In December I posted the answers to some frequently asked questions regarding workers’ compensation insurance.  As I explained, in some cases individuals cannot purchase workers’ compensation for themselves.  Additionally, many individuals choose not to include themselves in coverage due to the costs.  However, just because workers’ compensation isn’t the perfect fit for you doesn’t mean you should go entirely without some sort of protection against work related injuries.  Instead, consider the many benefits an occupational accident (Occ/Acc) policy can provide to you at a very reasonable monthly premium.

 

Let’s start with a basic explanation of the coverage.  Occ/Acc is not workers’ compensation, but is similar in that it helps pay for medical bills related to an on the job injury and provides some compensation for lost wages.  Many Occ/Acc policies that are written for professional truck drivers will even extend coverage to include passengers who are injured or killed while riding in your truck. 

 

Below is an outline of four major features of an occupational accident policy:

 

1.)    Accidental Death & Dismemberment: Pays one lump sum and, in many cases, additional monthly payments to you or, in the event of your death, your survivors, to help adjust to the lifestyle change as a result of the accident.

 

2.)    Accidental Medical Expense: Pays medical treatment costs associated with job related injuries, up to the policy limits and subject to any applicable deductible.

 

3.)    Temporary Total Disability: Supplements your income in the event that an on the job injury results in your being unable to work for an extended period of time.

 

4.)    Continuous Total Disability: Extends the Temporary Total Disability Benefit if your injury has been deemed permanent.  The amount paid is normally offset by your available Social Security Disability Income.

 

The cost associated with an occupational accident policy is extremely affordable, with premiums starting as low as $130 a month.  Policy limits range from $500,000 to $2,000,000.

 

Is occupational accident coverage the right fit for you?  Give us a call today at (800) 596-TRUCK(8782) to learn more or request a quote.  All of us at the Navigator Truck Insurance Agency work hard at being accessible, helpful and result oriented. 

 

Until next month,

 

Jeffery A. Moss

President

 

 

 

 

 

 

Over the course of the last year I have seen a significant improvement in the physical damage coverages available to small companies with fewer than five trucks and owner operators who lease their equipment on to a motor carrier. Often referred to as “Physical Damage Enhancements,” many different insurance companies are offering unique coverages that clients can choose to add to their existing physical damage policies for a nominal premium increase.  Some of the most popular coverage enhancements include:

 

Towing or Roadside Repair Allowance for Mechanical Breakdown:  This is a particularly valuable enhancement because it doesn’t require that your truck be in an accident.  It provides coverage for when your truck experiences a mechanical breakdown. The coverage provides an allowance which can be used toward the expense to tow your tractor to a repair facility or for a roadside repair in the event of a mechanical breakdown.

 

Emergency Family Travel Allowance: This endorsement will pay a specified amount toward the travel expenses of a driver’s qualifying family members so that they may travel to the location of an accident in the event that the accident resulted in the driver’s hospitalization or death.

 

Diminishing Deductibles:  This endorsement will reduce the physical damage deductible by a specified amount for each loss free year.  Most companies will waive the deductible entirely once you have been loss free for 4 or more consecutive years (starting from the year this coverage is purchased.)

 

Downtime or Rental Reimbursement:  This endorsement will pay to supplement the loss of income or the additional costs incurred to rent a replacement tractor due to covered loss that left your tractor in the shop for repairs. 

 

Personal Contents: This is a nice enhancement because your personal belongings in the truck are not covered by a typical homeowners or renters policy.    This endorsement provides an allowance to reimburse you in the event that personal contents in your truck are stolen or destroyed due to a covered loss. 

 

Gap Coverage:  Provides coverage so that in the event you owe more on your tractor or trailer than it is worth at the time of loss your bank note will be paid off.  Provides coverage for the gap between what you owe on your equipment and what it is worth at the time of a total loss.  With equipment values depreciating so quickly right now, this is a valuable coverage.

 

Electronic Equipment: Covers permanently installed electronic equipment such as computer systems, fax machines, video cameras, satellite tracking systems, two-way radios and so forth in the event of a covered loss. 

 

Miscellaneous Equipment Coverage:  Provides coverage in the event of a covered loss for items used in the daily course of work such as tarps, chains and binders, but that are not included in the value of the trailer. 

