Do Cargo Trailers Need Insurance? #1

Posted by

According to the National Highway Traffic Safety Administration (NHTSA), 1 out of 10 cargo trailers experience accidents each year, with an average repair cost exceeding $2,500. This makes people wonder, Do cargo trailers need insurance?

No, you are not legally required to have cargo trailer insurance if you’re using it for personal use, however, if you are using it for commercial purposes like for business, then you’ll need to have a cargo trailer insurance plan.

This blog post will give answers to other essential questions like: Is insurance legally required for my cargo trailers? what are the coverage levels for my cargo trailers? factors affecting insurance costs, etc.

However, by the end, you will be equipped with propelling knowledge on the right and worthwhile insurance decisions for your cargo trailers.

Hold on and Read on!

Do Cargo Trailers Need Insurance?

No. Cargo trailers don’t mandatorily need insurance as it is not legally required to have insurance but it is highly recommended because of some unfortunate contingents like damage and theft. However, cargo trailers will need insurance if it is used for commercial services.

Legal Requirements for Cargo Trailer Insurance

While not universally mandatory, understanding the legal requirements for cargo trailers is crucial.

Here’s a breakdown of the requirements:

1. Liability Laws:

Liability coverage for your towing vehicle extends to your attached trailer in most states. This means that insurance will cover your property damage and the injuries inflicted on others according to your policy’s limits if you are the cause of an accident.

However, there are some important points to remember:

  • Coverage limits:

The minimal liability coverage required by your state might not be enough to cover the full cost of damages, especially if you’re towing a valuable cargo. Consider purchasing additional liability coverage specifically for your trailer.

  • Minimum Limits:

States are mandated with minimum liability insurance coverage for vehicles with trailers inclusive. However, because of state variations and differences and how minimal the liability insurance is, they may not be sufficient to cover the full cost of damages incurred in an accident.

There are reasons insurance might not cover the full cost of damages: First is the value of the trailer value. Even a basic cargo trailer can be expensive to replace. If your minimum coverage isn’t enough to cover the trailer’s value, you’ll be responsible for the difference in pocket balance.

Second is the value of your cargo. If you’re towing valuable goods, the cost of replacing them could be more than your minimum liability coverage. Consider cargo insurance to protect your belongings.

  • Weight Limits:

Each state enforces specific weight limits for vehicles and trailers combined. Exceeding these limits can result in fines and your safety endangered. Check your state’s Department of Motor Vehicles (DMV) website for precise figures. 

2. Safety Equipment:

Depending on your location and trailer type, regulations might mandate specific safety equipment like; reflective tapes, brake lights, and safety chains for your cargo trailer. 

Does My Truck Insurance Cover My Trailer? Not sure? Check this out.

3. Licensing and Registration:

Some states require separate registration and licensing for cargo trailers, especially for heavier models. Consult your DMV for specific requirements.

4. Permits:

For oversized or overweight trailers, you might need special permits to operate them legally on certain roads. Investigate permit requirements based on your route and trailer size.

Do Cargo Trailers Need Insurance? - Inspect
Cargo trailers don’t mandatorily need insurance.

Your Need for Cargo Trailer Insurance Based On Commercial Vs Personal Uses

Legal insurance necessities for cargo trailers vary depending on whether you use them for commercial or personal purposes:

  • Commercial use:

If you use your cargo trailer for business purposes (e.g., transporting goods for your company), then you are required to have a commercial insurance policy by law. Most commercial policies offer higher coverage limits and broader coverage than personal policies.

They rarely include features like cargo insurance and coverage for loss of income due to trailer usage disability. Cargo trailers will need insurance if it’s used for commercial purposes.

  • Personal use:

If you use your cargo trailer for personal purposes (e.g., towing furniture, etc.), then it’s not legally compulsory for you to have insurance for it, though we highly recommend that you get coverage as it will protect you financially in cases of damages or accidents caused by you.

Sometimes auto insurance policy might extend coverage to your trailer. However, it’s necessary to check your specific policy and state laws to understand the limitations and consider additional coverage if needed. 

Do you think you need insurance for a travel trailer in California? See this amazing guide and get informed.

