Insurance for 4 car hauler

It is no secret that insurance premiums have skyrocketed over the last few years. Many trucking companies are seeing 40-50% increases, some even 100% increase like you have. This sucks but is fairly normal.

My questions for you, not being an arse just trying to get to the bottom of things;
1) On the questionnaire aka "random audit" did you answer any of the questions differently than you did when first obtaining insurance with Progressive? Did you move or change your address to a location that is a higher risk, i.e. move closer to a city? They claim you were improperly insured, which is possible even though you have not seen a change to your coverage amounts. The language used in the policy is very important. Some agents will insure a pickup truck and trailer as a hot shot rather than a car hauler, claiming you move open deck loads and failing to declare automobiles as your primary cargo. There is a huge difference in the rates for general freight and machinery vs. automobiles. It is not as simple as obtaining $150,000 in cargo and you are covered for anything you haul, there are many exclusions and premium increases for specific commodities.

2) What do your loss runs look like? You are coming up on your third year in business, how many claims have you had? What was the total amount paid out to settle these claims, if any? Insurance companies look at the ratio between premium paid and claims paid. You have paid $30,000 in insurance premium over the last 24 months, so a great loss run would show $0 in claims, a good would show no more than $5,000 in claims and a poor run would be anything over that amount. So, one little claim in year two, assume you had no claims year one or your premium would not have gone down (unless the agent played games or misrepresented you for renewal).

3) What does your overall operation look like? SMS score (DOT inspection and violation history), financials (any late pays or bounced payments to the insurance company or other bad credit issues), driving record (moving violations, accidents in your personal vehicle, etc) and do you have a hired driver or is the truck owner operated?

4) Did you start moving salvage or brand new cars? Insurance is highest for brand new cars and second highest if you haul salvage, these are both high risk cargo albeit for different reasons. New cars is constructive total loss and diminished value (the dealer/manufacturer wants retail for even the smallest damage). Salvage is high risk of damage to other vehicles in the load and the general public since they are usually riddled with loose parts and may have fluids leaking.

These are some of the issues that affect insurance premiums and are why one trucker will have a great rate while another in a similar situation will not. It is to be expected to see a 25% minimum increase in insurance premiums this year, there is a tightening of the market meaning less underwriters are willing to issue policies for hotshot type car haulers, or any automotive related hauling. I am hearing reports from many of my customers that they have seen even higher increases in premiums. Insurance was the final reason I exited the fleet owner side of this business and decided to concentrate on consulting, our premium doubled for our renewal due back in January 2018.

Sorry to give you bad news, but it looks like you need to keep shopping around, Progressive really sucks. I would ask your agent what other carriers he has shopped your policy with since he claims Progressive is the cheapest. Is he a true independent agent or is Progressive the only line he writes so he is just saying they are the cheapest?

 

Sounds a bit high, even for CA, TX, LA & FL.......our company has been killed over the last few years by car carriers and we also have dramatically increased rates/premiums.

I just quoted one in San Juan Capistrano this AM....45 year old operator with no accidents or movers......Ford and trailer....$ 1MM and phys dam....no Cargo.....CA MCP Filing, Intrastate, 100 mile radius = $ 16,772.

Same risk, changing to long haul and adding $ 150,000 cargo = $ 25,902

 

Yes, the cargo is the killer for car haulers. Switch to general freight, even open deck hotshot loads and cargo will be a third to half price.

 

Yeah, but......

We run CAB reports (consolidation of FMCSA and other related websites), and that report will indicate what the MCS-150 shows for commodity hauled.......then as an underwriter I tend to look at the "shippers" listed on the DOT inspections.........hard to have an auction house shown as the shipper when you told underwriter you were hauling flat deck stuff.

 

Agreed, and not suggesting the motor carrier actually misrepresent their operation, rather suggesting they switch what they haul rather than let insurance rates put them out of business. Sadly as a compliance consultant I get questions like these daily from small companies that had been trying to beat the system and got caught.

 

My advice is to find a different agent. They all tell a different version of the same story. I had a huge number on my loss runs this year. The insurer that paid the claim non-renewed us. The agent took until the last second to present the outrageous new quote. Long story short, new agent, new insurer. Rate went up a whopping $275 a month. Shop around.

 

Are you a broker? If so can you sell to a company based out of Delaware ? I’m looking for a broker for rates. Thanks

 

We are a MGA, owned by a major insurance carrier. We transact with Retail & Wholesale brokers, and write 1 power unit and up accounts in CA, OR, NV & AZ......risks located outside of those for states require at least 10 power units.