 

Deductibles may apply and limits and coverage terms will vary by insurance company.  To learn more or to request a quote, call us today at (800) 596-TRUCK (8782.)  All of us at the Navigator Truck Insurance Agency work hard at being accessible, helpful and result oriented. 

 

Until next month,

 

Jeffery A. Moss

President

I have been receiving a number of questions regarding workers’ compensation lately.  I thought this month I would address some of the more frequently asked questions.  Please keep in mind that each trucking company’s situation will differ, as will state laws.  These answers are based on a trucking company operating in the state of Michigan only.

 

“Must I carry workers’ compensation?” 

The complete answer depends on a number of factors, but the short answer is yes if:

1.)    You are a Michigan sole proprietor who employs for 13 weeks or more one full-time employee (other than yourself) for 35 hours or more per week or three or more part-time employees.

2.)    You are a Michigan LLC, Corporation, or Partnership and for a period of 13 weeks or more any member or employee works full-time for 35 hours or more per week, or any three partners and/or employees are employed on a part-time basis.

 

“My guys are independent contractors.  I don’t need to provide them workers’ compensation, right?”

The law can be very confusing regarding whether an individual is truly an independent contractor or an employee.  We highly encourage you to discuss your specific situation with your Account Executive.  One “test” that can help you to answer this question is the “IRS 20-Factors Test.”  Information regarding this “test” can be obtained by calling our office at (800) 596-TRUCK (8782.)  It is very important that you can confidently state that the individuals you work with are independent contractors, as mislabeling employees as independent contractors can have far reaching impact, including increased workers’ compensation costs, exposure to workers’ compensation claims, and exposure to lawsuits related to a number of different employment issues such as:

1.) Denial of ERISA and other benefits

2.) Denial of Workers’ compensation

3.) Denial of the Family Medical Leave Act

4.) Discrimination for failure to accommodate for a disability

5.) Failure to include the individual in your employee count, resulting in your company appearing not to be required to company with Federal or State employment laws

6.) Failure to retain proper tax forms for employees, or

7.) Confusion as to who owns the rights to work completed. 

 

“I am the only employee of my company.  Can I purchase workers’ compensation for myself?” 

Not if you are a Michigan sole proprietor who has no employees.  If you are an LLC, Incorporation or Partnership and have employed yourself on a full-time basis (35 or more hours per week) for a period of 13 or more weeks, then you must purchase workers’ compensation and can elect whether to include or exclude yourself from coverage.     

 

“What does workers’ compensation cover anyway?”

There are two parts to the workers’ compensation policy.  Coverage A is workers’ compensation and Coverage B is employer liability.  Workers’ compensation provides lost waves and medical benefits to employees who suffer job-related injuries and illnesses.  Employer Liability indemnifies employers against liability claims stating that the employer’s workplace practices or conditions led to disease, death or injury to one or more employees. 

 

“My employee was recently diagnosed with cancer.  Will workers’ compensation provide coverage?” 

Not unless the cancer was found to be directly related to or caused by the work the employee completed for you.  Workers’ compensation is not intended to provide health insurance for your employee.  It only responds to injury, disease or death that is directly caused by the work the employee conducted or the environment the employee was exposed to while in your employ.

 

“My buddy says I’ll have to pay you more money once the policy expires.  Is that true?”

As a general rule, the only time you will be required to pay additional premium is if, during the year you hire additional employees or additional employee payrolls are found at the time of the premium audit (normally immediately after the workers’ compensation policy has expired.)  This is because if the employee(s) had been injured on the job during the policy period, the insurance company would have extended the workers’ compensation benefits to him or her.  The additional premium they seek to collect is legitimately owed, as the promise to provide the benefits was always there.  The best way to prevent this from happening is to inform your Account Executive of any newly hired employees so that the premiums can be modified mid-year.  Also, making certain that you do not mislabel employees as independent contractors can prevent surprises at audit.

 

At the Navigator Truck Insurance Agency we work hard at being helpful, accessible and result oriented.  Do you have questions regarding your workers’ compensation policy or whether the individuals who work with you are independent contractors or employees?  Give us a call today at (800) 596-TRUCK (8782) and we will be happy to discuss your situation with you.

 

Until next month,

 

Jeffery A. Moss, ARM

President

 

 

 

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

Occasionally in speaking with a prospective client I am told that they do not carry physical damage on their equipment.  When I ask “Why?” the answer I usually get is that the equipment is paid for, so it saves the company money not to insure it.

