Equipment on a Truck Chassis, Am I Covered?

When discussing construction trucks, it’s important to delve into specifics to understand their insurance needs fully. Take, for instance, the streetsweeper truck. The components, such as the front cab, drive shaft, and the mechanisms linking the tires, constitute what is known as a truck chassis. This chassis, typically sold by manufacturers as a base, gets equipped with additional tools like vacuums post-purchase. 

The critical question arises when considering insurance for such specialized vehicles. Simply including these trucks in a standard auto insurance policy might not suffice. Such policies usually compensate based on the truck’s actual cash value, factoring in depreciation over time. For example, consider a truck from 2007 valued at $28,000 today, whereas purchasing a new model would cost around $100,000. This scenario prompts a crucial inquiry: Are we insuring our vehicles appropriately? 

Are you contemplating the equipment value? 

In assessing the value of the truck and chassis—or the cab and chassis—the depreciation over time is a given, typically covered under a standard auto insurance policy. However, considering the specialized nature of certain equipment, such as a gas tank, a more tailored approach is necessary. An Inland Marine policy, for instance, can be ideal for insuring such specialized equipment at a stated value. This ensures that if the equipment, being five years old or newer, requires replacement, the funds will be available to purchase a new one directly from the manufacturer. By allocating these distinct elements across two separate policies, we can effectively manage and safeguard the investment. 

Having a knowledgeable insurance broker is vital to understanding your options.  

We’ve noticed a gap in awareness among both clients and our service team regarding insurance options for specialized vehicles. Often, when clients submit a list of trucks, the default action is to schedule them on a standard auto policy. This approach, however, overlooks the unique needs of vehicles equipped with specialized apparatus, such as additional machinery or modifications not covered by traditional policies. The realization of this oversight typically arises when external agents highlight the potential risks, prompting a reassessment of our insurance strategies to ensure comprehensive coverage. 

Consider a scenario where a vehicle, valued at $200,000 due to its specialized equipment, is only insured for $30,000 under a standard policy. In the event of a total loss, such as an accident that renders the vehicle unusable, the payout from the insurance carrier may fall drastically short of the actual replacement cost. This discrepancy can lead to significant financial strain for the owner, who may have anticipated a settlement capable of covering a new purchase. By separating the coverage for the vehicle’s basic structure from that of the specialized equipment, we can narrow the gap between the insurance payout and the replacement cost, albeit not completely eliminating it, but reducing the shortfall considerably. 

Highlighting a real-world example, a client had a “cherry picker” truck equipped with a lift, which was involved in a severe accident leading to a total loss. Fortunately, due to the vehicle’s age and the manner in which it was purchased and maintained, the financial impact on the client was minimal. The settlement received exceeded the vehicle’s depreciated value, allowing the client to profit from the unfortunate event. This case underscores the importance of accurate vehicle valuation and the potential benefits of customized insurance solutions to match the unique aspects of specialized vehicles. 

The key is to be aware of your trucks coverage gap. 

This situation prompted a thorough review of our client portfolio to identify potential gaps in coverage, leading to the discovery of overlooked areas. The essence of our effort is to elevate awareness and equip our service team with the insight needed to address these concerns proactively. While solutions may not be universally applicable, the importance of engaging our clients in these discussions and exploring tailored insurance options cannot be overstated.