Let’s Talk Insurance: It Pays to Talk to Your Insurance Company

by Mark J. Ram

Talk to your insurer lately? It’s actually a very good idea. While your insurance broker is an invaluable service provider and should be your main point of contact on your insurance policy, speaking regularly with your insurance underwriter is also highly recommended for anyone looking to maintain a stable insurance price.

After all, on what other purchase do you spend so much money and never even meet the people you’re paying?

When it gets down to it, talking with your underwriter regularly will allow you to build a stronger relationship.

As an example, through regular contact, you’ll be better able to educate your insurer about the positive safety and training initiatives your company is taking, while also learning more about, and being able to better predict, what’s going on with insurance pricing. Most importantly though, you’ll be able to dispel any misunderstandings that could raise concerns with your underwriter, which could have negative effects on your insurance rate.

Red flags for underwriters

Here are a few tips about specific areas to watch for that could set off misunderstandings and warning bells in an insurance underwriter’s head when they’re working on your insurance rate.

Be sure they have the whole story early on if any of the following applies to your organization:

Rapid expansion. It is certainly exciting to grow your fleet and expand your routes, but it may also be something that could spook an insurance underwriter. You need to make sure they understand clearly that you have the expertise and experience to handle the rapid growth safely.

High driver turnover. Although the scarcity of good drivers these days means some turnover is inevitable, a high turnover ratio can be a cause for concern. If you are replacing more than 50 per cent of your drivers annually, your insurer may no longer feel confident that they know who is behind the wheel of your trucks, and whether they are properly trained to do the job, which in an underwriter’s eyes can mean more potential for multi-million dollar losses. A simple discussion may clear up any misunderstandings.

Late accident reporting. A recent study of 53,000 claims shows that, as an example, submitting claims four weeks late to your insurer (especially those where a third party is involved) can increase the cost of your claim by 45 per cent. Late reporting of claims (anything more than an hour or two past the time of the incident is late) can add thousands – sometimes millions – of dollars to the cost. And I don’t need to tell you what adding millions of dollars onto your losses will do to your insurance rate. Make your insurance company your first call in the event of any accident so they can get to the scene while the evidence is fresh, witnesses are still present and before the high-priced lawyers, with their 40 per cent fees, get involved.

New high risk routes. Inform your insurer if you are planning to drive into the United States for the first time, or take on new routes into states through which your drivers have never traveled. Your underwriter will need to know you understand the legalities and have the expertise to venture safely into new jurisdictions.

Hauling hazardous commodities. Your insurance company will want to be sure that your drivers and safety managers have specific experience with the hazardous commodities you’re hauling. Although many items are today referred to as hazardous, some may pose a real problem to your insurer.

Regulatory compliance (CVOR/National Safety Codes and SAFER). Your underwriter will look closely at these, especially if you are driving U.S. routes – and for good reason. If you get into an accident in the U.S. and have a pattern of poor safety violations, you could add millions of dollars onto the cost of a loss. U.S. lawyers will likely subpoena everything in and about your company to try to demonstrate to a jury that your company was “an accident waiting to happen.”

Rising accident frequency. There may be valid reasons why you’re having more accidents, so be sure to talk with your insurer regularly and help them understand the situation.

No safety buy-in from management. At the end of the day you can have comprehensive safety practices and great manuals, but if your management just views them as paperwork and doesn’t take them seriously, your insurer may not take your safety practices seriously either.

Remember, your insurance company is putting millions of dollars of their capital on the line when they provide you with a policy.

They’re human too, and familiarity breeds trust. So make sure they know you, and you know them. At the end of the day, these tips are completely in your control. All they can do is help.

– Mark J. Ram is president and CEO of Markel Insurance Company of Canada. Please send your questions, feedback and commentary about this column to letstalk@markel.ca. For more information about Markel visit www.markel.ca.

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