 

I disagree and let me tell you why.  When you remove the physical damage coverage for a piece of equipment, you are also removing the insurance against the hidden costs of an accident.  True you may pay less in your annual insurance premiums, but in the event of an accident, the financial implications are much bigger than you might expect.

 

Here is an example of how not carrying physical damage insurance can negatively impact the company’s bottom line.

 

1.)    Towing Bills: Most physical damage policies include a provision to pay for all or part of the towing expense to move the damaged equipment to the nearest repair facility or salvage yard in the event of an accident.  Towing is a huge expense, averaging between $5,000 and $10,000.  I have even seen tow bills as high as $35,000!

2.)    Debris Removal Expenses:  Most physical damage policies include a provision to pay up to a specified amount to clean up debris due to a covered loss.  Again debris removal can be a costly expense; one that is difficult to quantify before the loss occurs.

3.)    Replacing Equipment:  If the uninsured tractor or trailer is totaled in a loss there is nothing to help set you up with your replacement piece of equipment.  If your equipment is worth $5,000 and you have a $1,000 deductible, in the event of a total loss you can still expect to get $4,000 back to put toward the down payment on your next tractor or trailer.  A $5,000 limit will have an estimated premium of about $350 per year. 

4.)    Temporary Replacements: If you choose to purchase rental reimbursement or downtime coverage with your physical damage policy (and some policies include this coverage automatically) you are providing yourself a little extra to help offset the costs to rent a replacement tractor while yours is in the shop being repaired.  If a suitable replacement is not available the downtime can provide you with a little supplemental income while you are laid up. 

 

As you can see Physical Damage coverage is much broader than just insuring the vehicle itself.  By purchasing Physical Damage coverage you are insuring yourself against the additional hidden costs associated with an accident.   

 

Are you ready to add physical damage insurance to your policy?  Do you have questions about your existing physical damage policy or wish to get a quote?  Call us today at (800) 596-TRUCK (8782.)  All of us at the Navigator Truck Insurance Agency work hard at being accessible, helpful and result oriented. 

 

Until next month,

 

Jeffery A. Moss, ARM

President

Insurance policies can be a challenge to read, especially if you aren’t familiar with all of the industry jargon or didn’t get a thorough run down of coverages before purchasing your policy.  At the Navigator Truck Insurance Agency we work hard to make certain our clients understand their policies well before the paperwork is signed.  However, one area that we regularly find ourselves clarifying during the process is the basis on which a physical damage policy was written: Actual Cash Value or Stated Amount.

 

Actual Cash Value and Stated Amount are terms referring to the method used to value a piece of equipment and are quite different from one another.  This month I thought I’d take a moment to explain the differences between these two terms and why the valuation basis matters in the event of a claim:

 

Actual Cash Value:  This is a method of valuing equipment that some insurance companies offer to their fleet clients (those operating 10 or more power units); we even represent one company who offers it to their non-fleet clients.  While at policy inception you will be required to provide a current equipment schedule that includes the estimated value of your equipment, this value is not used to adjust a claim.  Instead, in the event your tractor or trailer is damaged in a covered loss the physical damage claims adjustor will go to the marketplace and determine what the equipment was worth as of the date of the accident.  In the event of a total loss you will be paid this amount less the applicable deductible.  The benefit of this sort of policy is that there is no limitation set on the value of equipment.  It is worth whatever it is worth; no more, no less and co-insurance never applies.

 

Stated Amount:  This method puts the responsibility to report the value of a piece of equipment on the owner.  You specify if your truck is worth $100,000 or $10,000 and the underwriter rates your physical damage policy’s premium accordingly.  All the responsibility falls to you.  In the event that your tractor or trailer is damaged in a covered loss the physical damage claims adjustor will go out to the marketplace and determine the value of your tractor or trailer as of the date of loss.  This is where things get tricky.  If the insurance company finds that you significantly under valued your tractor or trailer a Co-Insurance Clause may apply (see my November 2008 and January 2009 posts for more information regarding Co-Insurance and Constructive Total Losses), which might mean you will be paid significantly less than what you expected to get for your vehicle in the event of a total loss.  As a general rule a non-fleet (operating fewer than 10 power units) or bobtail client will see their policy written on a Stated Amount basis.

