The Insurance Review - June 2010
THINGS MAY BE LOOKING UP!
By Roland L. Enz - President, California Plus Insurance
It appears that the economy is starting to pick up. Our office has seen an increase in new business activity. Part of it is due to the time of year, but there have been inquiries from those of you that have taken this as an opportunity to go back into the trucking business after parking your truck when business came to a grinding halt. Also, new faces are coming into the office, taking advantage of this time to go into the trucking business.
You would think that the state of California would have seen more stimulus money that would have affected our industry, especially in construction. Those of you with dump trucks and hauling construction materials well know that fact. But, like all government-run programs, the money runs out as it reaches the bottom (where it is needed most). Those at the top and subsequently the following levels of bureaucracies, contractors and parasites are first in line to benefit from those programs that are intended to benefit us, down at the bottom, that make the economy work. But things are changing and it will take time. This is not the first time nor will it be the last that our great economy has taken a hit.
Since the activity for quotes has increased, information is vital. It is necessary when you are shopping for insurance that you provide your insurance agent or broker with as much accurate information that he or she requests. I am amazed how many of you are reluctant or refuse to give this information. The results of a good quote come from complete information. Without this information, quotes will be sloppy or incorrect (in many instances the quote will not be provided at all). With limited information, your request may just go into the “round” file. I do not do “ball park” quotes. No information – no quote.
Loss Runs are becoming a major part of the quote process. Your declaration, that you have not had any losses in the past, means nothing to the underwriter. They want to see it in writing, from your previous insurance company or companies, with at least three previous years of history. This document indicates any money paid out on a claim. It shows costs associated with the claim and/or shows any reserves held for the claim that has not been closed. For those of you that have had no claims, it will show that there has been no activity on your policy.
Insurance companies are notorious for keeping reserves on claims after they have been settled or closed. You should make it a regular practice to request Loss Runs after the expiration of each policy year. This helps to keep your insurance company honest and also gives you the opportunity to review any money that has been paid out on your behalf. A non-fault loss, paid by your insurance company, is still a loss against your insurance policy. All insurance information (including any loss information) should always be kept for at least three years. Quality insurance quotes come directly from good communication and accurate information provided to the agent or broker.
Loss Runs have to be requested by you from your previous and/or existing insurance agent. He or she is required to provide these to you. You might have had a bad past experience with an agent and you are reluctant to contact him, but, unfortunately, you still are required to communicate with him or her to order the Loss Runs. If there is a problem in getting the Loss Runs, you can request them directly from the company. The agent that you are working with can point you in the right direction. You, or the producer on the policy, are the only ones that can request these Loss Runs.
I am also beginning to see more requests for quotes that include General Liability. Many shippers are requiring it. For those of you that do not understand the coverage, or do not understand the reasoning for the coverage, the following is a brief review of this type of coverage. General Liability is coverage for you and your business interests. It does not cover any function of the operation of your truck. The General Liability policy provides coverage for the actions of your business and employees. The shipper’s concern, usually, involves actions outside and away from the truck, on the dock, in the yard, and in certain situations driving or using equipment that is not licensed for the road (like forklifts, dollies or hoists). It includes physical altercations, slander or property damage that may bring a law suit against you.
If you own or use a yard, the coverage is much like the liability on your homeowners’ policy. It provides protection in the event that a legal action is taken by a third party against you. This would be for such things as a slip and fall event, the neighbor’s kid hurts himself while playing in the yard on the weekend, or minor medical payments to a visitor to the yard. There are other coverages, but they are covered under the umbrella of Bodily Injury and/or Property Damage.
Most important, you have to understand that Property Damage, just like the Property Damage on your truck liability policy, does not mean damage to the property that you own. It provides coverage to a third party for any loss that you may have caused and that you are legally obligated to pay. Physical Damage for property that you own can be provided elsewhere, but it has to be purchased.
The cost for General Liability varies. For the owner operator, if it can be included on your truck policy, can be as little as $300 annually. If the coverage has to be purchased separately, the cost could be as much as $1,500 per year. Whether you are a single-truck owner operator or you own a larger operation, this coverage is crucial.
Let’s hope this little upturn in business is an indication that things are turning around – and that it will be a long-lasting recovery. If you have any questions or comments regarding commercial or any other type of insurance, I can be contacted through California Plus Insurance Service, Inc. in Modesto, California at 1-800-699-7101.