Trailer insurance and licensing is a necessary investment for anyone who uses a trailer. If you use a trailer for personal reasons, insurance will protect you from liability in the event of an accident. Depending on your choice of policy, the insurance might also cover your losses and medical expenses, regardless of whether you are liable in an accident.

Trailer Insurance: License Requirements

All drivers towing a trailer in Michigan are required to hold a valid driver’s license, notes the Michigan Department of State’s website. In addition, drivers using a pickup truck to tow a fifth wheel recreational vehicle with a second trailer attached to the back of the RV must have a class “R,” or recreational double endorsement, on their Michigan license before towing both vehicles. Drivers must be at least 18 years of age, hold a valid Michigan driver’s license and pass a written test to obtain a class “R” endorsement.

Title and Registration

All trailers over 2,500 pounds and all trailer coaches must have a title. When you purchase a trailer in the state, you must complete and submit a title application or transfer, along with current titling fees, to the Secretary of State, within 15 days. Michigan requires all trailers, regardless of weight, to be registered and display a valid license plate. Trailer and trailer coach registration requires a one-time fee based on the trailer’s weight. The license plate issued for trailers is permanent and non-transferable.

Trailer Requirements

In Michigan, the law requires that you equip your trailer with at least one working tail light; your trailer tires have a minimum tread of 2/32-inch; and a light illuminates the trailer license plate. All commercial trailers must have mud flaps on the rear wheels. Trailers weighing a minimum of 2,500 pounds must have turn signals and two red or amber rear stop lights that are visible from at least 100 feet during the day and night. Vehicles with a gross weight of under 3,000 pounds must have a single stop light if the trailer’s load obscures the stop light on the towing vehicle. All trailers under 3,000 pounds must also have two red rear reflectors.

Trailers over 3,000 pounds must have one rear stop light and an amber reflector near the front of each side of the trailer with a red reflector near the back of each side. Trailers over 3,000 pounds must also have two amber clearance lights on the front of the vehicle and one on each side, visible from at least 500 feet; a single red clearance light near the rear of each side of the trailer; and two red clearance lights on the back of the trailer. All trailers over 3,000 pounds must be equipped with brakes, while trailers weighing over 5,500 pounds must have brakes strong enough to control the trailer’s movement, stop it and hold it.

What Is Trailer Insurance Coverage?

To determine the right type of trailer insurance coverage for you, you need to consider your general driving patterns and the value of the trailer itself. If you use the trailer infrequently, your odds of an accident are somewhat lower, especially if you stick to safer routes. As such, you might not feel the need for one of the costlier, more thorough forms of coverage. Anything beyond a standard liability policy might also be extraneous if the trailer would be less expensive to replace than repair.

Collision Insurance

If you are currently in the market for trailer insurance, the first place to check would be your auto insurance provider. When you speak with an insurance agent, he or she can walk you through the options and help you determine the best choice for your trailer, as well as trailer insurance cost. In some cases, the coverage of a basic auto insurance policy will extend to cover the trailer. If you are also looking for a new auto insurance policy, now would be the time to see if you can get an umbrella policy to cover your automobile and trailer jointly.

Of course, not all auto insurers will also offer trailer coverage, so you might have to look around online.

Collision insurance will cover the cost of damage to your vehicle and trailer in the event of an accident. Unlike liability coverage, which only pays for costs related to damages and injuries you might inflict upon another party, collision coverage will pay for your medical expenses and trailer repairs.

A lot of motorists forgo collision insurance because the liability policy of the at-fault party generally covers damages. By this logic, you don’t need collision insurance if another driver hits you, because you can file a claim on their policy. However, there is no guarantee the liable party will even have insurance, in spite of the law. Your collision insurance will cover your expenses, regardless of who is responsible for the accident.

If your trailer gets stolen, comprehensive insurance will cover the cost of a new or used trailer of comparative market value.

Liability Insurance

Liability insurance will cover any costs you incur if you are responsible for the damage of another vehicle or the injury of another motorist. However, liability insurance will not cover the cost of your losses or injury if you cause an accident. If you are involved in an accident and the other party is liable, that person’s liability insurance will cover the costs of your vehicle/trailer repairs and medical expenses.

Liability insurance is the bare minimum of coverage required under the law in most states. Is trailer insurance required if you already have auto insurance? Well, most policies will cover damage to a trailer under the claim of a basic auto insurance policy. However, for added protection, you might wish to purchase insurance specifically for your trailer.

Comprehensive Insurance

Comprehensive insurance will cover your trailer in case of off-road loss or damage. If your trailer falls subject to vandalism while parked and unattended, a comprehensive policy will pay for the costs to repair or replace it. A comprehensive policy will also pay for repair or replacement costs if the trailer gets damaged or destroyed by a fallen tree or downed power line. Comprehensive insurance will even cover the damage costs that stem from a fire, snowstorm or natural disaster.

