TRUCK INSURANCE PROGRAMS

MISTAKES You Can Avoid That Can Increase Your
Truck Insurance

How can trucking companies keep down their insurance costs?

Risk management is critical because rates are directly tied to the number of accidents that they have in a given five-year period. It’s not just severity of accidents, it’s also the frequency. An investment in risk management pays off in lower rates because well-managed trucking companies enjoy lower pricing. That’s why we work with clients by reviewing their loss experience and helping them develop better loss control measures.

How do insurance underwriters evaluate trucking companies?

The number of companies insuring truck operations has greatly decreased, and these companies are more selective about who they insure. Preparing a submission for insurance requires a great deal of paperwork, which we try to make easier for our clients. Most trucking insurers want more than an ACORD form.

The information required can include financial statements for the past two years. This tells underwriters if the company pays well enough to attract better drivers, invests in keeping equipment well maintained, and more. They also look at the company’s safety and maintenance programs. In addition, underwriters often want recent compliance reviews, rating information, DOT records in the event of a rating problem, and a list of owner/operators versus
employees.

What mistakes do trucking companies make when they implement certain operating decisions without considering the insurance
implications?

Even though there is a driver shortage, it is a mistake to have drivers on the road too long. It's not safe. If they are reported, it drives up insurance
costs. Background checks are also important. Although we can run
Motor Vehicle Reports (MVR) on drivers, we cannot share the information
with clients due to privacy laws. Companies need to get the driver’s permission and run the MVRs themselves.

Make sure you report any new drivers you hire to your carrier. Many insurance companies require that new drivers must be reported to them. Not making a phone call to report a new driver can cost you thousands of dollars. If your new driver has an accident and is not listed, the insurance company can possibly deny or significantly reduce your coverage.

Many insurance carriers are not insuring cargo insurers for damage to unattended vehicles and theft of their cargos. Companies often think they have this coverage, when they do not, so be sure to determine if you have it by asking your broker.

It’s also important to verify that your owner-operators are properly insured for workers compensation. Workers compensation insurers are monitoring payrolls to identify employees versus owner-operators. They
may also ask for proof that the owner-operators have workers compensation insurance. If they find out owner-operators are not insured, they will audit the trucking company and make them pay for the last two
years. Even if you get drivers to do this, you should consider a Contingent Liability policy, which will pay disputed claims and prevent a potential Workers Compensation carrier audit.

How else can trucking companies reduce commercial vehicle insurance insurance costs?

Besides advising our clients and seeking the best rates, we have a new free service called MyWave. MyWave is an online service that has time saving tools to help manage insurance tasks. For example, creating employee newsletters, safety programs, in-house forms, and insurance reports can be time-consuming and expensive.

MyWave lets you download easy-to-customize materials. If you have an insurance question, you can search a library of thousands of articles. Or, post your question to an online forum tapping the resources of your industry peers. You can also access a complete OSHA Log rep orting
and analysis system. All of these services save time and money - and
they are free.

What are the advantages of working with someone like you who specializes in the business?

When you work with a broker that specializes in your industry as we
do, the broker can identify potential situations that can cause an insurance exposure based on their experience with similar clients.

This article is for general advice. Every business is different and requires its own analysis from your broker. The trucking industry is unique and not every insurance broker understands it. As specialists, we represent most of the major carriers that write insurance for your business, which general brokers do not.

Contact us about trucking insurance.