The following article was originally published on our blog in November of 2009. As we often receive questions regarding how to best insure APUs, I thought it might be helpful to revisit this post:
With increased fuel costs and changes in idling regulations, many truckers have opted to install auxiliary power units or generators (commonly referred to as APUs) in to their tractors. The intent of APUs is to reduce costs and, in some cases, comply with environmental regulations. However, as with any acquisition of new equipment, there is a need to make certain it is included for insurance coverage in the event that it is damaged by a covered loss such as collision, fire or theft.
There are two ways to provide physical damage coverage for an APU. The option you choose will be determined, in part, by answering the following questions:
Question #1:
Was the APU installed at the factory and cannot be removed from the tractor?
If the answer to this question is “yes,” then you may want to insure the APU on the tractor’s physical damage policy. To do so you would include the value of the APU in the tractor’s value. In the event of a covered total loss, you would be paid the value of the tractor (including the APU) less your deductible. In the event of a covered partial loss, you would receive the amount to restore the tractor (including the APU) back to pre-loss condition, less your deductible.
Question #2:
Was the APU installed after the tractor was purchased or can it be removed from the tractor?
If the answer to this question is “yes,” then you may wish to insure your APU on an inland marine policy. An inland marine policy provides physical damage coverage for the APU (as well as any other equipment you chose to schedule on the policy) for those perils outlined in the policy. Common perils include vehicle accidents, theft, fire and vandalism. The inland marine policy provides coverage for the APU wherever it is at the time of loss. A benefit of this type of policy is that if the tractor is considered a total loss by the physical damage policy’s standards, but the APU is not damaged or sustains only minor damage, you can take the APU out and install it into your next tractor. Also, the deductibles for inland marine policies tend to be lower than those for a physical damage policy.
At the Navigator Truck Insurance Agency we work hard at being helpful, accessible and result oriented. Is your APU properly insured? Give us a call today at (800) 596-TRUCK (8782) and we will be happy to review your options with you.
Until next month,
Jeffery A. Moss
President