Deadly Sin #1
HIDDEN IN YOUR INSURANCE PROTECTION
As strange as it may seem, your biggest problem might be your current agent or broker. If they do not handle truck insurance on a daily basis, they are out of touch with our market! Keeping up with the truck insurance market is a full time job. If your broker is not independent or if they don't specialize in truck insurance they may not have the tools available to do a good job. You may be losing out in better protection and lower premiums.
Our business is driven by change. Today we are dealing with an increased supply of truck insurance companies and a lower demand for their products. There are now insurance companies entering the truck insurance market that do not have the expertise you need in an insurance carrier. You need a company that understands how a trucking company operates and what you need in the event of a loss so you can get back to work. It's a great time to get in on some lower rates but make sure you do this with a carrier (and agent) that specialize in truck insurance.
This is why it's best to ask a broker who specializes in truck insurance to quote your insurance. Why is it best? Because they represent many different insurance companies.
Here are a few insider tips to keep your rates down:
Slow down and keep your driving record clean. This alone can save up to 30% on your rates. Prove to your new company you are a good driver. Ask your present company for a 3 year loss history. Where you park your truck at night counts! Check with your broker if you have choices where to park. Protect your investment. Lock and remove your keys from your truck no matter where it's parked. Don't put a new driver behind the wheel until you have company approval. Routine maintenance and safety inspections are worth their weight in gold.
Deadly Sin #2
INSURANCE COMPANY RATINGS
Did you know that all Insurance Companies are given a report card? Do you remember the report cards you received when you were in school? The letter A was for excellent, B was for good, C was for average, and D was for poor.
Insurance companies are given a "financial" report card with these same letter grades. The company who grades them is called the A.M. Best Company. Their purpose is to protect you from buying insurance from a company in poor "financial" condition. When you buy insurance your broker should tell you the grade of the company he/she is quoting. It is safest to buy insurance with a company who has a letter grade of A or B at the lowest.
Here are some other reasons a company's grade might affect you:
Poorly graded companies can mean a poor financial risk for you. Some truck brokers might not accept proof of insurance from companies with less than an "A" grade.
Do you know if your sub-haul contract requires you to buy insurance from an "A" rated (grade) insurance company? It is better to know what you need before you begin shopping for a "good" price. Tell your broker you need an "A" rated company when you ask for your quote. The cost to cancel and rewrite a new policy is very expensive.
If you receive a quote from another broker and are not certain about the A.M Best Company Rating, then look it up at with AM Best online.
Deadly Sin #3
ADMITTED VS. NON-ADMITTED COMPANIES IN CALIFORNIA
The state protects you when you buy insurance from an admitted company. Admitted companies are companies that are licensed in the State of California. They contribute money to the California Insurance Guarantee Associate (C.I.G.A.) The State sets aside this money to pay claims in case an admitted company goes broke. Non-admitted companies do not contribute to the C.I.G.A. fund. If a non-admitted company goes broke, there is no guarantee your claim will be paid. However, non-admitted companies are not all bad. The most important thing about a company is their A.M. Best rating, but you should know that you're asking for trouble if you buy insurance from a non-admitted company with a bad A.M. Best rating.
When insurance prices go up there is a demand for lower prices. In the past this opened the door for scams and schemes. These offers are usually very low, and often they have names that sound like nationally known companies. If you get a quote that sounds too good to be true, be careful, it probably is. Ask questions. Ask for the name of the insurance company. Be certain to write the entire name down. Then call your broker and ask him to look it up for you. In the past these companies were not rated. They were called "off shore". Many truckers have been hurt by these scams.
If you are in doubt, remember your friends! The A.M.Best Company gives your insurance company a financial report card. The State of California protects you with the C.I.G.A. fund. And a truck insurance broker can help you avoid problems. If you are ever in doubt, give us a call. We'll call the Department of Insurance to check your company's status and A.M. Best rating. We promise not to play games with your business to make our living.
Deadly Sin #4
POLICY ENDORSEMENTS
Most people don't think about endorsements. If they do, they're not certain what that word means. People know that lawyers write them, which makes the words hard to understand.. Do you feel this way? Let's discover the loophole that will help us avoid this "sin". Endorsements remind me of yellow post it notes. You know, the little notes you stick on top of stuff. Endorsements are like that. They get stuck (attached) to the policy. They are legal contracts. They either add or subtract coverage to the policy.
All policies have endorsements. They are listed by form number on the Declaration page. The Declaration page is in the first part of the policy. Read it carefully. Does anything there look like it could cause you a problem? Call your broker if you are worried. Don't wait until there is a claim.
How do you know do you know if your policy is complete? That's easy! Each form has a number. Match up the form numbers on the front page with the attached forms. If you are missing one, your policy is not complete. You need to call your broker. Let them know someone made a mistake. People make mistakes, but you need a complete policy. Plus, you will impress your broker!
Insurance policies are not all equal! The basic policy is standard. However, endorsements change your protection. When you shop for the best deal, be careful. Sometimes lower prices subtract protection. Don't be afraid to ask questions. Listen to what the broker says. Does the broker give you a clear and direct answer? Or is the answer vague and rambling? Your broker should make you feel confident.
