A trailer is a handy thing to have in summer and in winter, from camping to snowmobiling to transporting personal belongings. When it comes to insurance, do you know whether your trailer and its contents are covered? Read our brief guide to make sure your trailer is properly insured.
Two types of trailers
The first thing you should know is that there are two types of trailers, which are used for very different purposes.
1) A trailer for personal use only refers to a trailer that is not used as accommodation, as an office, for demonstrations or to transport passengers, but is instead used to transport objects, movable property and any other equipment that belongs to you.
The trailer automatically has civil liability coverage for damage caused to others if it is hitched to your private passenger vehicle or is usually hitched to it. Whether you own it or are renting it, this type of trailer is considered to be part of the vehicle it’s attached to. This means it has the same amount of civil liability coverage as the vehicle. If the trailer causes damage to others, it will automatically be covered under the QPF1 policy of the vehicle towing it.
2) A trailer used as accommodation refers to a trailer such as a fifth wheel, caravan or tent trailer.
It’s important to note that these types of trailers are not automatically covered for damage caused to others when being towed by your vehicle. Informing your broker of your newly acquired trailer is a must to ensure it has civil liability coverage.
Is property damage to my trailer covered?
Damage to a trailer used for personal activities (the first type) may be covered if you are not at fault for the collision. For a trailer used as accommodation (the second type), the damage will only be covered if it is mentioned in the declarations section of your QPF1 policy.
If you are unlucky enough to be found at fault for the collision, you will need to have purchased coverage under Section B, “Coverage for damage to insured vehicles,” to receive compensation (this is known as two-way insurance). This coverage protects you from damage to your trailer in the event of a collision or upset, in addition to separate coverage for all perils other than collision or upset (ex. fire, theft, vandalism, etc.). Generally speaking, as with car insurance, both types of coverage are offered in combination but have separate deductibles.
What about property being transported by your trailer?
According to section 6 of the Direct Compensation Agreement (DCA), “the insured shall be indemnified by the liability insurer for loss of or damage to property being transported in the vehicle and owned by the named insured… to the maximum amount of $3,000 per vehicle.” However, this only applies to no-fault collisions and you will not be reimbursed for the replacement cost of the property; instead, the compensation will be based on its depreciated value (actual cash value). That being said, depending on the nature of the property, it may be covered under:
- Your underlying car insurance policy.
- Your home insurance policy (some restrictions apply).
- Your commercial insurance (cargo insurance) policy, if you use your trailer for business purposes.
No matter what situation applies to you, it’s essential to inform your broker at Lareau if you acquire, change or trade in this type of vehicle. They will be able to advise you on the best way to protect yourself. Don’t hesitate to contact us if you have any questions about your trailer.
Drive carefully and have a pleasant journey!