 

Curious if your policy is rated on an Actual Cash Value or Stated Amount basis?  Could you use help understanding your truck policy coverage?  Give us a call today at (800) 596-TRUCK (8782.)   All of us at the Navigator Truck Insurance Agency work hard at being accessible, helpful and result oriented. 

 

Until next month,

 

Jeffery A. Moss, ARM

President

 

Hired Auto Liability:  This coverage extends the auto liability coverage to include power units you have rented or short term leased (usually defined as a less than 30-days.)    

Non-Owned Auto Liability:  This coverage extends the auto liability coverage to include non-owned vehicles being operated for the benefit of your company.  Non-owned meaning that you have not hired it (rented or leased it).  This often takes the form of an employee operating their own vehicle while running an errand for the business.  For example: running to the bank, post office or office supply store

Hired Physical Damage:  This coverage extends the physical damage coverage to include equipment you have rented, borrowed or short term leased (usually defined as less than 30-days.) 

To learn more about these coverages or to request a quote, call us today at (800) 596-TRUCK (8782).  All of us at the Navigator Truck Insurance Agency work hard at being accessible, helpful and result oriented.

Until next month,

Jeffery A. Moss

President

It often surprises me that while the insurance companies we represent each offer comprehensive safety programming to their clients, few take advantage of the tools available.  There is no additional cost for this programming and for a small company it is almost like having a safety director at your immediate disposal. 

 

For those of you who may not realize, below is an outline of some of the commonly offered safety programs, materials and services available through the majority of insurance companies who specialize in trucking:

 

Driver File Reviews:  At your request a safety rep will stop out to your office to review your drivers’ files to make certain they are compliant.  Some companies even offer printed guides to help you set up driver files correctly from the start and answer frequently asked questions.

DOT Audit Reviews:  Similar to a driver file review, safety reps can also review your files prior to an anticipated DOT audit, or any other time, to make certain you are compliant and point out any potential issues. 

 

Samples of and Recommendations for Formal Safety Programs:  Safety reps love to help in the development of a formal safety program.  They can outline the policies that are ideally included in a formal program and suggest specific verbiage or places to obtain verbiage to get you started in the process.

 

Driver Recognition Programs:  Looking for a way to recognize your drivers for their outstanding service?  Driver recognition programs are a great (and low cost) option.  Many insurance companies offer certificates or give away items free of charge which may be used as acknowledgement of outstanding performance.  Your safety rep can also suggest a basis for your driver recognition program.  Examples include highest number of loss free miles, outstanding customer relations, best DOT inspection record and so forth. 

 

Loss Control Consultation:  Many companies will review your loss history to see if preventable patterns of loss can be identified, which will allow you to complete appropriate driver retraining.  These consultations can be conducted either on site or through information gathered by fax or email. 

 

Answers to Safety and Compliance Questions:  Safety reps gladly make themselves available by phone to answer questions that arise regarding safety and compliance.  Examples include compliance laws for operating in specific states or Canada, how to address DOT safety ratings on Safer and understanding new legislation relating to hours of service. 

 

Safety Meetings:  Would you like help planning a formal safety meeting?  How about having a speaker the next time you meet with drivers?  Most safety reps are willing to come out for a formal meeting and speak to your drivers for no cost.  They are also willing to help facilitate a meeting or plan topics for discussion.  

Safety Training Videos:  Most insurance companies offer for loan a wide selection of VHS tapes, DVDs and CDs addressing safety topics.  The only cost to you is the postage to return the video when you are done.  For a complete listing of videos available to you, just call your Account Executive or your safety rep.

 

Printed Safety Materials:  Printed materials are available for a wide range of topics, including: tips for reducing work comp claims, safety posters, instructions on completing pre-trip inspections, post-accident drug/alcohol testing procedures, completing daily driver logs and information regarding hazmat regulations, training and security plan development.

 

All of us at the Navigator Truck Insurance Agency work hard at being accessible, helpful and result oriented.  Don’t see something you’d like help with?  Give us a call (800) 596-TRUCK (8782).  We’d be happy to see if what you are looking for is available.

 

Until next month,

 

Jeffery A. Moss, ARM

President

 

 

At least once each quarter I speak with a client who says they received a proposal from another agent and that the premium is just too good to be true!  In many cases, this leads the client to have concerns whether their coverages are adequate and I am asked to review the proposal to see what kind of coverage they’ve been quoted.  What I often find are large coverage gaps that the client didn’t realize existed. 

