Question
Connie,
I am five years from retirement and thinking of starting a small owner/operator boat hauling business. Will haul 30 foot and under (under 20,000 GCW)with heavy duty pick-up. Since I will start out doing jobs now an again, will I be able to get insurance that will be rated on my part time venture. Thanks
Answer
Just thought I'd stop in and see what was going on. I am not Connie but can give you a few tips until she gets here...
What you are describing is generally called a 'Hot-Shot' trucking business. It is hard to find insurance for this type of business because the accident history in this portion of the industry is way below the average. In addition, even though you are not driving an 80,000lb vehicle, you must, as a motor carrier operating for-hire, carrier a minimum of $750,000 liability coverage, this is not cheap. Cargo insurance is even higher than what a big rig might pay due to the fact that this type of carrier has a bad history of blowing over. Not enough weight to keep the load upright. Understand?
You can expect to pay just as much as a tractor trailer unit for this type of coverage.
As to your question of 'part-time' insurance, well, this doesn't really exist. However, if you were to operate say, for 4-6 months, then want some months off, you could lower your radius, 'lay-up' your equipment to a spare status, or drop your coverage down to COMP only, until you are ready to truck again. Beware, if you have FHWA authority, the second you drop your Liability coverage(as would be the case in the Comp Only scenario), you can expect to have your operating authority revoked. This is OK though, you will just have to have it reinstated before you start trucking again. This will cost about $100.
Most insurance companies will not be in favor of dropping your coverage, and many simply won't do it at all! Furthermore, NOBODY will drop your insurance one month, change it the next and then put it back again, that will NEVER happen. So, even if you are only operating one week a month, be prepared to pay the full rate.
Sorry but that's the way the industry works. Consider this, you buy health insurance, you pay monthly, let's just say that for a few months you don't plan on getting sick or having any surgery so you quit paying your insurance. Now, all of a sudden you learn that you need heart surgery, know any insurance company that would take you back at this point?
Insurance is a risk. Premiums are based off of statistics and cost. If we only had to have insurance when we moved our car, the risk would increase 100 fold. See what I mean? There would be no insurance industry left.
Well, that's my two-cents of the day, Good Luck! And by the way, you will want to check into authority, licenses and permits also, why not stop in at Trucking 101? You may find some information you will benefit from!
Mel
[This message has been edited by Mel (edited November 03, 2000).]
Answer
Just-Frank,
I apologize for not replying sooner, but there appears to have been a cyber-problem on my end.
After reading your post and Mel's reply (thanks Mel for pinch-hitting), I can only agree with her response.
"Dabbling" in trucking on a part-time basis is a very expensive venture. In fact, I personally cannot see how it would be profitable with all the insurance and other costs involved.
Insurance companies are not receptive to "fauceting" the insurance. On and off, the off then on. It just doesn't work that way. Beyond the issues of the FHWA filings etc, there is the issue of expense. Although, you might think a phone call or signed note requesting coverage be effected or terminated is fairly simple, behind the scenes it is a costly procedure for the insurance company. For them to enter into an insurance contract, knowing it is going to involve this type of activity, well, they won't do it. It's not profitable.
Just as you would not haul a boat across the country for what you expected to be one rate, only to find out the rate was reduced mid-stream. How many times would you be willing to enter into that situation?
Should you decide to pursue your part-time venture, might I suggest you find a motor carrier in your area willing to work a deal with you under a lease to them.
Whatever you decide, best of luck and feel free to give me a call or drop me a line if you need further assistance.
Connie
Answer
Connie and Mel,
Thank you for all your information. I have the equipment as I haul my own boat. Put out a lot of money for the truck and trailer and thought about putting it to good use. I suspected the insurance and licensing fees would put a damper on things. You did give me an idea though. A friend of mine subs to a company hauling boats. They are licensed and insured and I think he leases to them and is covered by them. I will give that a look see. Thanks again. Frank.
Answer
Frank,
Glad to help. Feel free to stop back and let us know how you made out on this.
Best of luck,
Connie