Question
Connie, Have you noticed that every truck writing company is raising their rates out there and getting increases? In our area, there isn't one company that isn't asking for increases on even the cleanest of accounts.
Do you know of any companies that are not jumping on this band wagon? If so, who are they? In our area, we have had such a soft market for so long that our truckers are freaking out over the cost of present day coverage. Of course, they don't realize that they have been paying less than the rest of the country for years and they still will be.
How has this hardened market effected your area? Aren't you finding that you have to increase every body, including the squeaky clean accounts?
Mel
Answer
Mel,
The market is tough here. For example, in Wisconsin, I've got access to as many as 12 truck insurance markets.
Every one of them has sustained increases. The increases have ranged from 5% to as much as 50%. We started a very pro-active underwriting approach with our clients. In the past, I'd shop the markets, discuss the findings with the client and mail them the best proposal based on their selection.
Not any more, now they get them ALL. Sometimes, that 5 or 6 quotes. Other times, it's one and a list of denials.
Recently, one of my "perfect" clients gave me an earful because the Liability and Physcial Damage increased 9% and the Cargo increased 20%, and there were no losses or violations AND he reduced value of equipment by $32,000. So, I gave him all the quotes I had gotten. For a single unit motor carrier, premium ranged from $9338 to $14,150.
None of our markets have exempted themselves from the rate increases. In fact, the majority of our clientele is above average with MVR's, yet we find the insurance carriers scrutinizing everyone to the point of "preventative underwriting".
Also, with this current market, we are scrapping with underwriters on rates into the eleventh hour.
How about you?
As for the future of this market, well, frankly I don't see it calming down for some time. The days of 3 or 4 moving violations without insurance penalty is just about gone. Or at least, at the price one might be willing to pay.
Answer
First of all, the guy who only got a 9% increase in the L & PD should be jumping for joy! That sounds like a great deal in this market!
We are really struggling here as well. We are also agressively marketing our accounts but it seems as though all the underwriters are so swamped with submissions from all the other agents inthe world doing the same thing that they are getting pickier and pickier about who they will or will not quote.
I had to tell a customer who hasn't had a loss in the history of his career, 21 years, insured with the same company the entire time, insured with our agency this entire time, that he had to take an overall 15% whack. OUCH, that really hurt!
We are now willing to split accounts just to get quotes and affordable coverage. What I mean by this is that we have always been an agency who writes all lines in one company. We have never believed in splitting the coverages out among different carriers. However, we are not opposed to that anymore. Thankfully we haven't had to do it but a couple times for most our carriers are darn good insureds but geez, this just never ends. I'm thinking that we are looking at this trend for at least another five years. And I don't expect that these costs will ever come back down to where they have been in the past. We just have to face it, our clients in this part of the world have been experiencing dirt cheap insurance for a godd 10-15 years. This is going to be a long hard haul for those who are unprepared and not of the caliber carrier that the majority of companies are looking for.
Do you have a market for household goods carriers? I have a local cartage guy with ICC authority who operates within a 300 mile radius and his insurance company is not renewing any HHG carriers? Any suggestions? Auto-Owners has already turned them down.
Mel
Answer
Mel,
HHG may as well be radioactive nuclear waste. I have no one willing to look at it. Now, there is a company out of the Chicago area (or there use to be) called Transguard. There was an affiliation to Vanliner at one time. Try a search on both of those and see what happens.
We too have had to look at monolining coverages. Just did it this week for one client and saved him $1500 annually. I explained the pros and cons and he made the call.
At this point, I think we all have to do whatever we can to help the client weather this storm.
Answer
Truly so, truly so ... I will try and find the skinny on Transguard, thanks for the tip!
Mel
Answer
I have been amazed at the cost of insurance for the last year or so.
The HHG people even if they insure thru the agents or company are being ripped off to the 10th degree.
About a third of my customers are with van lines. Most have perfect driving records and claim ratios less than one percent, so why the rip off???
I have a customer that has 10 trucks, all flat beds and they only run the three western states. He just renued and it went up a little over $20, 000 a year.
His rates even droped a penney a mile ofer the last year.
Maybe OOIDA needs to get congress to take a look at all the insurance companies holding truckers hostage.
HAPPY MOTORING AND I WILL...SEE YOU AT THE TOP.
russell
Answer
Try looking for the forest beyond the trees Russel if you can see beyong your little world.
Yes the Oil companies have raised fuel prices and such, but the you have all these supposed "BUISNESS" men and women trashing new trucks that they can't pay for... Who pays for this..? the rest of us do. You have guys burning their trucks or selling equipment to make payments and then making claims.
