Overdrive Magazine | Trucking Business News & Owner Operator Info
Issue link: http://read.dmtmag.com/i/611028
44 | Overdrive | December 2015 C hange to the commercial liability insurance minimum of $750,000 still appears to be months, if not years, away. Some insurance industry representatives believe an increase to $1 million or $1.5 million is inevitable when the debate is resolved. For many owner-operators and small fleets, the lower figure would be relatively easy to swallow, says Gabe Hotop with C.M. Brown & Associates, based in Per- ryville, Mo. "Most already have $1 million in coverage because the shippers require it," he says. The policyholder's experience, location and other factors affect the cost of liability insurance. An independent's yearly pre- mium can vary from $3,000 to $15,000. Hotop says the average cost for liability rises 2 to 3 percent annually, but that ris- ing cost is often offset by depreciation and other factors. "Here in the Midwest, if you've been in business for a while and have a clean driving record and your violations look good, you'll pay around $3,000 to $4,000 per unit" as a small fleet, he says. If you're up in the Northeast or running congested lanes up and down the West Coast, expect to pay more. "It all averages out nation- ally to about $6,000." The House of Representatives' version of a six-year transportation reauthoriza- tion bill included some directives meant in part to slow the Federal Motor Carrier Safety Administration's work to increase the liability minimum. The bill's draft would require the agen- cy, in developing any rule change, to study in-depth an insurance minimum hike's potential impact on owner-operators and small fleets. Ways to save Anything owner-operators can do now to improve their perceived risk will pay dividends now and when the minimum hike occurs. Here are some tips: • Use agents with direct contracts with insurers. Hotop says this can result in a better rate because you're working direct- ly with the insurance companies. Going through a broker, who represents multiple companies, adds another person to the transaction, which can increase prices. Agents can be captive agents, dedicated to one insurance company, or not. Distin- guishing between agents and brokers can be difficult. If you're in doubt, ask. Agents as a general rule hold less liabil- ity for making certain you're getting the right coverage than brokers. Hotop offers this tip for sussing out a capable agent: "If the person you talk with asks more ques- tions about your business and how you operate, it's likely they're a good agent," he says. "If all they're doing is reading off a sheet, I'd suggest not going with them because they won't help you out later down the road." • Get some time behind the wheel. For new independent operators, it can be dif- ficult to find a company that will write a policy, not to mention an affordable one. That's not the case at Progressive Insurance, according to Brett Stalnaker, a product manager, who says Progressive's average fleet size is less than two trucks per policy. Getting insurance is particularly tough for independents with safety issues, says Stalnaker, who suggests new truck owners lease with a company for a couple of years, build a good driving record and then try to get operating authority. The lanes you run and many other factors affect the cost of liability insurance. Max Heine Pay less for insurance The minimum liability debate still drags on. Meanwhile, lower your premium. BY MATT COLE Evidence from road-facing dashcams can aid greatly in settling an insurance claim, given that most truck-related ac- cidents are not the truck driver's fault. Camera use is relatively new and unlikely to reduce today's insurance payments, but insurance agent Gabe Hotop believes that one day it will yield a discount. Also, some insurers have partnered with dashcam compa- nies and can offer a 30 to 40 percent discount when purchasing a device. "It's a very preventive tool and can save you from having to make a claim," Hotop says. DISCOUNTS FOR DASHCAMS? (Continued on Page 70)