Do You Need Insurance for Your Trailer?
It’s relatively easy to hook up a trailer to haul your things around Michigan. In the fervor to get out and enjoy your adventure or build your business, it’s easy to forget about the future.
As good of a driver as you might be, there’s always a risk your trailer will be involved in an accident. Now you have to deal with the damage to your trailer, its contents, and possibly, someone else’s property. Unfortunately, your normal auto policy doesn’t cover a trailer.
Before heading out, take a few minutes to understand your insurance needs. Consider the legal requirements, what kind of coverage is available, and what happens if you are involved in an accident.
Does Michigan Require Trailer Insurance?
Let’s start by tackling what is required by law when it comes to owning and towing a trailer. First, every trailer, regardless of type or size, must be registered and plated. Failure to register your trailer is punishable by up to a $100 fine and/or 90 days in jail.
Regarding insurance coverage, it depends on how many tires are on the trailer. According to the Michigan Code MCL 500.3101(1); 500.3101(3)(i), a motor vehicle is anything designed to operate on the state's roadways that is powered by “anything other than muscular power,” and has more than two wheels.
Therefore, if your trailer has a dual axle, you’ll need to take out a policy to tow it legally under the No-Fault law. A single-axle trailer, on the other hand, does not require a policy. However, just because it isn’t legally required doesn’t mean you shouldn’t take out a policy. Let’s look at what kinds of coverage is available, and what happens when you have coverage if your trailer is involved in an accident.
Types of Coverage Available
Just like your car, there are different types of coverage you can opt to purchase for your trailer. This includes collision, personal liability, comprehensive coverage, replacement cost, and contents coverage. If you tow your trailer for a business, you’ll need to purchase commercial trailer coverage.
Just like any other motor vehicle, collision covers any damage resulting from a collision. Remember, if you hit one of the many potholes around the state and cause damage to your trailer, this is still considered a collision.
Comprehensive coverage deals with any damage while the trailer is parked. This includes vandalism, theft, and storm damage, including hail.
Replacement cost coverage guarantees the replacement of your trailer with a similar model once you’ve hit your deductible. Finally, liability is something to make sure you consider when choosing your coverage. Trailers are subject to various failures that can cause a collision, which would be covered by liability insurance.
What Happens If Your Trailer Is Involved In an Accident?
What happens when your trailer is involved in an accident? If your trailer is covered by a valid insurance policy, your insurer will cover damage from the accident.
If your trailer is considered a motor vehicle because it has more than one axle, then you may also have the option to file a mini tort claim.
A mini tort is a special type of claim to make the at-fault party pay for part of the damage to your trailer. These are often covered by the liability insurance of the person who is at-fault in the accident. The maximum coverage available is $3,000 under the current law, which went into effect in July 2020.
Are the Contents of the Trailer Covered?
If your trailer is involved in an accident, what happens to the contents of the trailer, are they covered by your insurance? Unfortunately, most policies do not cover the contents, such as lawn mowers, motorcycles, four-wheelers, jet skis, or any other large equipment or toys. They are also not covered by mini tort claims. Rather, those only cover the damage to motor vehicles covered by the No-Fault law.
To protect the stuff you’re hauling in the trailer, plan to take out a policy for each of the larger pieces of equipment. This will ensure that no matter what damage occurs, it’ll either repair or replace those things. If it’s smaller stuff in your trailer, like camping equipment, then that may be covered by your homeowner’s policy. Check with your agent to make sure everything you’re hauling is covered in the case of an accident.
What If Someone Hits Your Parked Trailer?
Other than a moving accident, what happens if your trailer is involved in an accident while it’s parked? Well, that all depends on the details of the accident. As long as your trailer was parked safely, then your property protection coverage should pay for the damage to the trailer and its contents.
The trick is making sure the trailer is actually safely parked. According to MCL 500. 3121(1), (3) and (5), this means the vehicle must be parked in a way that does not cause unreasonable risk of damage. In other words, if you’re parked in a parking spot in the back of the lot, you’re less likely to have issues with this clause. However, if you’re parked alongside a road, you may not have coverage.
Regardless of whether you use a trailer for business or fun, know that your rig will be safe when you purchase it from USA Trailer. Visit one of our many showrooms throughout the state to find the best trailer for your needs.