Understanding Cargo Trailer Insurance Options

Carefully understanding your insurance types and requirements will help you explore and choose the appropriate coverage options for your specific situation.

Let’s delve into the types of cargo insurance policies:

  • Standalone Cargo Trailer Insurance: This is a separate policy for your trailer. It offers good coverage options and potentially lower rates than adding coverage to your vehicle insurance.
  • Add-On Trailer Insurance: You can add coverage to your existing auto insurance policy for your trailer. This might be convenient but it has some limitations or higher premiums depending on your insurer.

8 Coverage Levels For Your Cargo Trailers:

  • Liability Only: This covers the damage caused by you to others with your trailer.
  • Comprehensive: This covers damage to your trailer from non-collision events like theft, vandalism, weather, fire, etc.
  • Collision: Covers damage to your trailer from collisions with other vehicles or objects.
  • Cargo Insurance: Protects the value of your belongings inside the trailer during transport.
  • Roadside Assistance: Covers towing, tire changes, and other roadside emergencies for your trailer.
  • Medical Payments: Covers medical expenses for passengers injured in your trailer, regardless of who’s at fault.
  • Uninsured/Underinsured Motorist: Protects you if you’re hit by a driver with no or insufficient insurance backup.
  • Personal Injury Protection (PIP): This varies by state. But it covers medical expenses and lost wages for you and your passengers, regardless of who the defaulter is.

10 Factors Affecting Insurance Cost For Cargo Trailers:

The following are the factors that affect insurance costs for cargo trailers:

  1. Trailer Value: Trailers with higher values require higher coverage amounts and this increases insurance costs.
  2. Usage: Trailers used for commercial services cost more than personal use due to it is exposure to higher risks.
  3. Cargo Value: Valuable cargo requires specific cargo insurance and this impacts the cost of insurance.
  4. Location: Premiums vary depending on the risk factors of a state or country.
  5. Deductible: Choosing a higher deductible lowers premiums but increases your out-of-pocket expenses.
  6. Driving Record: A clean driving record can earn you discounts on your trailer insurance.
  7. Coverage Levels: Selecting more comprehensive coverage options will raise the cost of your trailer insurance.
  8. Discounts: Ask about discounts for multi-policy bundling, safety features, or affiliations regarding your cargo trailer.
  9. Claims History: Past claims can significantly increase your insurance cost.
  10. Insurance Company: Insurance rates and coverage options differ between companies, so compare quotes.
  11. Lender Requirement: Your lender may need you to maintain insurance as a condition of the loan if you financed your cargo trailer.

Where to Get Your Cargo Trailer Insurance

Here are options to get your cargo trailer insurance:

#1. Traditional Insurance Companies:

Some of the advantages include:

  • Widely available: You can easily find a local agent representing a major insurance company like Allstate, Geico, State Farm, or Progressive.
  • Brand recognition: Established companies offer peace of mind through their reputation and financial stability.
  • Bundling discounts: You might save money by bundling your trailer insurance with your auto or other policies from the same company.
  • Variety of coverage options: Most major companies offer various coverage levels and add-ons to your specific policy.

Some of the disadvantages you can expect:

  • Limited specialization: Traditional companies might not have in-depth expertise in cargo trailer insurance compared to specialty providers.
  • Standardized coverage: The offered options might not fully address your specific needs or offer solutions for unique trailers.
  • Potential for higher rates: Standard pricing structures might not reflect the specific risks associated with cargo trailers, thereby leading to potentially higher premiums.

3 Examples of Traditional Insurance Companies Offering Cargo Trailer Coverage:

#2. Specialty Trailer Insurance Providers:

Some of the advantages of this option:

  • Specific coverage: They offer more coverage options to suit your specific trailer type, value, and usage.
  • Competitive rates: By specializing in trailer risks, they often provide more competitive pricing than traditional companies.
  • Expertise: Their deep understanding of trailers translates to better risk assessment and potentially lower premiums.
  • Flexibility: They are more suitable for unique needs and offer coverage for non-standard trailers or uses.
  • Specialized services: They offer additional services like roadside assistance to trailer emergencies.

