March 24, 2017

A Change in Underwriting Guidelines for Trucking

Trucking Insurance companies that write auto liability coverage for long haul trucking and transportation carriers are tightening up their underwriting guidelines and increasing their rates in the California and several other states. There are several insurance companies that have pulled out of the long haul trucking market in recent years. There are others who have remain players in the transportation market but have tightened up their underwriting guidelines to try to limit their losses. The reality is that in recent years and even more so in recent months finding low cost auto liability coverage for long haul trucking operations is becoming more and more difficult. Especially if the transportation company is carrying a commodity like household goods.

Insurance companies and some risk retention groups who used to offer coverage for long haul truckers including household goods movers who were operating long haul no longer offer coverage on this specific class of business. Even the insurance companies who still write long haul coverage’s are now looking at additional factors like safety information on the DOT’s safersys website. Information about each and every interstate carrier is posted and updated regularly and is available to the public via the internet.

The information that is collected about a transportation carrier during a routine inspections at weight stations is posted and kept on the DOT website for insurance companies to utilize when evaluating a risk. Now a days more and more insurance companies are basing their decision to offer a quote or to issue a declination based on this data. As a result, trucking firms that would once be able to obtain several competing insurance quotes from multiple carriers are now struggling to find any insurance coverage at all. In fact, if a transportation company has as few as two out of service alerts on their record for the last two years most insurance companies will decline to quote all together. Other insurance companies will offer a quote that will be so high priced that the trucking company cannot afford the coverage that it requires in order to stay in business.

Unless a new player steps into the transportation insurance arena long haul trucking companies are facing rising prices and a harder time trying to find a carrier that will insure them for commercial auto liability. Of course there is always the California Automobile Assigned Risk Plan for businesses and individuals who were not able to obtain coverage in the normal marketplace. However, these policies are often expensive, less responsive to customers service requests and policy changes and limited to offering only those coverage’s mandated by the state or federal government.

In light of these facts, every trucking firm that engages in long haul operations should start searching for coverage as early as 60 days before their auto liability coverage is set to renew. Owners of trucking firms should also be aware of the restrictions that their industry is facing as a whole and be prepared to have their coverage placed in the Assigned Risk pool. That means processing the renewal application a couple of weeks ahead of the due date to allow the assigned insurance company time to receive your application from the state assigned risk office and underwrite and issue the policy and release the filing form to the carrier as proof of coverage and confirmation that the MS 90 endorsement was added to the policy.