Question 1

What's the difference between actual cash value and stated value?

Accepted Answer

Actual cash value (ACV) pays the depreciated market value at the time of loss — a 7-year-old tractor on ACV might pay 40-50% of replacement cost. Stated value (sometimes called agreed value) pays a pre-agreed amount regardless of market depreciation, ensuring the insured value matches what equipment is actually worth on the policyholder's books. Stated value runs 15%–30% higher in premium but is essential for specialty equipment, recently purchased units, and customized configurations.

Question 2

Does physical damage cover trailers?

Accepted Answer

Owned trailers can be scheduled on physical damage at their stated values. Trailers belonging to other carriers temporarily in your custody (interchanged trailers) need 'trailer interchange' coverage — a separate endorsement that covers liability you assume contractually for damaged or lost interchanged trailers. Failing to carry trailer interchange when you regularly move other carriers' trailers creates direct out-of-pocket exposure on every interchange agreement.

Question 3

What's downtime/loss-of-use coverage?

Accepted Answer

Downtime coverage pays a daily allowance (typically $100–$300/day) while a damaged truck is being repaired or replaced after a covered loss. For owner-operators and small fleets, the lost revenue from a sidelined tractor can exceed the actual repair cost — downtime coverage closes that gap. Coverage is usually capped at 30–60 days and starts after a waiting period of 24–72 hours. Most major motor carriers offer this as an optional but cost-effective endorsement.

Question 4

Are repairs paid at OEM or aftermarket parts pricing?

Accepted Answer

Standard physical damage policies pay the lower of repair-or-replace cost and may use aftermarket or LKQ (like-kind-and-quality) parts where available. OEM parts riders are available for newer equipment but increase premium. Specialty truck operators often negotiate OEM-required clauses for engine, transmission, and major component replacements. The right structure depends on equipment age and operational requirements — newer equipment under warranty benefits most from OEM riders.

Question 5

How is physical damage premium calculated?

Accepted Answer

Premium = (insured value × rate) where the rate is driven by equipment type (sleeper vs. day cab vs. specialty), radius of operation (local rates lower, long-haul higher), territory (Florida loads premium for theft and weather), drivers' MVRs, prior loss history, and selected deductible. Florida physical damage typically runs 5%–8% of insured value annually for standard tractors; specialty equipment and high-loss-history operations run higher. GPS tracking, telematics, and parking-yard security earn premium credits.

Question 6

What's a unit deductible vs. a fleet deductible?

Accepted Answer

Unit deductible applies to each individual loss on each vehicle (a $5,000 deductible per truck per loss). Fleet deductible aggregates losses across the fleet up to a stated annual amount. Fleet deductibles work for larger operations with predictable loss frequency, smoothing out claim cost; unit deductibles are simpler and standard for smaller fleets. Choosing between them depends on fleet size, loss history, and cash flow tolerance for claim deductibles.

Question 7

Does physical damage cover cargo damage?

Accepted Answer

No — physical damage covers the vehicle and trailer, NOT the cargo inside. Cargo damage requires motor truck cargo coverage, which is a separate inland marine policy. Physical damage and motor truck cargo are typically packaged together for trucking operations, but they're distinct coverages with separate limits. Confirm both are in place before quoting work that includes cargo liability assumptions.

Physical Damage Insurance for Trucking

Physical Damage

What's Covered

How It Works

Quote Your Physical Damage Coverage

Understanding Physical Damage

Who needs this

How it pays out

The Florida reality

Physical Damage — Frequently Asked Questions

Stay Informed

Not sure what coverage you need?