Physical Damage Insurance for Commercial Trucks
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
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.