The rates wouldn't be going up if there wasn't a reason for it.
Trucks used to be made of steel and you could hit something and reapir it... Now if you have an accident, the truck litereally decintergrates itself to absorb the inpact like cars and are totaled most times.
At 100K a pop, it gets expensive. I am by no means agreeing with what is happening, but with equipment designed to total itself on inpact and inadiquitly trained drivers playing bumper trucks on the highways... What do you expect to happen..?
Someone has to pay for it...
Member of OOIDA since 1997
NRA Supporter since 1976
TFBU: V.P., Dept of Defense and Honorary Chef
Answer
Russ,
For months there have been posts about the insurance premiums taking off. I know that both Mel & I have posted with regards to this issue.
This has been a long time in coming. The insurance market has been soft since the mid-80's. It had to correct sooner or later. It took nearly 15 years and during that time, truckers have reaped the benefits of the soft market. Now that the pendulum swings back, everyone is screaming.
What's happening specifically in the truck market is a direct result of years of permissiveness and greed. Truckers with 3 page MVR's still driving. Trucking companies hiring anyone that can hold a steering wheel thru 6 weeks of driver school. Keeping a guy with a DUI just because he's your hardest runner.
Well, the public got smart, with the help of the lawyers and the legal system. A claim that would have settled for $300,000 in 1980 is settling for $2 million today.
When we talk about a 16 year old driving, we don't think we should pay the same premium. After all he's young and inexperienced and we are the seasoned driver. Why should we be penalized?
Yet, there are people out pushing for 18 year olds to driver trucks. When it comes to experience, the 21 year old driving a $110,000 Peterbilt is no different that a 16 year old driving a Corvette. But, they don't want to pay any higher premium to compensate for the inexperience. So, the motor carriers in need of "steer wheel holders" put our young man in school and give him a job when he's done. Then he's turned loose. Statistically, the inexperience will appear in either accidents or violations.
Then, it's the insurance company that is blamed for "putting him out of a job". And that is just utter BS.
The insurance company did not steer that truck into a pole or another vehicle. The insurance company did not mash his foot on the accelerator. And the insurance company never bought him that beer or shot and made him drive.
Russ, you understand the economics of the insurance just as I do. It's time for people to be accountable for their actions and we all know that paybacks can be a B.
As for OOIDA getting Congress to look into the "insurance racket", well frankly, I don't know if they would do that. It might be worth a try. But, keep in mind, they have their own for-profit insurance entity.
You know, Russ, my business policy went up 43% in September. There was no explanation. The consumers will pay, and we are.
[This message was edited by Connie the Insurance Lady on April 09, 2001 at 21:18.]
Answer
I am not an agent but merely a driver and have some thoughts on what has been said.
First off think one of the biggest problems facing our industry is the increasing number of lawyers capitolizing on the limits of insurance. As you stated a 200,000 dollar claim has turned into a multi million dollar one because these personal injury attorneys have found another well to tap. Not all of it is their fault because we in the industry lose to public perception due to the actions of a relatively small percentage. That is up to us to remedy and is no fault of the insurance companies.
As far as the lowering of the age limit to qualfy to drive I honestly believe some good will come from it. Not because of the youth but with the training standards proposed. It may help raise the standards to a point where someone coming out of training will be much more qualified to operate a vehicle and therefor present less of a risk to the insurer. And I do realize that most of the larger outfits are self insured but thse that hire out of these schools would not take as severe of a hit insurance wise. I am just one of thos that believe that there is virtually no difference when it comes to learning a trade between an 18 year old and a 30 year old if both have no experience driving anything larger than a car. The difference will come in the quality and intensity of the training.
As one of you folks stated there was a customer with a 21 year history that was clean but still incurred a 15% increase. I feel that this is nothing but profiteering from those that do well and run safe and prove it. These are the folks that should be held up as an example to those that run haphazardly and pay the premium for such. It should be used as an incentive to promote safer more responsible driving which in the long run saves both the operator and the insurance company. I always thought that the increased premium was to cover the added risk associated with writing the policy but it seems that such is not the case.
All will pay so as not to effect the bottom line. I am not against the American way nor that of a business showing a profit but there comes a point of responsibility not only to the shareholders but to those that make the profits possible. And the more that shut their doors wheter from increased oil, insurance or equipment prices effect the bottom line of all those involved. you folks just sell it and do not make the rules so please believe me that their are no ill feelings towards any of you.
Been there, Done that and took the time to learn from it. There are still many battles to fight and conquests to claim. Have to go as times a wastin. OFFO