Insurance Question

Trans

Active Member
10
Just need advice from all the Pro's here about the Insurance. We recently change our Insurance from northbridge to Lynx starting today and we always had 3 Mil Liability with Northbridge but Lynx max liability is at 2 Mil. The Quote difference was way too much compare to Lynx. more than 50K so I think we made the right decision as the freight rates are going low so we had to cut down our running cost.

The question is as FMCSA is in the process of making mandatory liability coverage to a minimum of 2 MIl USD. so then our coverage won't be sufficient at that time. So what would be our options or should I not worried about this for another year due to Coronavirus? I see a lot of companies have a coverage of 2 Mil only.

So let me know the best possible solution to this, please and would you guys have made the same decision as us?
 

Michael Ludwig

Well-Known Member
20
Preamble: After reading my own reply, it is very apparent that @Trans 's post has struck a very sensitive nerve with me. I won't apologize for my reply, but it certainly is harsh and abrupt.

OH MY LORD !!! My guess is that you, or someone in your organization, just had an "OH SHIT !!!" moment.
This is really a question for @TRKINSURE to answer in detail from the insurance side, but I'll chip in my 2 cents anyways ...

On the face of it Lynx Underwriters looks like little more than a "LoadLink for Insurance Brokers" which begs the questions "What did you really buy, and who did you really buy it from?".

Northbridge (NB) is a top notch truck insurance company so my guess is their premium evaluation was spot on and you got that premium offer for one of two reasons a) they need you to step up to the plate and become a better carrier, or b) they simply don't want your business, and if that's their reason, you are in more trouble than you think.

In today's insurance market, that much of a discrepancy between two insurance premium offers should have told you that you were missing something very important. My advice would be to get a third party truck insurance specialist to compare the two policies to find out exactly what you are not insured for.

If FMCSA's push for 2 MIL minimums actually does go through, you're F**ked with a capital "F". NB can write to 10 MIL in house if you meet qualifications, and you would have been okay. Your max now is 2 MIL which means you, or your underwriter (which is not Lynx Underwriters despite their name), have to go to the reinsurance market of which I believe there are only two that are open to reinsuring the trucking market. One of them I know is Lloyds and they are very, very, very expensive.

"So let me know the best possible solution to this, please and would you guys have made the same decision as us?"

What follows is my personal opinion ... There is no chance in hell that I would have made that same decision. It appears that a stranger walked up to you and offered you a beautiful orange or a rotten apple, and without any research at all, you chose the rotten apple, all in the name of saving money.

Nobody, and I mean nobody, saves money on insurance ... ever ... what they do do is earn lower premiums. It's something you have to work at. It doesn't just happen.

You claim to need to cut your running costs. Has it occurred to anyone in your organization that you are simply working too cheap? Turning wheels just to turn wheels is not a ticket to success. Trucking is not an easy game.

Solutions: You have none. At least nothing immediate. You've already bound the policy so, barring some sort of miracle, it's likely going to take you 3 to 5 years to work your way out of this.
First, as I mentioned above, get a third party trucking insurance specialist to review what you gave up and what you actually have. Maybe reach out to @TRKINSURE , and I'm sure you'll need to pay him for his time and advice.
Second, get a third party safety person to come in and do moch CVOR and USDOT audits to pinpoint where you are deficient. Correct those deficiencies to earn better insurance premium opportunities.
Third, find someone that knows how to analyze your business model and point out how and why either your expenses are too high, or your revenue is too low. Typically an accountant (CMA, CPA, CGA) with trucking experience can do that for you. Also, either Ray Haight or Mike McCarron can do that for you.
Fourth, all three of the above are going to cost you money. If you don't have it, or can't find it, you need to prepare an exit strategy.
Fifth, if you're still reading, go to night school. Take management and administration classes. Learn how to read a financial statement. Learn how to do research.
 

Trans

Active Member
10
Hey Michael I hope your day gets better. Its Friday I can understand. Our insurance broker is Staebler Insurance (Lisa Arseneau) they are well known in the insurance market and running since 1873.
My company name is Trans 2 MC# 859493 since you are judging us so much. I never ever haul cheap loads and we are a well profitable company. The reason we used to have 3 Mil Liability is that I used to run Flatbbeds, step decks. Now we are just running Dry vans at the moment. The reason for the quote difference is limits of the Liability Northbridge Quote were with 3 M and Lynx was with 2M.

It's not a crime if someone want's to save money to stay competitive. My CVOR is super clean no tickets no points taken off and the last time my driver was out of service was on 27/07/2018.

I see that you are upset maybe because someone F***** you over with Capital F. Just because their quote was cheaper than yours and they were awarded the business. That could be the only reason for you to be upset.