Here are some insider tips. The forms described will help you avoid "Sin #4" death trap:
Non-Reported Driver - What may happen? The company might deny a collision claim. The collision deductible might be doubled, and the policy might be cancelled or non-renewed. Radius Restriction - What may happen? The company may deny a physical damage loss if it occurs out of radius. Cargo Commodity - What may happen? There is a cargo loss. The type of cargo lost is not listed on the policy. Your claim is denied. For example. Your policy states you haul groceries. You have a loss and your load is steel. The load of steel is not covered. Bodily Injury & Property Damage Deductible - What may happen? You have an accident. The other party is hurt and so is their property. You pay this deductible to the other party. This payment is on top of your own collision deductible. Property Damage Only Deductible - What may happen? You damage another's property. You pay this deductible to the other party. Again, this is on top of your own collision deductible. Newly-Acquired Vehicle Limitation - What may happen? You buy a new vehicle and drive it home. You do not add it to your policy. The next day it is in an accident. Your claim is denied. Many dealers think you have 30 days of automatic coverage. Cargo Theft Limitation - Limited coverage on cargo target commodities. Target commodities consist of liquor (except beer and wine). Tobacco products including cigars and cigarettes. Seafood unless it's canned. Cameras or film; wearing apparel; computer equipment or components and software. Other items include fax machines, photocopies, VCR's, HI-FI's, stereos, compact disc players and televisions. Unattended Covered Vehicle - What may happen? This form excludes cargo loss by theft, unless at the time of loss the covered vehicle is garaged in a building or parked in a fully enclosed or fenced yard.
Before you hit the panic button, read your policy. If you have a problem with it, perhaps, one of three things happened.
You didn't tell your broker enough about your business. You did tell your broker and he/she wasn't listening. Your broker doesn't have enough knowledge about truck insurance. In any case, call your broker and explain the problem. Get it solved before a claim occurs. If your broker can't help, find another broker.
Deadly Sin #5
SUB-HAULERS
Does anyone ever lease their truck to you? If so, you may have a workers compensation exposure. You may be responsible for their injuries in certain situations.
Here are some things you can do:
a. You can buy Worker's Compensation insurance (expensive)
b. You can buy Occupational Hazard insurance (affordable), or...
c. You can call us and let us evaluate your circumstances and see if there is a legal way to work around the problem.
If you hire subs to haul your overloads, you will need special coverage. It's called "Hired and Non-owned Auto Liability". This coverage can be added to your commercial auto policy. Look at your policy. See if you have this coverage. If you get confused, call your broker. They will check your policy and tell you.
DEFINITIONS:
Non-owned autos are autos (or trucks) that you don't own, but for which you may be held responsible. Hired autos are autos (or trucks) that you rent or lease (short term).
Check to see if your subs are operating as true independent contractors.
Deadly Sin #6
MISREPRESENTATION - DO NOT LIE!
We live in a world that "plays" to win. No matter what the cost. People think it's OK to lie. It's no big deal. Everyone does it. People get away with lying everyday. Some get rich! But wait a minute! What if the company finds out that you lied? Can they do anything? Yes they can and yes they will. However, a lot depends on what you lied about.
Do you know what happens after you buy insurance? When the broker says, "you're covered," do you think, "it's a done deal?" Sure you're covered, but there is one more step to this process.
After you leave the broker's office he sends the paper work to the company. The company has 60 days to double-check it. If you lie about something important and they find out, you might be canceled. When this happens, people you work for are sent notices of cancellation. The notice tells why the policy was canceled. Would this bother you? What might happen if you have a claim? The answer depends on more than one thing such as, the company, the adjuster, case law, and the size of the claim. There is a risk the claim might be denied. This creates problems. One of which might be losing your job.
To be safe you better avoid that nagging sin that prompts you to lie. Tell your broker the truth. He knows which company will quote your insurance. Then you'll have peace of mind, and that's what insurance is all about!
Deadly Sin #7
CO-INSURANCE CLAUSE
This part of an insurance policy reminds me of a childhood, playground ride. As children, we went to a local playground. I especially liked one ride called a teeter-totter. Do you remember it? It was a long, narrow pole with seats at each end. A bridge in the middle held it up. The ride was fun, but only if both children were the same weight. The equal weight made it easy to go up and down. But, if one child was heavier than the other it wasn't much fun. The child who weighed less was left sitting up in the air. His legs couldn't touch the ground. It was a helpless feeling. The child on the ground controlled everything.
Why does this remind me of the Co-insurance clause? Because this clause works best when you insure your property for its true value. It's just like the teeter-totter. You tell the company the true value of your property. The company charges your premium on that value. This makes the weight even on both sides. It's a fair deal. If you have a loss, the claim is settled. You are happy because the claim is settled at the true value of your property.
A "Co-Insurance Clause" tells the company the correct value of your property. What happens if you understate its value? Several things happen. One is you pay less for your insurance. Another is you are out of balance with the company. You are on the teeter-totter with a heavier player. If you have a claim, you are out of control. The company will severely penalize you. Why? Because you are not playing by the rules. If you have a loss the claim will be settled but only at a fraction of the true value of your property. You will be very unhappy, and it will be your own fault because you were not completely honest with your company.
Usually, the Co-insurance Clause affects your physical damage, cargo, and equipment floater policies. A Truck Dealer will give you a good idea of your equipment's current value. Check your policy to see if you're insured for that value. Look at your sub-haul contract. Double check your cargo limits. Then look at your policy. Are the limits the same? Does the contract state that you do certain things, for instance, does it state that you "waive your cargo co-insurance clause?" The point is that what you actually do should match what the company says you do on your policy. If you don't understand this, fax your policy to your broker. Make him double check it. You do not want a penalty at the time of loss. Make your broker work for you and answer your questions.
Lisa Sherer is the President & CEO of Berrier Insurance Agency, Inc. ( http://www.berrierinsurance.com ) located in Northern California. We have specialized in trucking insurance since 1981, serving California, Oregon, Nevada, Arizona and coming soon to Texas. Please contact me at (888) 472-4915 or email me at lisa@berrierinsurance.com.
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