Question
Hi Connie,
Can you please fill me in on the in's and out's of being self insured. I have the same problem as everyone else dose with the ever rising insurance costs. My Agent is not very forth comming with information on becoming self insured. Thank you....
Answer
Self-insured retentions (SIR's) are what you are talking about and are generally sold to large carriers, say 50 trucks or more.
It means that for each accident you have, you are responsible for the first 'x' amount of damages on a liability loss. Most truck liability policies are written w/o a deductible, but this is what an SIR amounts to. Just as you pay a ded. on your Comp, Collision and Cargo, an SIR would apply to liability.
The most common amount I see an SIR written in is $25,000, but you may get someone to write one at $15,000. However, that's a lot of dough, can you afford that much for every loss?
You may simply ask for a deductible on your liability policy and your agent may be able to do that for you but even a $1,000 ded. or $5,000 ded. on your liability won't help much in today's insurance market.
Your insurance agent may not write any policies with SIR's and may not be comfortable discussing them with you; or he/she may have a good understanding of your company's current condition and may not feel that an SIR is for you.
Hope this helps!
Mel
Answer
Thanks mel
Answer
Good post, Mel. Thanks for covering. I have been in and out of the office a great deal lately and have been having trouble getting online.
SIR's serve a good purpose for the right insured. But the average sole-proprietor is not financially prepared to handle a substantial SIR.