 

This month I’d like to reveal some of the common coverage weakness that I come across and what impact these missing coverages might have in the event of a claim:

 

Lower Auto Liability Limits:  While it is true that $750,000 is the limit you are required to carry by the FMCSA, most contracts and shippers will require a certificate of insurance showing a $1,000,000 limit.  In many cases a $750,000 limit is not going to reduce your premium significantly, but could cost you business, time and additional money later when you need to amend coverages midterm.

 

Coordination of Benefits:  Some agents will ask you about your health insurance, workers compensation and occupational accident policies when quoting your liability insurance.  One reason is that they may be coordinating your benefits.  That means that in the event that you are injured in an accident, your health insurance, workers’ compensation or occupational accident policies will respond first.  While it may be preferable for your workers’ compensation or occupational accident policies to pay for your injuries, it is normally advisable not to coordinate your health insurance with your auto insurance.  The primary reason for this is that health insurance policies often have lifetime limits.  So, in the event that your health insurance’s lifetime benefit limit is $750,000 and you are badly injured in an accident, incurring $650,000 in medical bills, this leaves only $100,000 left on your health insurance policy.  What would happen if three months after you have recuperated from your accident you learn that you have been diagnosed with cancer?  You will likely wish you had all $750,000 available to you, rather than just the remaining $100,000.

 

No Hired and Non-Owned Auto Liability: Some agents will leave this coverage off in order to reduce premium.  However, not having Non-Owned Auto Liability can be dangerous, as it leaves you open to law suits in the event that an individual in their own car is involved in an accident while working for you (i.e. performing a company errand.)  It may be argued that because the driver would not have been on the road had they not been completing the errand, it is your responsibility to pay for the auto liability they caused.  Non-owned Auto Liability coverage is a very low cost option to insure yourself against such unforeseeable events.  Hired Auto Liability, on the other hand, will provide you with Auto Liability for tractors that you have borrowed or short term rented.  The cost for this coverage is significantly less than if you purchase it from the truck rental company and including on the policy from the beginning means you won’t be running around at the last moment trying to secure coverage.

 

Swapping Comprehensive Physical Damage for Specified Perils:  Check to make certain that your Physical Damage policy includes Comprehensive coverage, as opposed to Specified Perils.  Comprehensive will cover you for any sort of Physical Damage claim (other than collision), while Specified Perils will only cover you for those that are named in the policy.  There can be a number of unforeseeable losses, such as vandalism, that you may wish to be insured for.  Specified Perils may be less premium than Comprehensive, but the coverage is also significantly reduced.

 

No Broad Form Collision:  In the State of Michigan we are subject to no fault laws.  The downside to this law is that if another person is at fault in a collision, you do not have the right to pursue damages by taking that person to court.  Instead, your physical damage policy is used to repair your vehicle.  Broad Form Collision seeks to limit the amount you have to pay in the event that you are not at fault for a collision, as your deductible for repair will be waived.  If you have a physical damage policy with Standard Collision, you have to pay your deductible regardless of who was at fault.

 

No Hired Physical Damage Coverage:  Hired Physical Damage is a nice feature to have on a policy, as it will make certain you have coverage up to a specified amount for any tractors or trailers that you have rented for a short period of time (usually 31 days or less).  Again, in most cases, the cost for this coverage is significantly less than what you would pay if you bought it through the equipment rental company. 

 

Co-Insurance Clauses:  While co-insurance might not make your premium less, it is often the byproduct of a discounted policy premium.  Be careful to investigate any hidden clauses on the Cargo or Physical Damage policies.  Ask your agent specifically whether or not co-insurance applies, or if there are higher deductibles for losses caused by theft or refrigeration breakdown. 

 

No or Limited Towing Coverage:  The cost to tow a tractor and/or trailer from the scene of an accident can easily exceed $10,000.  While most policies will include some sort of towing coverage, it is not always clear how much.  When reviewing a proposal ask about towing limits.  Many policies cap payments on towing at $3,000 to $5,000.  And remember, there is no towing coverage if you do not purchase Physical Damage.

 

Few or No Physical Damage Enhancements:  These are the optional coverages that we often find clients want or expect in their policies, but do not realize must be listed on the policy.  Under this heading falls coverages for things such as rental reimbursement and downtime coverage, tarps/chains/binders, personal effects, diminishing deductibles and emergency family travel.  In many cases the cost for such enhancements is minimal. 