You can give your suggestions but we know how to run our business our way and I already have a solution if they change the liability limits for US.

Happy Friday my friend I will go out and look for this CGA CPA and all this night school BS.
 

TRKINSURE

Active Member
15
Michael, well done. I’m not sure I would state things any differently.

To answer the question direct; @Trans what you need is an umbrella policy. There truly are limited and potentially zero options for umbrellas that sit over a $2M limit. The higher your US percentage is, the less likely you are to receive a quote for an umbrella policy. Yes, Northbridge and Old Republic can do much higher limits in-house. If the FMCSA does decide to put in place and enforce the $2M limit there are going to be a lot of Canadian fleets struggling to cross the border.

We’re also seeing fleets struggle to obtain an umbrella quote attaching at a $5M limit. Talk to the captive folks as they’re usually a barometer for things to come on their umbrella pricing/availability.

I am happy to assist though, if you want to PM me we can talk in more details.

Lastly, the point Michael made about Lynx couldn’t be more true. If they last another 2 years I would be shocked. Remember these words, when the ship goes down everyone with them will struggle to find insurance. When a insurer goes down, the market is flooded and you are the prey that the big fish (insurers) will prey on... if I were you I’d be looking for a way out this year have your broker get involved early in conversations with the specialty insurers, although he/she will likely disagree with the advice brought forth.
 

Jim L

Well-Known Member
20
Insurance is one of the biggest challenges lately to the trucking industries and I don't think it will get better until it gets way worse. What @Trans is experiencing is something that many more carriers will have to endure. Like @Michael Ludwig said, those carriers with a large US exposure, and small unit numbers will continue to be squeezed as the insurance market continues to shrink and insurers shred risk.

@Trans , insurance is all about your risk appetite. With today's risk in both the US and Canada a simple accident could easily exceed $2M claim. Are you ready to pay the difference between a very large law suit that exceeds your $2M limit? Would $3M be enough? That is the big question. $50k is a small price to pay and you'd be happy to pay it should it cover another $1M. On the other hand, you could raise your deductible to a point that covers most accidents and you might be able to save $50k there.

I looked at your CSA scores and you don't have any glaring issues except for the two log book fines. This doesn't show your history of cargo claims and also doesn't show your internal processes to minimize risk. @Michael Ludwig was stating that your back office processes for managing risk also makes up a bigger portion of the insurance quote than you think. If you have drivers with minimal experience or points on their abstracts/CVOR this will hurt your quote. If your cargo exposure is high it will pinch you there as well.

In the end, the insurer is a business relationship that shouldn't be decided by the cost per year or cost per truck. It is a business decision that you need be very careful about. @Trans may have gotten a lower price which helps him this year but he most likely severed a relationship with a well-seated insurer (Northbridge) who will be in it for the long run. Should you need to go back to Northbridge it may cost you more than you had hoped for - if they accept you at all.
 

Michael Ludwig

Well-Known Member
20
My day is great :)

Not at all a matter of being pissed off. Frustrated maybe, but not upset. I was hoping you wouldn't take it the way you did, although I was pretty sure I would ruffle your feathers.

The easiest thing in the world for me to do would have been to walk away from your post. In the end, it simply reduces my competition. I'm not judging you at all, but you asked for an opinion, and I gave you one. One that, unless my peers have been lying to me these past 40 years, is valued. You asked for advice and I gave you that too. What you do with either matters very little to me.

It is absolutely not a crime to want to save money. In fact, it's your fiduciary duty to do so, but something definitely does not sit right.

Look, I have no dog in this fight. NB is not my insurer, and I'm not paying your premium. But a 1x of 2 umbrella policy does not cost $50,000 plus, especially with a stellar CVOR record. It just doesn't happen. Something is wrong. Very, very wrong.

Best of class insurance companies are not out there to bend the little guy over. They figured out decades ago that smaller trucking companies are far easier to manage, are almost by default risk abhorrent, and insuring them diversifies, and reduces, their risk. Nobody wants to insure the Knight/Swifts of this world. The litigation retainers alone are worth more than the GDP of some small countries.

The numbers simply do not add up. You need to find out why.

Perhaps my rant does not specifically fit your situation, since you were a little light on the information, and I truly do not know who you are, but, that rant does apply to a significant number of carriers that do frequent this board, and it is incredibly frustrating to see them fail for the simple reason of really not knowing what they are doing. There are far too many people that jump into this business, chasing the Holy Grail, sure that they are going to make millions ... it's just trucking right? How hard can it be?

Hard. Really hard.

