Equipment Values Increasing Beyond Insurance Limits

With an 18-24 month back log on new tractors and trailers, the used equipment market has never been this hot. According to Transportation Topics, the prices for used equipment are seeing a 66% increase in prices for a standard class 8 vehicle. This is good data when you’re looking to purchase new equipment, however it could point to insufficient equipment values in the event of a claim. 

Depending on how your physical damage (comp and collision) insurance is valued, you may not have enough limits to replace your unit with like kind and quality. 

Example: A trailer is insured for $40,000, because that’s what the depreciation schedule shows of the item’s value. It is damaged in an upset-overturn and it is a total loss. The average trailer cost today is $55,000. Doing the math in the difference, that equals out to a $15,000 under valuation of the trailer. Who is responsible for this difference? The client will be required to make up that $15,000 shortage on purchasing a new trailer.  

We recommend motor carriers take their current equipment list to their trusted equipment dealer and ask for a value check on all equipment. This is always a good practice to get into the habit of performing regularly, but right now with equipment values having taken sharp increase, and continuing to increase, now is an excellent time. Clients are shocked at the increase cost associated with their used equipment and are taking the precautions necessary to protect their balance sheet.

Taking precautions now to revalue all of your equipment, will save you money, and a lot of headaches, later on if there is damage. To find out initial steps for starting a revaluation, contact your AssuredPartners Transportation team today. They can help you get on the road to the right coverage.