The truck market is hot. The demand for trucks and trailers is through the roof. The truck manufacturers cannot hire workers quick enough to catch up with demand and are booked for months and years in advance. There is an economy wide supply shortage. The financial relive money are abounding.
The used truck and trailer prices are at all-time high and it is expansive to replace trucks. There are anecdotal cases of desperate truckers paying more than $40000 for a used trailer.
Many truckers find only after being in an accident that their insurance coverage is insufficient. They cannot buy the same truck or trailer for the money they get from the insurance companies.
Here is how it works:
In the event your truck is in an accident the insurance company determines if your truck is worth repairing. In most cases if the repair is more than 60 percent of the value of the truck the insurance company will declare a total loss. That means that they will pay the fair market value of the truck and transfer the title to the insurance company.
The problem is that the insurance will not pay more than the value that the truck was insured for. This is called the “stated value” of the equipment. So, what happens if you have a truck that is worth $40,000 that is insured for 20,000 - you want get more than what you insured the truck for ant you will have to come up with a lot of money out of pocket to buy a similar truck.
What to do?
- Check prices of your equipment with dealers in your area.
- Determine what is the market value of your truck or trailer
- Call your insurance agent and request a coverage review to make sure your truck is insured to a value that is adequate for the current market conditions.