Do You Need Insurance for Car Trailers?

States require trailers to have liability insurance, but in many cases, this is covered by standard auto policies. However, having a specific insurance policy for your car trailer can help reduce out-of-pocket costs if your trailer is damaged in an accident, struck by an uninsured motorist, or has its contents stolen. All states except for New Hampshire and Virginia do require liability coverage for trailers, but in many cases, your auto insurance provides a measure of coverage for your car trailer.

For example, your policy may provide liability coverage for trailers up to a specific size or weight. However, this liability coverage only applies if your trailer causes damage to another vehicle, to property, or to a person.

If your auto insurance does not cover your trailer and you live in a state that mandates bodily injury (BI) and property damage (PD) coverage, you may need to purchase an additional trailer insurance policy.

Insure Your Trailers to Accommodate Unique Risks

More than 11 million recreational vehicles (RVs) are used across the United States. Some of these vehicles, such as motorhomes, are self-powered, but many are travel trailers, engineless trailers connected to towing vehicles via a hitch and towed to their destination.

Towing a trailer comes with unique risks. First is the loss of visibility. While you can purchase specially-designed side mirrors to extend your line of sight while driving, your trailer creates blind spots beside and behind your vehicle, increasing the potential risk of an accident.

Your trailer may also disconnect from your vehicle. This can occur because of a fault in the hitch assembly itself. It may also happen because drivers forget to use specialized safety equipment such as tow chains or brake-away cables.

In addition, backing up a trailer is more challenging than backing up a vehicle by itself. Combined with the lack of visibility mentioned above, the risk of collision with nearby objects or other trailers increases.

What is Car Trailer Insurance?

Car trailer insurance is insurance that covers non-motorized trailers that are towed by another vehicle. These may include utility trailers, boat trailers, all-terrain vehicle (ATV) trailers, or travel trailers. Because these trailers do not contain motors, separate insurance is not required.

Insurance is required for motorized vehicles, such as motorhomes or bus-type recreational vehicles, since they operate the same way as other vehicles on the road.

States that Require Trailer Insurance

No states require trailer insurance if the trailer is a travel trailer, utility trailer, or other type of trailer used to tow boats or smaller vehicles such as ATVs. If you use your trailer for business purposes, however, you may be required to carry commercial vehicle insurance separate from your existing car insurance.

Additionally, no states specifically recommend trailer insurance policies. Insurance providers, however, commonly recommend that trailer owners purchase some type of trailer insurance to protect against theft, damage, or collisions.

Types of Trailers Covered by Trailer Insurance

Common types of trailers covered by trailer insurance include:

Utility trailers: Utility trailers are typically open-air trailers that allow you to transport other vehicles, such as boats, ATVs, or snowmobiles. These trailers may have guard rails rather than full walls, making loading and unloading cargo easy. They are also lighter than other trailers on this list.
Cargo trailers: Cargo trailers may be similar to utility trailers in size but are hard-walled and fully enclosed. They typically have a set of doors on the back that allow you to access the interior and load cargo. U-haul trailers are an example of cargo trailers.
Flatbed trailers: Flatbed trailers are typically used to move other vehicles or heavy cargo. These trailers often have no side or back rails, making loading and unloading cargo easy. Common use cases include machinery, vehicles, construction equipment, or goods stored on pallets or skids.
Travel trailers: Travel trailers, also called recreational vehicles, include amenities such as sleeping quarters, kitchens, and bathrooms. Several popular types of travel trailers are covered under trailer insurance, including conventional trailers, pop-up trailers, and fifth wheels.

Excluded From Coverage

Self-powered vehicles such as motorhomes are excluded from trailer coverage and instead require an auto insurance policy.

This insurance coverage is designed to protect against the unique risks and challenges that come with owning and operating an RV, such as liability coverage while parked at a campsite, coverage for personal belongings inside the RV, and additional coverage for accessories and equipment attached to the RV. Also, many insurers do not provide coverage if you tow another vehicle that is not on a trailer.

What Does Trailer Insurance Protect Against?

Trailer insurance protects against many of the same perils as car insurance. Some common protections offered by car trailer insurance include the following coverages.

Liability Insurance

Liability insurance covers damages you are liable for if your trailer causes damage to a person or a piece of property. For example, suppose your insurance company determines that you are entirely liable for an accident. In that case, your liability insurance pays 100% of claims made by the other party up to the maximum covered by your insurance.