Contents Coverage

If you use a trailer for the transportation of personal belongings, contents coverage will pay for the repair or replacement costs for anything that gets lost or stolen. For example, if your parked trailer contains a boat, vehicle or motorcycle, and a theft occurs, contents coverage will pay for the cost of a new or used replacement boat/bike/vehicle of comparative market value. Contents coverage will also pay for the cost of any items stolen from a parked mobile home on wheels.

If you have an accident where the contents in your trailer get damaged or ruined, collision insurance will pay for the damages to your automobile and trailer, but contents coverage will cover the cost of the items inside your car/truck and trailer.

Commercial Trailer Insurance

If you plan to use your trailer for business purposes, you will need to have it insured separately from your vehicle. In fact, personal auto insurance does not apply to a commercial trailer. As with commercial vehicles, commercial trailers require special insurance due to the higher stakes involved. Depending on the laws in your state, you might be able to get your trailer covered under your commercial auto insurance.

If you transport goods for a company via trailer, you will need to have trailer insurance before you take to the road. Only with commercial trailer insurance can you protect the trailer and keep the contents covered in the event of an accident, theft or off-road incident.

In most cases, companies that offer commercial auto insurance will also provide trailer insurance for trailers that fall under the commercial category, examples of which include the following:

Commercial trailer insurance will cover the trailer itself in the event of accidental damage or vandalism, but it will not cover the cost of damaged or stolen commercial cargo contained inside.

Cargo Insurance

If you work for a commercial cargo company and you use your trailer to haul cargo from one location to another, you will need to have cargo insurance to cover the commercial contents inside the trailer.

When you consider the potential consequences of lost, stolen or damaged cargo, it is essential for your livelihood and prospects as a commercial hauler to get a cargo insurance policy. That way, no client or shipping boss can ever force you to pay out of pocket for lost or damaged cargo if your trailer gets hit by another vehicle while in transit or damaged off the road by vandals, thieves, fire or inclement weather.

Commercial Trailer Insurance

Shopping for commercial trailer insurance can be a complicated task as you consider the factors at stake. On one hand, you want insurance that will cover your trailer in the event of damage or loss, regardless of cause or liability. However, you will not want the cost of your trailer insurance premiums to eat into your bottom line as a commercial hauler.

When you speak with representatives from commercial auto insurance companies, ask if they can bundle trailer insurance into the same policy. Search for commercial auto and trailer insurance providers in your area and call several companies for free quotes. Gather several quotes and compare the benefits attached to each before you settle on an offer.

Commercial Trailer Insurance Rates

Due to the high stakes at play with the operation of commercial vehicles and trailers, the premiums for commercial auto and trailer insurance are generally higher than the premiums for personal car and trailer policies. On the upside, the coverage you receive with commercial insurance is generally more expansive.

In any case, it is vital to have such coverage if you plan to haul a commercial trailer across local, intrastate, interstate or cross-country distances. Commercial auto and trailer insurance will protect your business from downtime, loss and potential hardship in the event of an accident.

Several factors determine commercial trailer insurance rates. The make and model of your trailer will affect your rate, as trailers of high market value tend to be costlier to repair or replace. The types of material your trailer carries will also have an impact on your insurance rate, because certain contents could leave more of an environmental impact or result in costly cleanups if they get strewn about or spilled during an accident.

The amount of mileage you rack up as a commercial hauler over the course of a typical year will also affect your insurance rates. That’s because your odds of an accident increase when you drive more. Rates can also change due to the location of the start and end points of a typical route, as certain routes and areas tend to be more challenging and tend to see higher frequencies of accidents among commercial vehicles.

Personal factors can also affect your commercial auto and trailer insurance rates. If you have a less-than-perfect record when you apply for a policy, you might have to pay higher premiums, especially if it’s been fewer than three years since your last infraction. Another thing affecting your rates is your age at the time you apply for a policy. Most insurance companies view drivers under the age of 25 as higher-risk policyholders, and therefore assign them higher rates.

Lastly, the type of insurance you choose for your trailer will influence your rates. For the most expansive and thorough coverage, you will generally pay higher premiums than what would typically be part of a more standard policy.

Commercial Trailer Insurance Discounts

Several factors can land you a discount on your commercial trailer insurance. If you are 25 or over and have a clean driving record at the time you apply for a policy, some insurers might give you a lower rate. If you already have a commercial driver’s license with the same provider and wish to add trailer insurance to your policy, you stand a better chance of negotiating a lower-rate policy.

You can also get trailer insurance discounts if the make and model in question has one of the more reliable grades for trailers in its class, as this would reduce the possibility of damage in a typical accident. If most of your hauling routes cover safer areas, you could secure a lower insurance rate due to the reduced likelihood for theft or vandalism.