Happy Holidays to you and your family! I want to thank each and every one of you that has taken the time to contact me over the past year. We are all fortunate that even after the last few years of living in a depressed financial state we are all still here to celebrate. This month, I encourage you to take the time to spend with your family and those that you care about. It just might be the “pill” you need to rejuvenate your spirits so you can achieve those goals you forgot about last year.
These last few years have been a struggle, but as they say, there are better days ahead, and it now appears so. I judge the business climate by how many requests that I receive from those of you that are just starting in the trucking business. Over the past six months, that number has increased every month.
Since it is the end of the year, it is time for me to give my annual safety speech. Winter is upon us. Weather patterns seem to be more severe and it is time to slow down and start concentrating on your defensive driving skills. The Holidays are the most dangerous time of the year. Weather and drinking plague all drivers, but for those of you that are driving as a profession, it is even worse. Your livelihood is at stake, so prepare yourself as a proactive defensive driver. Your life, and the lives of those that travel around you, are in your hands.
Insurance rates are on the rise, and some insurance companies have completely stopped writing business in the transportation industry. As the insurance climate continues to tighten, there are a few simple steps that will help you to find the most competitive rate for your needs. The cheapest is not always the best – many companies are offering enhancements to their policies in their quest to write quality business. The following are bits of information that your insurance agent, including myself, deal with every day.
As an insurance broker or agent, quoting rates is a major part of our work day. Information is important! Be prepared to discuss your business with the insurance professional that you choose. Start with your drivers, if more than yourself, and have their pertinent information available, including their experience. You should also have all of your insurance history for the past three years available (including all of the dates and policy numbers).
Loss Runs are going to be a request that you will see more of as the insurance climate continues to harden. Even if you say that you have not had any losses, underwriters will want to see documentation. Your agent has to provide them to you and they should be available within a couple of days from the insurance company or companies. As a business practice, you should always request them from your agent at the conclusion of each policy year. The standard practice is that they will request three years of Loss Runs, but some underwriters may request more. Many underwriters will not bind a new piece of business without those Loss Runs.
Your equipment list is important, too. Be sure to have all of your VIN numbers, because underwriters have been requesting them more often than not. Have a clear understanding of your equipment values. Do not over-insure your equipment – the insurance company will only pay out what the value is at the time of a total loss. If you have a lease or if the payment schedule on your loan does not pay down as the equipment depreciates, discuss gap insurance with your agent. It is a hard pill to swallow if the insured value is less than the buyout or payoff at the time of a total loss.
Filings with the DMV (MCP65) and the FMCSA (BMC91) made on your behalf by the insuring insurance company represent that you have insurance for your trucking venture. These filings support your authority and it is illegal to operate without active authority. Both filings to the DMV and FMCSA represent that all vehicles operating under your authority are insured. Many of you have run into the problem of trying to delete a vehicle from your policy without selling it. Since all vehicles are purported to be insured, whether on the policy or not, the insuring company wants all owned vehicles on the policy.
Cancellation of a filing creates another issue. Most of you are familiar with receiving a cancellation notice from either the DMV or the FMCSA (or both) thirty days prior to the expiration of your insurance policy. This is a natural course of business, since the insurance company does not want to be on the risk if the policy does not renew. Now, that brings up the requirement that the insurance company is required, by statute, to give the DMV or FMCSA (or both) a 30-day notice of cancellation in any event, such as non-payment of premium or voluntary termination. If you request cancellation of your policy, the insurance company is obliged to give both the state and feds a 30-day notice, so taking that into consideration with processing and mail time, that may take as much as 40 days. That is 40 days of insurance that you will be obligated to pay for. This one requirement is the reason that insurance and finance companies usually want 25% as the down payment on new policies that require filings. It is not as simple as calling your agent to request a cancellation. Your insurance agent will require you to sign a cancellation notice, which the insurance company will require. If for any reason there is a monetary deficiency, you will be liable for the balance.
The New Year will bring about more things that will impact your lives and businesses, so stay ahead of it by investing the time and energy into discussing any concerns with your agent. You may not agree with him/her, but it will give you a better understanding as it relates to your insurance coverage. It is too late to ask questions after a claim has occurred. Take the time to review your policies and do any necessary housecleaning to start the New Year off right. If you have any comments or questions, I can be contacted through California Plus Insurance Service in Modesto, CA at (800) 699-7101.
