Ensuring You Stay Insured Can Make Life Simpler

by Mark J. Ram

Has this happened to you?

One sunny day you go to your mailbox and find a frighteningly official “non-renewal” letter from your broker, saying … bad news. Your truck insurance policy will not be renewed 30 days from now by the insurance company.

You’re stunned and confused. “Huh?!”… you say to yourself… “What did I do wrong?

“I followed the rules; made all my payments.

“Why does my insurer not like me anymore?!”

Well, that may not be the case. It’s very possible that your insurer still likes you.

In fact, they may be happy to continue insuring your business.

It’s just that the relationship between your insurer and your broker may have ended.

How does this affect you?

Well, for starters, it’s important to understand that it’s the broker who controls the placement of your insurance business, not the insurance company.

For this reason, the insurer cannot, in most cases, contact you with the details of a broker/insurer conflict without your broker’s permission.

And because of all the complexities involved, some brokers may simply try to find you insurance with a different insurance company instead.

So be aware, in some cases your policy may have been cancelled simply because your insurer has cancelled your broker … and since the broker is your chosen representative, the insurance company cannot legally offer you a renewal policy while you are represented by that particular broker.

There are many complexities at play in the triangular relationship between you, your insurance broker and your insurance company. It can be a huge frustration to truckers trying to navigate these murky waters.

In a few brief paragraphs, I’ll try to shed a little light on a couple of situations that may arise within these relationships, so you can make sure they work to your best advantage.

Broker cancellations

So why are insurance brokers cancelled by insurance companies?

There are many reasons, including changes in the insurance company’s marketing strategy, differences in business philosophy, poor performance and, on rare occasion, ethical reasons.

Though your business may be in great shape, your broker’s overall portfolio with your insurance company may not have been performing well over time.

Although it has nothing to do with you, it unfortunately affects you because the insurer cannot offer you renewal through a broker they’ve cancelled.

When in doubt – ask your insurance company yourself.

Understand that if your insurance company cancels a broker. they are generally not allowed to call you and say: “By the way, it wasn’t anything to do with you and we’d be happy to remain your insurance company.”

That’s called “tampering” with your broker’s relationship with you.

Few realize, however, that if you do receive a non-renewal letter you can always call your insurer directly.

If you call them and ask: “Would you continue to insure me?”

They may well say “Absolutely!”

You can even request from them the names of brokers in your area with whom they do business.

It is perfectly legal for insurance companies to help you with this information, providing you are the one who makes the initial contact.

Understanding “Broker of Record” letters

Another thing that really confounds people is “Broker of Record Letters,” also known as “Broker Letters of Authority.”

When an insurance company accepts a Broker of Record Letter signed by you on your account, it means that the insurance company is accepting that broker as your representative for all insurance matters with the insurance company.

So know what you are signing! Scenarios abound where a trucking company that already has a broker meets another broker who says: “Hey, I think I can do a good job for you if you just sign this letter.”

Now, you may believe he is simply asking to check out your insurance program.

What you don’t know is that by signing, you are actually firing your existing broker and giving the new one control of your insurance business!

As most insurance companies will abide by these letters, don’t be afraid to question what someone asks you to sign.

Choosing the right insurer

A good insurance broker is crucial to your business.

But in a specialized industry such as trucking, it is key to choose an insurer that understands your business and will continue to be there for you and your industry over time.

There are roughly 230 insurance companies in Canada, very few of which understand or are willing to write long haul trucking insurance.

Of those that do, some, like Markel, are equipped to work with most any broker, even if the broker knows little about trucking; others may work with only a limited number of brokers for trucking insurance.

In certain circumstances, this can reduce the number of options available to you.

So it’s important to do your research and know which insurance company you’d like to be insured by.

Then you can find a broker who deals with them and get yourself a quote.

Other helpful resources include The Insurance Brokers Association of Canada (IBAC) (www.ibac.ca) which provides excellent tips on what a broker can do for you.

If you have concerns or issues with regard to a broker, your provincial broker association (for example, in Ontario the Registered Insurance Brokers of Ontario (RIBO) www.ribo.ca) is there to guide you.

For questions regarding insurance companies, your provincial Superintendent of Insurance can also help out.

Ask questions

In the end, never be afraid to ask questions.

Get to know your broker and your insurance company, as well as all the services and information they can – and should – provide to you.

After all, knowledge is power and with it you’ll be better able to read the subtleties of the business and get the most for your insurance premium dollar.

Please send your questions, feedback and commentary about this column to letstalk@markel.ca.

For more information about Markel, visit www.markel.ca

– Mark J. Ram is president and CEO of Markel Insurance Company of Canada.

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