5 Examples of Specialty Trailer Insurance Providers:

  • National Trailer: They cater to a wide range of trailers, from utility to car haulers, and offer various coverage options.
  • Trailinsure: It provides specialized insurance for cargo trailers, horse trailers, and boat trailers, with flexible coverage options.
  • AmeriChoice: They offer customizable insurance for various trailers, including enclosed cargo, food vending, and construction trailers.
  • K&K Insurance: Specializes in insurance for commercial trailers, including refrigerated units and specialized equipment trailers.
  • RT Specialty: They offer care to a broad spectrum of commercial trailers, offering comprehensive coverage and risk management solutions.

How To Lower Insurance Costs on Your Cargo Trailers:

  • Equip your trailer: Many insurers offer discounts for trailers equipped with safety features like anti-lock brakes, security cameras, or tracking devices.
  • By installing wheel locks or trailer alarms. This shows you are taking proactive security measures and can earn you discounts.
  • Maintaining a clean driving and claims-free record for both your vehicle and trailer can significantly reduce your insurance costs.
  • Review Regularly: As your trailer usage or value changes, review your insurance needs with your agent to ensure you have the right coverage at the best price.
  • Combining your trailer insurance with other policies like your auto or home insurance can sometimes lead to bundled discounts.
  • Compare quotes from different insurance providers to find the best combination of coverage and affordability.

10 Safety Tips for Your Cargo Trailers:

 Here are some proven tips for your cargo trailers:

  1. Regularly maintain your trailer brakes, tires, lights, and suspensions to ensure smooth and safe operation.
  2. Use straps, tie-downs, and proper blocking to secure your cargo and prevent shifting during transport.
  3. Distribute your load evenly within the trailer’s weight capacity and follow the axle weight limits to avoid overloading and instability.
  4. Adjust your mirrors to provide adequate visibility of the trailer on both sides and when changing lanes.
  5. Drive cautiously, thereby maintaining adequate following distance and considering the trailer’s added length and braking distance.
  6. Choose secured parking areas with proper lighting and consider wheel locks or security alarms as added protection.
  7. Protect your cargo against weather elements like rain and wind, and adjust driving speed for poor weather conditions.
  8. Know Your Route: Plan your route, avoiding narrow roads with low clearances or weight restrictions.
  9. Educate Yourself: Take a towing safety course or consult resources to learn best practices for safe trailer operation.
  10. Conduct regular inspections of your trailer brakes, tires, lights, and coupling before each trip.

Frequently Asked Questions

[sc_fs_multi_faq headline-0=”h3″ question-0=”Do my cargo trailers need insurance?” answer-0=”Unfortunately, No. While it is not universally mandated, many states require liability coverage for attached trailers, thereby extending the coverage from your towing vehicle. Some factors like usage, lender requirements, the value of your trailer and cargo, and state requirements determines if your cargo trailer will need insurance.” image-0=”” headline-1=”h3″ question-1=”What are the risks of not having cargo trailer insurance?” answer-1=”Your cargo not being under insurance exposes it to several financial risks like accidents, theft, natural disasters, and unforeseen emergencies leaving you to bear the cost of the overall repairs and medical bills.” image-1=”” headline-2=”h3″ question-2=”How much does cargo trailer insurance cost?” answer-2=”The average cost of cargo trailer insurance ranges from $200 to $500 per year, depending on the trailer type and cargo value, frequency of use and coverage levels.” image-2=”” headline-3=”h3″ question-3=”Where can I get cargo trailer insurance coverage?” answer-3=”Both traditional insurance companies and specialty trailer insurance providers offer coverage. However, comparing quotes from both types of providers can help you find the best coverage and value for your specific needs.” image-3=”” count=”4″ html=”true” css_class=””]

Important Recommendations


While cargo trailer insurance is not a legal requirement everywhere, it is paramount as it reduces the financial burden incurred from damages like theft and accidents.

Nevertheless, by understanding your specific needs and insurance options, prioritizing safety as well, and exploring the insurance costs, you can make the right insurance decision regarding your cargo trailers. Consult a qualified insurance broker to help you navigate the legalities, assess your risks, and choose the most suitable coverage for your cargo trailer.

We hope to see you soon as we’ve been able to answer your questions!

Visit us for more insurance-related queries.

Leave a Reply

Your email address will not be published. Required fields are marked *