What You Need to Know About Buying Trucking Insurance

Commercial Trucking Across the Nation

Every trucker knows these two things about commercial trucking insurance: 1) insurance is necessary and 2) insurance is expensive. Beyond that what else do you know? The reply of most truckers to that question is: “Not much”. But your knowledge of trucking insurance and the optimal process for buying it can make a huge impact on your bottom line. It can truly mean the difference between success and failure of your trucking enterprise.

The saying: “Knowledge is Money” was never truer than in the context of purchasing your commercial trucking insurance. We know how busy our trucking clients are. You are providing an essential service for our great nation’s economy. Nothing is more important than keeping you rolling with the country’s goods in transit. And since it’s also true that “Time is Money”, we do everything we possibly can to streamline the trucking insurance buying process for our customers. But there is a basic level of information you must possess to get your best deal on your commercial truck insurance. It will take a bit of time and it will be worth it. So, read on.

You Need to Be with the Correct Insurance Carrier

(Did you know that just like a motor carrier, insurance companies are often called carriers? This is because they carry the risk of loss for others!)

Truck insurance carriers that provide coverage for the trucking industry are highly varied and specialized. They sell various coverages needed by trucking companies such as: liability insurance, excess umbrella, cargo, physical damage, workers compensation, garage keeper’s liability and warehouseman’s liability. Some carriers provide all these policies; some offer particular specialty niches products. Some carriers sell their policies direct through their own sales staff who are employees; others use the independent agency distribution system.

There are insurance companies in the motor-carrier specialty that select independent contractors as their primary customer base; there are others that prefer to underwrite the risks for fleets of heavy commercial trucks. And there are different companies that target trucking fleets of varying sizes, some prefer the largest fleets, some prefer the smallest still others focus on intermediate-sized trucking fleets. Visit roemer-insurance.com for quote on large fleets.

And the various trucking specialty carriers have differing underwriting preferences for the risks that they will write. These preferences are referred to within the insurance industry as “appetites.” Appetites among insurance carriers sometimes vary by the amount of risk they will accept. Some prefer to underwrite only the very cleanest companies, while others will underwrite risks that have experienced substantial claims and therefore pay much higher rates. Appetite also can refer to the underwriting parameters used by a particular insurance carrier to select appropriate risk levels and to set pricing.

These parameters may include financial performance of the motor carrier as well as operating characteristics such as average number of miles per trip, lanes of travel, specific jurisdictions in which the motor carrier operates, commodities hauled, trailer types; how long the enterprise has been in operation, age of vehicles and, perhaps most important, the quality of drivers. A fleet with a high proportion of truck drivers with numerous violations on their CDL (commercial driver’s license) will find themselves paying much higher insurance rates than industry standards. Even if their claims experience is otherwise acceptable. In the eyes of commercial trucking insurance underwriters, poor drivers equal high expected claims. And they are normally correct in this assessment.

Now that you have an understanding for the extreme level of specialization amongst commercial trucking insurance companies it is easy for you to see why you need to seek out a specialist. A generalist insurance carrier that writes a bit of this and a bit of that may offer you a trucking insurance quote, but chances are their underwriters may lack the expertise you require to get the best policy terms and rates. Also, a very important factor in choosing your insurance carrier is the quality of their claims handling. Unfortunately, accidents happen in this business. Competent claims handling is crucial to controlling your overall insurance costs and top-quality claims handling is only available from trucking specialty carriers.

Having a trucking insurance expert in your corner will also assure that your filings are properly made, and certificates of insurance are issued to your business partners in a timely and professional fashion. You never want to find yourself pulled over by a trooper who says you can’t roll because your insurance filings are not proper or have a shipper refuse to load you because a certificate hasn’t been transmitted. These are highly frustrating real-world issues that can be almost entirely avoided by trusting your insurance program to trucking insurance pros who know the difference between a fifth wheel and a steering wheel.

Insurance carriers who are generalists rather than specialty trucking markets may lack the underwriting acumen required to give you the fairest rates. Plus, their knowledge of the subtleties of the trucking industry might result in important areas of your operation being overlooked or viewed with suspicion simply because of a lack of technical understanding. Understanding of such things as required state and federal filings, over-weight/over-dimensional hauling requirements of the various states’ DOTs may be lacking from the underwriters’ toolbox.

The claims adjusting / claims settlement functions of any insurance company are vital to assuring their policy holders get top value. When these tasks are being performed by a generalist the likelihood increases that a claim might be mishandled resulting in valuable evidence for defense being lost, down time of commercial vehicles increasing and, ultimately, higher claims costs being paid.

And when accidents do happen, specialty trucking insurance carriers and generalists also have significant differences in how they respond to and adjust their claims. Commercial trucking insurance specialists know that a fast response time in getting to the scene of a serious heavy truck accident is essential in preserving evidence which may exonerate the truck driver. Further, they understand that if a trucker is not rolling, he is not generating the revenue he requires to stay in business – and pay his trucking insurance premiums! So trucking specialty companies work very hard to minimize down-time and get their policyholders’ vehicles repaired swiftly and rolling ASAP.

Now that you have a greater appreciation for the necessity of finding a specialty trucking insurance company, here are some of the characteristics to look for in choosing the best company for your trucking insurance:

Longevity. Are they in it for the long haul? Companies come and go in this industry. Especially when prices are high; we often observe numerous new entrants into this insurance niche. And when rates subside, they typically exit as quickly as they came in. As you might imagine, the newcomers usually don’t possess the same expertise as the veteran carriers and thus cannot deliver the top value for your trucking insurance needs.

Financial Integrity. The insurance industry has a number of rating services, including AM BEST, who provide financial information about the companies. This gives policyholders a tool they need to be sure the company they choose has enough capacity, reserves and overall financial strength to pay all their claims and provide the value and services required by their commercial trucking insurance clients.

Products Offered. The insurance policies or “products” vary considerably between commercial trucking insurance carriers. It is usually true that “you get what you pay for” when it comes to insurance. If a policy is priced below the competition, look very closely at the language. You may well find that there are exclusions from coverage or other terms of the policy that make it inferior to another more adequately priced policy. Read the language carefully to be sure you are comfortable with the level of protection provided. A careless buyer only focusing on the lowest rate who doesn’t examine his policy language may be left with inadequate protection.