Semi-Truck Physical Damage Insurance

What Is Physical Damage Insurance?

Physical damage insurance covers the repair or replacement of an owned vehicle in the event of a covered incident. The two most popular types of physical damage coverage are collision, which covers most road-related incidents, and comprehensive, which covers most other incidents. 

‍

Physical damage insurance does not cover third-party property or personal injuries of any kind.

‍

While coverage is not required by law, it may be required by a lender when a truck purchase is financed. Lenders will provide a list of required coverage types and amounts.

‍

Even when not required, coverage is still recommended. According to the FMCSA, nearly 415,000 large truck collisions occurred in 2020. The cost of repair for collision damage (and business losses while repairs are completed) can be higher than most businesses can weather. Physical damage insurance helps to cover these costs and also protects against non-collision damage risks such as theft or vandalism. 

‍

Without insurance coverage, the costs of vehicle repair and lost business fall solely on the truck owner. Many business owners lack the savings necessary to cover these losses and without adequate coverage, a truck collision or theft can be a business-ending event.

What Does Physical Damage Insurance Cover?

Physical damage insurance covers the cost of repairing or replacing a named truck and trailer after a covered incident. In the event the truck is totaled, the insurance pays out the actual cash value (ACV) for the vehicle.

‍

Main Types of Coverage

There are two primary types of coverage – collision and comprehensive. Most companies will want both but here is a quick breakdown of the two:

‍

• Collision Insurance – This covers damage to a named truck and trailer caused by a collision or rollover.  The accident can involve another vehicle or an object but collisions with an animal are not normally covered. Plans that offer collision insurance tend to be more expensive than those offering only comprehensive insurance. Premiums are also more likely to increase after a claim. ‍
• Comprehensive Insurance – This covers damage to a named truck or trailer caused by something other than a collision or rollover. Common examples of covered situations include damage from fire, vandalism, collision with an animal, or theft. 

‍

Other Types of Coverage

Additional coverage options include: 

‍

• Fire and Theft with Combined Additional Coverage – This is sometimes purchased as a less expensive alternative to comprehensive insurance. However, the name can be misleading. This type of coverage is limited in scope and will only cover specific named events. For example, a policy may include hail damage protection, but no protection for fire damage. Premiums will likely be less than comprehensive coverage but an uncovered incident can result in large out-of-pocket expenses.‍
• Gap Coverage – This pays the difference between the actual cash value (ACV) of the vehicle at the time of the incident and what is owed on the loan. ACV only reflects the vehicle’s value, not what is owed on a loan or what it would cost to replace the vehicle. For example, if a vehicle is totaled and the ACV is determined to be $20,000 but there is still $27,000 due on the loan, loan gap insurance would cover the remaining $7,000.

‍

Endorsements & Riders

Endorsements, sometimes called riders, are additions to an insurance policy to fill coverage gaps or provide extra protection. Examples include:

‍

• Personal belongings coverage – Covers personal items inside the vehicle, such as clothing.‍
• Electronic equipment coverage – Covers electronic components that have been added to the vehicle such as dash cams or GPS equipment. ‍
• Increased towing limits – Provides more choice for where the vehicle is towed after an incident. For instance, towing may be covered to a repair garage of choice rather than the closest option.‍
• Roadside assistance – Offers assistance and some minor repairs to take place on the road after a mechanical malfunction rather than towing for service. ‍
• Rental truck coverage – Covers the cost of renting a replacement vehicle while a truck is in for repairs.‍
• Glass coverage – Eliminates the need to cover the deductible when a windshield or mirror breaks.‍
• Emergency expenses – Covers expenses such as extra lodging and transportation. 
• ‍Downtime or lost income – Helps offset business losses while a truck is out of operation.