 

No General Liability: General Liability is an optional coverage that indemnifies you in the event that your company is liable for bodily injury or property damage to a third party.  This is for occurrences away from the tractor.  One feature of having a General Liability policy is that it automatically includes legal representation in the event that someone brings a suit against you (the premium is significantly less than it would cost to hire and retain an attorney.)  Also, General Liability coverage is frequently required in contracts or by shippers before the trucking company is allowed on the shipper’s premises. 

 

Misidentifying Radius of Operations:  Unfortunately from time to time we do see radius of operations misrepresented on a proposal.  An example of this is when an insurance company restricts the number of times per year you can exceed a predefined radius (normally 300 or 500 miles.)  If you routinely travel outside of the radius you have been rated for it is considered falsification of information on the applications and is grounds for midterm rate increases, cancellation of policy or even rejection of claims.

 

All of us at the Navigator Truck Insurance Agency work hard at being accessible, helpful and result oriented.  Need help understanding your “great deal”?  Give us a call at (800) 596-TRUCK (8782).  We’d be happy to help you out any way we can.  

 

Until next month,

 

Jeffery A. Moss, ARM

President

 

I am frequently asked what the secret to insurance is.  In other words, how can a client get his best insurance rate?  In my years of insurance experience I have seen many prospective clients head down the paths they think will lead them to their best rate, only to have it turn out just the opposite.  This month I thought I’d offer up some tips on what may make your trucking company a more appealing risk to the insurance company and to dispel some myths about what will increase your rates:

 

Experience:  Insurance companies like the comfort of knowing that the trucking company owner has previous experience in the industry before starting his own company.  Most insurance companies prefer prospective clients who have been in business, and profitable, for at least 2 years.  For new ventures, preferred companies will have owners with multiple years of experience as Owner Operators first.

 

Drivers:  Drivers are near the top of criteria that an Underwriter will review.  Preferred clients will have drivers with multiple years (five or more) of experience driving the same type of equipment the trucking company operates.  In addition it is desirable for a company to have very low driver turn over, not to utilize “finishing programs” for new hires, and for their drivers to have few, if any, moving violations, within the last 3 years. 

 

Safety:  Also high up on an Underwriter’s review is management’s attitude toward safety.  Less easy to define, management’s attitude toward safety is often demonstrated through the existence of a complete safety program that is not only reviewed with the drivers, but is the standard to which driver’s are held.  Regular safety meetings on relevant topics and safety incentive and award programs for drivers also demonstrate how committed to safety a company may be.

 

Routes:  While the nature of the trucking industry makes this one difficult to obtain, Underwriters have a preference for company’s who have regular, known routes hauling commodities that they have had extensive experience with.  In addition, long term profitable contracts with the same core group of shippers also appeal to most insurance companies.

 

Losses: Of course this is the one I am asked most frequently of all.  “How will this claim affect my premium?”  The answer is complex.  Insurance companies expect losses; that is why they are in business. However, they prefer clients who have losses that are infrequent, unpreventable and non-routine in nature.  Some examples of loss experience that might impact a company’s premium are if the Underwriter is able to see a pattern to a company’s losses, the losses are minor but frequent in nature, there is a specific driver responsible for the majority of the losses, but no disciplinary action taken or there are a number of high dollar and preventable claims. 

 

Controlled Growth:  Insurance companies prefer clients who have demonstrated stable and controlled growth.  Newer ventures that have grown from one truck to ten in a three month period can throw a red flag up for an Underwriter, as he or she will begin to wonder if management has enough safety policies and procedures in place to manage the growth well.  Often times trucking companies think that the more equipment they have the more “buying power” they yield.  This may be true for a company that has been in business and profitable for 5 or 10 years, but is not the case for a company that has been in business for 1 year and has already had multiple claims.

 

It is important to note that the items above are not all that an Underwriter will take into consideration while reviewing your account, but they are some of the big items I am frequently asked about.  If we can help you to understand your company’s snapshot, give us a call at (800) 596-TRUCK (8782).  We’d be happy to help you out any way we can.  All of us at the Navigator Truck Insurance Agency work hard at being accessible, helpful and result oriented. 

 

Until next month,

 

Jeffery A. Moss, ARM

President