As for business, there are lots of people out there that give cheaper rates than I do. Believe me, I don't lose a wink of sleep over it. I'm busy. I'm adding iron. I am profitable. I have good friends, and the respect of my peers. What more could I ask for?
 

loaders

Site Supporter
30
For those of us that have been in this industry for many, oh too many long years, it is almost a shock to see the cost of insurance playing such a major, disruptive role in a carrier's expenditures. Don't get me wrong, we all know why we have ended up in this position, excessive litigation, catastrophic accidents, gargantuan settlements, etc, etc. One has to wonder though, if the current global financial situation was different, say similar to what it was a mere 20+ years ago when GIC'c, term deposits, government bonds, etc, all of the safe, fixed income investments were paying 6, 7 even 10%, would the insurance companies be a little more flexible? Let us not kid ourselves, insurance companies have to do something with their money while waiting to pay out a claim. Not knowing exactly when they might need it prevents them from salting it all away in something that might pay off handsomely in the future, or taking a flyer on a sketchy investment. No, they rely on solid, boring, no risk, easily accessible investments that have for the last quite a few years, been paying slightly more than ZERO.
 
Last edited:

Trans

Active Member
10
Insurance is one of the biggest challenges lately to the trucking industries and I don't think it will get better until it gets way worse. What @Trans is experiencing is something that many more carriers will have to endure. Like @Michael Ludwig said, those carriers with a large US exposure, and small unit numbers will continue to be squeezed as the insurance market continues to shrink and insurers shred risk.

@Trans , insurance is all about your risk appetite. With today's risk in both the US and Canada a simple accident could easily exceed $2M claim. Are you ready to pay the difference between a very large law suit that exceeds your $2M limit? Would $3M be enough? That is the big question. $50k is a small price to pay and you'd be happy to pay it should it cover another $1M. On the other hand, you could raise your deductible to a point that covers most accidents and you might be able to save $50k there.

I looked at your CSA scores and you don't have any glaring issues except for the two log book fines. This doesn't show your history of cargo claims and also doesn't show your internal processes to minimize risk. @Michael Ludwig was stating that your back office processes for managing risk also makes up a bigger portion of the insurance quote than you think. If you have drivers with minimal experience or points on their abstracts/CVOR this will hurt your quote. If your cargo exposure is high it will pinch you there as well.

In the end, the insurer is a business relationship that shouldn't be decided by the cost per year or cost per truck. It is a business decision that you need be very careful about. @Trans may have gotten a lower price which helps him this year but he most likely severed a relationship with a well-seated insurer (Northbridge) who will be in it for the long run. Should you need to go back to Northbridge it may cost you more than you had hoped for - if they accept you at all.
I really agree with you that a simple accident can get really expensive so that's why we have personal liability insurance I don't know the exact name for it but in case someone sues you it can protect your property or whatever assets you have and its really cheap 2-3K a year and it protects for anything related to work or even our personal matters.

You have noticed that logbook fine from almost 2 years ago that really screwed us over because it puts our OOS National Average above the limits as we didn't have many inspections done. so Intact didn't give us renewal due to that and we fired this driver a long time ago who put us in this situation.

My quote used to be very good with Intact same as now with Lynx but our limits were higher with Intact. So this OOS thing will come off from our record in September then we can go to Intact or Old republic next year and stay with them. Northbridge is always expensive than any other Insurance provider as per my experience.
 

Trans

Active Member
10
My day is great :)

Not at all a matter of being pissed off. Frustrated maybe, but not upset. I was hoping you wouldn't take it the way you did, although I was pretty sure I would ruffle your feathers.

The easiest thing in the world for me to do would have been to walk away from your post. In the end, it simply reduces my competition. I'm not judging you at all, but you asked for an opinion, and I gave you one. One that, unless my peers have been lying to me these past 40 years, is valued. You asked for advice and I gave you that too. What you do with either matters very little to me.

It is absolutely not a crime to want to save money. In fact, it's your fiduciary duty to do so, but something definitely does not sit right.

Look, I have no dog in this fight. NB is not my insurer, and I'm not paying your premium. But a 1x of 2 umbrella policy does not cost $50,000 plus, especially with a stellar CVOR record. It just doesn't happen. Something is wrong. Very, very wrong.

Best of class insurance companies are not out there to bend the little guy over. They figured out decades ago that smaller trucking companies are far easier to manage, are almost by default risk abhorrent, and insuring them diversifies, and reduces, their risk. Nobody wants to insure the Knight/Swifts of this world. The litigation retainers alone are worth more than the GDP of some small countries.

The numbers simply do not add up. You need to find out why.

Perhaps my rant does not specifically fit your situation, since you were a little light on the information, and I truly do not know who you are, but, that rant does apply to a significant number of carriers that do frequent this board, and it is incredibly frustrating to see them fail for the simple reason of really not knowing what they are doing. There are far too many people that jump into this business, chasing the Holy Grail, sure that they are going to make millions ... it's just trucking right? How hard can it be?