Liability insurance may apply in cases including:

Accidents where your trailer damages another vehicle or trailer.
Accidents where your trailer causes bodily injury to another person while being towed.
Accidents where your trailer causes bodily injury while on your property. For example, if your trailer jack breaks and your trailer falls on someone’s foot, your liability insurance may apply.

Comprehensive Coverage

Comprehensive insurance provides coverage for damages to your trailer, including:

Vandalism, such as broken windows or spray paint.
Fires, such as those caused by lightning strikes or due to wildfires.
Natural causes, such as tree branches falling on your trailer or hail damage.

Collision Insurance

Collision insurance pays for damage to your trailer that is caused as a result of your trailer striking another object or vehicle. Potential collision insurance scenarios include:

You back your trailer into another trailer while parking.
You damage another vehicle with your trailer while making a turn.
Your trailer strikes an object, such as a concrete post or streetlight.

Cargo Insurance

Cargo insurance covers the contents of your trailer. It may come into play if:

Items are stolen from your trailer on your property.
Items in your trailer are damaged due to natural causes.
Items in your trailer are damaged in an accident.

Uninsured and Underinsured Motorist Protection

These types of insurance reduce your out-of-pocket cost if your trailer is damaged by another party that is not insured or has insufficient coverage. This coverage type may be applicable if:

Another vehicle struck your trailer, and the driver does not have enough liability insurance to pay for your damages.
Another vehicle struck your trailer, and the driver has no insurance coverage.
Another trailer struck your trailer, and the owner does not have trailer liability coverage.

Roadside Assistance

Roadside assistance helps pay for service costs if your trailer breaks down. Common scenarios for roadside assistance include:

Flat tires, which require your trailer to be towed to a mechanic.
Hitch failures that cause your trailer to detach from your vehicle.
Electrical issues that prevent your trailer brake or turn signals from working.

How Much Does Trailer Insurance Cost?

Trailer insurance may cost anywhere from $20 to $75 per month, depending on the type of trailer you are insuring and the coverage you prefer. For example, if you have a liability-only policy for a small pop-up trailer, your costs may be closer to $20 per month. On the other hand, if you have a large, brand-new fifth wheel, you can expect to pay $60 to $75 per month.

Factors That Affect Cost

Several factors affect the cost of trailer insurance, such as:

Type of trailer: The type of trailer you own impacts the overall cost. For example, a 30-foot travel trailer costs more to insure than a 10-foot cargo trailer.
Age of trailer: Both old and brand-new trailers may cost more to insure. Older trailers may be subject to more frequent breakdowns and, therefore, are more expensive to insure. On the other hand, newer trailers may cost more to fix or replace, increasing the total insurance cost.
Total trailer value: The more expensive your trailer, the higher the cost to insure, especially if you have coverage that includes replacement.
Type of coverage purchased: Liability coverage is the least expensive type of trailer insurance. If you increase your coverage by adding comprehensive, cargo, or roadside assistance coverage, your costs also increase.

How to Get Trailer Insurance

To get trailer insurance, start with these four steps.

1. Consider How Often You Use Your Trailer

if this amount of use warrants insurance coverage. For example, if you have a cargo trailer you use once or twice a year to help friends move, it may not be worth purchasing separate trailer insurance. However, if you have a travel trailer you use consistently, it may be worth the cost.

2. Think About Common Use Cases

When would you use your trailer insurance? One common use case is a collision on the highway when you are towing your trailer from one city to another. Trailer insurance could also offset the damage cost if you back up your trailer and strike another vehicle.

3. Assess Your Options

If you decide to purchase trailer insurance, the next step is assessing your options. Here, it’s worth contacting multiple providers to see what type of coverage they offer, how much it costs, and if any add-on coverages are available.

4. Get a Quote

Finally, contact your prospective insurance provider and get a quote for your trailer insurance. To complete the process and purchase a new policy, insurers typically ask you to provide information about your trailer, including its age, weight, purchase price and identifying details such as its vehicle identification number (VIN) and license plate number.

Putting It All Together

While trailer insurance is not mandatory, it can help reduce the amount you pay out-of-pocket if your trailer is involved in an accident or breaks down on the road. The insurance cost depends on factors including the size, type, age, and value of your trailer, but you can expect to pay between $20 and $75 per month for coverage.

Before investing in coverage, consider how often you use your trailer and under what circumstances trailer insurance could be beneficial. If the math adds up, it’s worth evaluating multiple providers to see which can offer the best protection for the best price.

Car Trailer Insurance: Exploring Coverage Requirements and Benefits