A Poll: Should commercial carriers be allowed access to Facility Insurance?

[Michael Ludwig]

The OTA accepts that commercial carriers should have access to Facility Insurance in principle and wants to make the stay short, expensive, and conditional.

I reject this premise. I believe that a carrier the voluntary market has refused has been correctly judged unfit, and time-limited access to Facility Insurance just defers that verdict while still leaving the public at risk, and legitimate carriers paying for their mistakes.

To be fair, open, and honest, this opinion is a double edged sword. What if you, or your company, screws up so bad that your insurance carrier drops you, or the market turns and your insurance carrier gets out of the truck insurance business? You, or your company, could, possibly through no fault of your own, be temporarily left with nowhere to go for insurance other than Facility Insurance.

With this in mind I would like everyone to consider the above and respond to the following poll;

 

[Nawk]

Tough Question... I see both sides.

 

[MikeJr]

I see both sides also, but public safety is the trump card for me. No.

Keep well,
Mike

 

[loaders]

Perhaps yes, for a limited time that corresponds to an improved safety rating or proof of documented, verified remedial action to correct past mistakes.

 

[Jim L]

I would like to have a hard definition of 'time-limited'. I might be persuaded if it were 3 months, while a carrier is getting quotes and solidifying the relationship with a new insurer, but then the administrative work is a nightmare.
I think that if they got rid of commercial facility, other players may enter the field of insurance. For the time being, a newcomer would be stuck with an open-ended facility bill that they have to participate in.
If facility was toasted, the good carriers would thrive and poor carriers would be forced to change their ways or get cut loose.

Whatever happens, facility, in its current form, has to change.

 

[JACKBURTON]

This is just going to turn into a carriers who subsidize it vs. brokers who don't, right?

 

[Ins-Broker]

It's not much relevant now as there are other insurance companies offering policies for new and questionable carriers.

 

[JN1981]

It's not much relevant now as there are other insurance companies offering policies for new and questionable carriers.

Then let those new companies take the risk on the new and bad carriers. Our premiums shouldn’t go to subsidize companies that can’t get insurance in the general market through Facility.

 

[Michael Ludwig]

Bumping for more views and participation.
If what @Ins-Broker says is true, and I have no reason to believe it's not, then @JN1981 is 1,000% correct. Let those companies take the risk, and close Facility to commercial entities.

 

[TRKINSURE]

**cracks knuckles**

I love that the OTA and “Facility Task Force” is discussing this without truly understand the insurance landscape within transportation.

On face value, Facility is not where you want to end up. Usually for those carriers who lack compliance understanding or frankly, caring.

Or due to a carrier’s bad loss history, some which are bad luck and some who truly don’t care about what carnage they cause. Keep in mind, those types of operators (compliance and bad losses) have friends in the industry and are constantly playing games, moving from “Plan A” to “ Plan B” without a hiccup. Moreso the former than the latter.

Then you have the 3rd category; no market appetite.

Is it fair to put a single unit car carrier into this group because there is truly no appetite for car carriers in ON? Or how about boat haulers, or scrap metal haulers (just to name a few).

I think the answer to this is complex and I don’t fully know what it is. But to brain storm;

Facility should look to rerate operators who have bad crash values. Currently, they only surcharge (only 5%) after the 2nd accident on a PER VEHICLE basis. Vs the rest of the market who surcharges the entire fleet, based on the value of the loss to ensure profitability.

Facility should create a subset market for those who are in the third group, no market appetite. It’s not fair some of these guys are put into Facility because no market likes that type of business.

Those who have compliance issues should have access to only a 6 month policy and only renewed or moved into the standard market if intervening steps are taken to lower scores.

I’ve also suggested that Facility eliminate the use of the OPFC 49 which allows insured to opt out of DCPD (Ontarios no fault coverage for NAF accidents). They’ve told me, because they are a licensed insurer in ON, they Must offer that form (which saves insureds approx 40% of their Facility rates).

This isn’t an exhaustive list, just to generate some ideas and understanding. Facility should also be tied somehow into the MTO so records can be shared to help eliminate these chameleon carriers and mandatory fines for those brothers, uncles and cousins who help support them with their plan B’s and C’s.

I’d love to hear some feedback or additional ideas on how to stop the growing problem with Facility.