Hard. Really hard.

As for business, there are lots of people out there that give cheaper rates than I do. Believe me, I don't lose a wink of sleep over it. I'm busy. I'm adding iron. I am profitable. I have good friends, and the respect of my peers. What more could I ask for?
Have a great weekend my friend its Friday let's just go home and drink beer. You should write a book or something you are good at writing............... I'm a young guy learning everything I can I'm 28 and you got what 40 years of experience so.....
 

Jim L

Well-Known Member
20
I really agree with you that a simple accident can get really expensive so that's why we have personal liability insurance I don't know the exact name for it but in case someone sues you it can protect your property or whatever assets you have and its really cheap 2-3K a year and it protects for anything related to work or even our personal matters.
I would really like to know what that insurance is and what it covers. Did you get that from your broker that insures your trucks?
 

loaders

Site Supporter
30
I believe he is referring to personal (or in this case corporate) liability insurance. The same policy that protects you in the event someone slips and falls on your front steps, or if you are sued by a customer, or anyone for that matter, for whatever reason. It is usually bundled with your property insurance. Pretty common and widely available. I would be surprised Jim L if you didn’t already have it.
 

lowmiler88

Site Supporter
30
If you don't have 5 mil you are crazy to be operating a trucking company, you actually should have 10 mil to be safe. I have preached for years that the owner of the company has to be overly involved in insurance and safety it is one of the fastest ways to put yourself out of business if you don't look after it each and every day.
 

Jim L

Well-Known Member
20
I believe he is referring to personal (or in this case corporate) liability insurance. The same policy that protects you in the event someone slips and falls on your front steps, or if you are sued by a customer, or anyone for that matter, for whatever reason. It is usually bundled with your property insurance. Pretty common and widely available. I would be surprised Jim L if you didn’t already have it.
Yes, I do have a Commercial General Liability policy but that will not cover the overage of another policy that does not cover the complete claim. In @Trans example he believes that his policy will cover anything over $2Mil. I wouldn't bet on it.
I would bet that it is a Personal Umbrella Insurance policy. If that is the case the broker who offered the fleet policy should source that and ensure that it covers what the insured is hoping to cover. I have asked a couple brokers and these policies in increments of 1 million, cost more than $2k. Now that he mentioned it I will go shopping again and see what the costs are.

@TRKINSURE can you add to this?
 

Jim L

Well-Known Member
20
If you don't have 5 mil you are crazy to be operating a trucking company, you actually should have 10 mil to be safe. I have preached for years that the owner of the company has to be overly involved in insurance and safety it is one of the fastest ways to put yourself out of business if you don't look after it each and every day.
A broker pointed it out this way.
At the beginning, you have nothing to lose. Your business owes you only what you put into it so your insurance should cover that amount plus whatever you might own. Most times people put all they have in their business so that is what you want to cover.
Later on your business owes you everything you have earned over the years plus whatever you have saved from taking anything out of your business. You will want to have that covered.

In the end your insurance should match what you are willing to lose. The less you want to lose, the more insurance you need but it costs. You will have to decide how much you want to pay to protect your business and your interests.
 

ScottN

New Member
2
Article posted Saturday on this here.

I'm a broker as well, and I pretty much agree with Aaron about Lynx. If this does go through I suspect the Canadian truck markets (the good ones) will respond in kind and be able to endorse policies mid term to accommodate the FMCSA. (for a price!!)

I'm not sure an Umbrella policy will help because the underlying carrier has to post FILINGS with the FMCSA. Most umbrellas are combination of multiple underlying insurers, so this would not be practical.
Right now I don't see any process for filing one amount, then "topping it up" with another umbrella filing. Unless FMCSA changes their structure, which would be a monumental task.
 

Michael Ludwig

Well-Known Member
20
Aha !!!!!!!!!
Now we know @TRKINSURE 's name ... LOL

Good point on the filings. TBH, I never thought of it from that perspective. A carrier can't just say s/he has the correct coverage. It has to be proven, and filed accordingly.
It appears that quite a number carriers, on both sides of the border, may find themselves not to be compliant.
As for FMCSA, I would suspect that their requirement will be for completely new filings.
 

ScottN

New Member
2
This happens now sometimes anyway when carrier gets into hauling Hazmat, and needs the filing changed from 750,000 - 1 MIL, the insurer just "re-files" it.

Sorry @TRUKINSURE!
I used to frequent this form but to my detriment haven't in a LONG time. I just figured he would have given his name at some point as he has been so active here. :D

Not to give TOO MUCH praise to a competitor, but his State of the Union post is bang on. (in my opinion)
 
Top