Do You Have to Have Insurance on an Enclosed Trailer? A Complete Guide
If you've recently invested in an enclosed trailer—whether to haul cars, tools, or cargo—you've probably asked yourself: Do you have to have insurance on an enclosed trailer? The answer isn't as simple as yes or no. It depends on how you use the trailer, where you use it, and whether you're protecting it against liability, damage, or theft. Let's break it all down so you can hit the road (or store it away) with total confidence.
What the Law Says: Insurance Requirements Vary
Legally speaking, most states do not require you to carry a separate insurance policy for your enclosed trailer if it's being towed by a vehicle that already has liability coverage. The towing vehicle's insurance typically extends basic liability protection to the trailer when it's hitched—meaning if you damage someone else's property or injure someone while towing the trailer, your auto policy likely covers it.
However, this only applies to liability. That means it protects other people, not your trailer. If your enclosed trailer is damaged in an accident, stolen, vandalized, or hit while parked, you're out of luck unless you have separate coverage for it. So while insurance may not always be required, it's often the smartest move to protect your investment.
When You Absolutely Should Have Coverage
If your enclosed trailer is financed or leased, insurance is usually required by the lender. Just like a car loan, they want to ensure their asset is protected until it's paid off. This will typically include comprehensive and collision coverage.
Also, if you're using your trailer for commercial purposes—such as car transport, equipment hauling, or mobile business use—many business insurance policies require the trailer to be listed separately. That's because commercial use carries more risk and liability than casual or personal use.
If you use your trailer regularly, park it at job sites, or store valuable cargo in it, getting insurance is more than just a safety net—it's essential protection against real-world loss.
What Kind of Insurance Covers Enclosed Trailers?
There are a few different coverage types to consider, depending on how you use the trailer:
- Liability Coverage (via towing vehicle): Covers damage or injury caused to others while towing.
- Comprehensive Coverage: Protects against theft, vandalism, fire, and weather damage when the trailer is parked or stored.
- Collision Coverage: Covers trailer damage from traffic accidents, regardless of who's at fault.
- Cargo Insurance: If you're hauling vehicles, tools, or other high-value items, this covers the contents inside the trailer.
- Commercial Trailer Insurance: Required if your trailer is part of a business operation—this may be bundled with general liability or auto coverage.
Speak with your insurance provider to make sure your enclosed trailer is listed specifically on your policy. Not all carriers automatically extend coverage from your truck or tow vehicle.
Does Homeowners Insurance Cover an Enclosed Trailer?
This is a common assumption—and unfortunately, it's usually wrong. Most homeowners insurance policies do not cover trailers, especially once they're used off your property or hitched to a vehicle. Even if your trailer is parked in your driveway, damage from storms, vandalism, or theft might not be covered unless it's specifically listed as a separate item.
If you store tools, gear, or a car inside your enclosed trailer, homeowners coverage almost never protects what's inside either. That's where cargo or inland marine policies come into play.
The Bottom Line: Don't Assume—Insure Smart
So, do you have to have insurance on an enclosed trailer? Legally, maybe not. But practically? Absolutely. Whether it's theft, damage, liability, or loss, the cost of repairing or replacing an enclosed trailer—especially one used for car hauling or business—is far too high to risk going uninsured.
The smart move is to treat your trailer like the investment it is. Talk to your insurance provider, get the right coverage based on how you use it, and keep your trailer (and everything inside) protected.
At Taurus Trailer, we don't just sell rugged gear—we help you protect it for the long haul.
Contact Us