The Insurance Report - December 2005

SHOPPING FOR INSURANCE
By Roland L. Enz - President, California Plus Insurance Service, Inc.

This time of year brings out the worst in drivers and driving conditions. Defensive driving should be your most important concern when you put yourself behind the wheel. If you participate in any drinking activities, give yourself plenty of time before driving. You should use the same practice as the airline industry uses - give yourself 24 hours before driving. A DUI is the fastest way to put you out of a job in the trucking business. If you are an owner-operator, the increased cost of insurance will stress your pocket book for at least the next three years.

We are seeing an increase in driving records with DUIs, Reckless Driving and other major driving offenses. Our assigned risk business is on the increase. As a professional, earning a living by driving, the single most important responsibility to yourself and your ability to earn a living, is to protect your driving record.

This month, I want to touch on shopping for your truck insurance. Every day we receive numerous calls from you or your wives seeking insurance coverage. Most callers are ill-prepared with the information that the insurance provider needs to provide a definitive insurance quote. Information is the key. It is surprising how many callers have purchased a truck or tractor without the faintest idea what they are going to do with it. It is important to know what coverages are required.

For those of you that are first-time insurance buyers, have the following ready: know and understand what coverages are needed and what liability limits are required; what you are going to haul (be specific); how far you will be traveling; know any other coverages needed, such as non-owned/unidentified trailer and/or physical damage, worker’s compensation and/or general liability.

You should also know what your driving record is - if you have a problem, be prepared for a rude awakening. Your driving record is the most important item in getting competitive quotes. If you have less than 2 years commercial driving experience, coverage may not be available to you in a preferred market. Understand the value of you equipment. Even if you over insure, the insurance carrier will only pay, in the event of a loss, what the actual value is.

If you are shopping for competitive quotes for your renewal, be prepared to be asked for “Loss Runs”. Loss Runs are provided by your past insurance providers, and are available from your previous agents. These agents are required to provide them when requested. Loss Runs are documents provided by the insurance company indicating any losses, the amount paid, reserved and costs. If you have had no losses, the Loss Run will indicate this. At the end of each policy year, you should ask for a current Loss Run. This should be kept with your records.

All of your records should be kept for at least four years. You will always be asked for the previous information, and this will help in answering questions. Most companies require three years insurance history, some are requiring four years. If correct information is given, the insurance provider will be able to secure a firm quote. There is nothing more frustrating than putting together a quote, having the insured commit to it, and then finding out that not all of the information was correct. At that point, either the premium has to be increased or the quote withdrawn.

California’s truck insurance market, although serving over 40,000 operators, is served by a limited number of insurance agents and brokers who represent an even smaller number of insurance companies. The market is limited. We receive inquiries every day from people that have called every broker in this magazine. Pick three brokers - they'll probably have access to all of the trucking markets available to you. Many times our companies have seen your risk several times. At this point, the quote is pulled and the insurance company assumes that you are not interested. When a company has seen too many submissions, they may require a Broker of Record Letter to release any quotes. At this point, you have to decide on a broker to represent you to get that quote. Since you have taken it upon yourself to shop your coverages, one most important point is to keep the information that you provide each broker the same. The insurance industry overlaps, and if there is a difference in information, questions will be asked and answers will be needed.

The majority of all problems associated with truck coverages come from the cargo part of you insurance. Be specific with the agent concerning the commodities that you carry. You will not know what is in your policy until you receive it. It is important that you take the time to read it. If you do not read anything else in your policy, read the part that provides coverage for cargo. Know and understand the exclusions and conditions. Take the time to review your coverages with your agent - it is time well spent.

Best wishes to you and your family for a happy and safe Holiday Season. If you have any questions concerning insurance, I can be contacted through California Plus Insurance Service, Inc. at 1-800-699-7101.