Cover Available For Trucks,Taxis, Limos

With insurers seeking double-digit rate increases from their best commercial trucking and automobile clients, commercial lines agents say that those at the other end of the spectrum–who are seeking insurance with poor loss recordsare just happy to find coverage at any price.

Agents and brokers who deal in commercial trucking and livery coverage say many clients have seen increases that range from 10 to 20 percent for good risk clients. Still, even though quotes are harder to come by for some insureds, depending on the region, insurance coverage remains available, they say.

Trucking is always the first area “to get hard and hard fast, because carriers who dabble in transportation are the first to get out, when the market hardens,” observed Joel Cavaness, president of Risk Placement Services, Inc., a subsidiary of Arthur J. Gallagher & Co. headquartered in Itasca, Ill.

In the wholesale market for long-haul trucking, Mr. Cavaness said, there is a void in availability as prices rise, noting that some truckers are now being forced to take on higher retentions. He said he is seeing increases as high as 18 percent on some long-haul fleets with very good loss experience.

The market is becoming more selective, Mr. Cavaness said. On a trucking risk that he would have received 10 quotes for 18 months ago, now he may see only two, he said.

Local, short-haul truckers have it a little easier, Mr. Cavaness noted, indicating that premiums are not rising as dramatically.

At Insurance Strategies, Ltd. in Tempe, Ariz., Steve Hurry, vice president, echoed Mr. Cavaness observations on the market. Trucking quotes are getting harder to find, and those that do find renewals are seeing increases of between 10 to 20 percent, he said.

The rates for trucking renewals are also being guided by the reinsurance market, noted Harvey Leff, a wholesale agent at Buckingham-Badler Associates in Staten Island, N.Y.

“Before, customers worried about rates going up. Now they are happy just to secure coverage,” Mr. Leff said.

In Illinois, Danielle Duerr, owner of Danielle Duerr and Associates in Darien, Ill., said dump trucks are seeing dramatic rate increases. Clients are seeing across-the-board increases of 20 percent on good risks, as some carriers leave the market, she said.

Other local transportation companies, especially moving companies, are beginning to see some limitations on availability in the state, she said.

One area crying for underwriters is insurance for non-emergency medical transport vehicles, covering vans that transport mainly elderly patients between nursing homes, hospitals, or other non-emergency locations. It is a growing industry with few underwriters, Ms. Duerr said.

Part of the problem is that there is little experience for actuaries to base a companys pricing on, she said. It is a growing business in the state that will be in need of more carriers in the coming years, Ms. Duerr said.

Along these same lines, Mr. Hurry noted that he is seeing increases on the West Coast for wheelchair vans of between 50 to 100 percent.

When it comes to livery lines, producers say they are seeing some increases, and like other lines, the rate of increase is, in part, being determined by loss history. Fleets or individual owners that have poor loss histories are witnessing substantial increases, while average increases are running between 5 and 10 percent.

While there are a number of carriers that handle the black car (prearranged pick-up) and limousine (hourly rate) segments, taxis are handled by a limited number of specialized carriers, agents say.

In New York, the full breadth of increases for renewals will not be seen until March 1, 2002, when all livery vehicles must renew their policies, said Alan Plafker, president and chief executive officer of Member Brokerage Service, LLC, in Long Island City, N.Y.

Placing livery risks in New York City is a primary business of the firm.

Despite the limited number of carriers handling taxi business, there does not appear to be a capacity problem in the city, Mr. Plafker observed.

Those carriers that have remained in the business have worked to keep settlements low by working on claims quickly, noted Nat Goldbetter, a medallion broker for Member Brokerage Service.

Mr. Plafker said there was no more than a 10 percent increase on taxi risks from the last renewal period, while other livery classes, especially black cars with poor loss histories, saw increases as much as 50 percent.

In Illinois, livery classes have been very soft for a number of years, and are now seeing some slight increases, Ms. Duerr said. The major change she has seen in the business in the past few years is in an increase in the number of new accounts for Eastern European immigrants who are starting up their own livery businesses.

They are not knowledgeable about the insurance system, she said, noting that before they take out policies, he spends a lot of time educating the new entrepreneurs on the purpose of insurance and the importance of keeping records. She emphasizes the need to check on the driver backgrounds before hiring, suggesting that drivers have at least two years experience and a good driving record–all in an effort to keep a good loss record.

“They need to be educated,” Ms. Duerr said. “You can turn an account with losses [into] a good account with education,” she said.

On the West Coast, the story is a little different, Mr. Hurry said.

A taxi owner in Phoenix pays between $4,500 to $9,000 in premium per taxi, he said, noting that larger fleets are turning to self-insurance. Many owners are taking high deductibles–between $5,000 to $25,000 per claim, he said.

To avoid high premiums, some fleet owners try to have their cars designated as black cars. However, insurers insist that insureds have relatively new cars, not older than three or four years, he said.

The situation with respect to insurance for limousines is not as bad, he said.

Mr. Hurry said he expects rate increases on taxi coverage to slow down next year.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, September 3, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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