roof line, tires, doors and lights. Existing damage disputes are the most common trailer interchange claim, and photos with timestamps end them quickly.