Essential asset protection for tractors and trailers
Physical Damage Insurance pays to repair or replace an insured tractor or trailer after collision, overturn, fire, theft, or vandalism. Most lenders and leasing companies insist on proof of this coverage before releasing funds, and many fleet owners carry it voluntarily to safeguard high-value equipment.
Coverage
Covered peril | How the policy responds |
|---|---|
Collision & Overturn | Pays for bodywork, frame repair, or total loss settlement after an accident involving the insured vehicle. |
Fire & Explosion | Covers damage from engine fires, electrical shorts, or external blazes. |
Theft & Vandalism | Reimburses for stolen tractors, trailers, or parts, plus malicious damage like cut brake lines or graffiti. |
Specified Perils (Optional) | Windstorm, hail, flood, and lightning coverage can be added for units parked in high-risk regions. |
Towing & Storage (Endorsement) | Pays reasonable costs to move and store a disabled unit after an insured loss. |
Not covered: regular wear and tear, mechanical breakdown, cargo, or personal belongings inside the cab.
Who needs it
Who typically needs Physical Damage coverage
Owner-operators with financed equipment.
Fleets operating tractors <10 years old or valued above $25,000.
Lease-purchase drivers are required to list the lienholder as the loss payee.
Carriers running specialized trailers (reefer, lowboy, car hauler) with high replacement costs.
Limits & costs
Jurisdiction | Is Physical Damage Insurance mandatory? |
|---|---|
Federal (FMCSA) | No. FMCSA regulations (49 CFR § 387) require only liability and certain cargo/financial-responsibility filings. Physical Damage coverage is optional and not part of FMCSA minimums. |
All 50 States + D.C. | No state mandates collision/comprehensive (a.k.a. physical damage) on commercial vehicles. States set minimums only for liability; property damage to your own truck is elective. |
Lenders / Lessors | Often required by contract, not by statute. Most finance or lease agreements stipulate collision & comprehensive limits at least equal to the vehicle’s actual cash value (or the loan payoff) and require the lienholder to be listed as loss payee. |
Cost explanation
Factors that influence premiums
Stated Vehicle Value: Premium is usually 3% – 5% of the declared value per year.
Deductible: Higher deductibles ($2,500 – $5,000) reduce premiums; lower deductibles increase them.
Garaging Location: Units parked in high-theft metro areas cost more than those stored in rural yards.
Radius & Commodity: Long-haul operations and heavy commodities raise risk and rate.
Loss History & Safety Tech: Dash cams, GPS tracking, and clean loss runs can earn significant credits.
Our advantages
Trucking expertise
policies tailored to tractor-trailer specs, stated value, and lienholder demands
Same-day endorsements
lienholder change or new VIN added without downtime
24/7 certificate portal
instant proof of coverage for dispatch or pickup yards
FAQ
Frequently asked questions
1. How is the premium calculated?
2. Does the policy pay “stated value” or “actual cash value”?
3. Are custom parts and chrome accessories covered?
4. Is gap coverage available?
Blog
Stay informed with the GIA Group, LLC blog
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