Insurance 101

May 12, 2014 | Articles

You should pay special attention to every component that can affect any part of your insurance program. Generally speaking these are the drivers, equipment and contract Master Service Agreements with shippers to ensure any problems are resolved before they happen. Installing procedures to ensure no driver ever leaves the yard with a faulty piece of equipment and without the proper CDL type matched to the asset being driven will save you money. Having your lights all working properly, brakes properly adjusted, tires at proper depths and inflation pressure, hoses in good condition and the cleanliness or lack thereof the tractor and trailer can be the difference in getting pulled over or bypassed by enforcement agencies. Also the culture of your business will make a huge difference in the way you are perceived by the outside public. Create the right impression by having the right attitude with law enforcement and with insurance loss control personnel. You are in a highly regulated industry with governmental agencies just waiting to get a shot at coming in your doors to review your operations and find something to fine you or write you up for.

Important Insurance items:
1. Control your agents, they are working on your behalf and should consider it a privilege to be able to be involved with your company. Set the rules for them as to how you want each insurance line rated, deductibles, financial strength of the insurance company and the final date to have proposal to you, then stick to it.

2. Drivers List, be sure to keep up with years of experience even though DOT doesn’t require it, this will help. Years’ experience can be calculated automatically each year on the drivers list from assumptions.

3. Projections for Mileage, Revenue and Units and Values, don’t let the agent determine these. When the agents present the proposals to you be sure to check this against what they are proposing. Finally, check the rating basis when the policy comes in against what you asked them to use, resolve any discrepancies.

4. Garaging locations with assets that are parked there. Be sure to be completely upfront here as some insurance companies are not filed with the some state insurance boards.

5. Keep up with losses over $20,000 in value and give every detail to your agents.

6. CSA Basic Score above the 75% threshold will cost you money.

7. (CAB) Central Analysis Bureau is being used by almost every insurance underwriter to evaluate your business and will determine if you’re offered a renewal or an initial proposal. This entity is giving you a grade on: safer data, radius of operations based on inspections, financial health, accident and inspection details. So keep those CSA scores in the non-alert status.

8. Be sure you give the agent a breakdown of your routes and radius of operations; they need 8 quarters of IFTA’s. If you have multiple terminals or are utilizing Owner Operators that are dispatched from home then the actual distance traveled for routine shipments can vary.

9. Make sure your agent has a direct appointment with the insurance company they want to approach. Having a direct appointment your agent has the underwriter’s ear and can communicate better on your behalf. There are a few exceptions where the insurance company does not have direct contracts available (Carolina Casualty, Maxum Specialty, and Northland to name a few).
Next you probably get multiple sales calls from agent making all kinds of claims:

Insurance Myths:
1. Hey I can get you better pricing by writing a short synopsis of your operations.

2. I can save you 20% on your insurance when the guy has never looked at your loss history or your account.

3. I need more time to get your quotes; I am beating up on the underwriter and will have your best number a day or two before time has run out to renew your account.

4. The insurance company told me they are going to get you really good pricing; they just have to firm it up.

5. I need a particular insurance market because I am the largest writer with them and I will get preferential pricing.

6. I’m sorry I can’t get your loss history to you quickly it takes two weeks to get back.
Of course, none of the myths are true and if you are working with an agent that keeps you strung out each year give me a call. I will work with your directly as an agent or we can discuss a consulting agreement to handle all your insurance needs. If we all try our best to keep this process as God honoring and professional as possible the outcome for all will be consistently better.

Tracy Lange, CIC, LRM
Capps Trucking Agency

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