Facility Association updates truck insurance rules

by Today's Trucking

TORONTO, Ont. – Facility Association – established as an insurer of last resort — has revamped its rating and commercial underwriting rules, making it harder for trucking companies to misrepresent business activities.

Carriers looking to secure the insurance will now need to provide additional information including fuel tax reports, National Safety Code (NSC) profile data, and Safety Measurement System (SMS) reports from the U.S. Federal Motor Carrier Safety Administration, the Canadian Trucking Alliance (CTA) reports.

(Photo: istock)

Facility Association has a presence in nine provincial jurisdictions, with the exception of B.C., Manitoba and Saskatchewan. The changed rules are effective as of Oct. 1 in most jurisdictions, but will be applied in New Brunswick and P.E.I. on Jan. 1.

“We are now able to move forward with a system that treats everyone the same with respect to their risk and the premiums required to cover that risk,” said Ontario Trucking Association president Stephen Laskowski, in a related press release.

Facility Association had identified a significant increase in trucking business in late 2018 and 2019, triggering calls for a review by the Ontario Trucking Association (OTA) and member insurance companies. The related commercial insurance premiums rose 47% in the 12 months leading up to March 2019, and premiums linked to interurban vehicles were up 200%.

But traditional automobile insurers back Facility Association as a place where truck owners and drivers can turn if they can’t find coverage from an individual insurer.

There were suspicions that some trucking companies and insurance brokers were misrepresenting their operations in a bid to secure insurance coverage with lower premiums than could be found in the traditional marketplace.

For example, a fleet that does most of its business in Ontario might have told Facility Association that it’s based in New Brunswick, where the exposure to lower traffic volumes might lead to a lower risk for some types of collisions.

A Facility Association working group that emerged from the early discussions included representatives of Intact Insurance, Northbridge Insurance, Economical Mutual Insurance, Cooperators General Insurance, Dalton Timmis Insurance Brokers, and the OTA. They helped to guide the related changes.

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