When managing your fleet insurance program, you need to consider three main points: safety, maintenance and the insurance program itself.
Scott Nuelle, vice president of ECBM Insurance Brokers and Consultants, says that losses determine your premium, but those three key factors influence what losses actually occur and whether they are mitigated. From there, fleet managers must remain vigilant.
“Once a loss occurs, you need to stay very involved and make sure that you don’t just assume that the insurance company will handle it the way it should be handled, because ultimately, those losses will determine what your insurance premiums are going to be,” Nuelle says.
Smart Business spoke with Nuelle about how to effectively manage your fleet insurance program.
How can you improve safety in your fleet to ensure the best fleet rates?
Any fleet insurance program is going to start with driver selection and having appropriate standards for the drivers you hire. Within that, you want to make sure that all the drivers meet your standards. A few years ago, there was a shortage of drivers, so people would bend their standards.
With this economy, now is the time when you should be culling your driver list to make sure that you are keeping the very best of the best. The first thing any underwriter will look at is the driving records of the people you’re putting on the road.
Next, provide adequate training programs for drivers once they come on board, both in the classroom and over-the-road training.
You’ll also want to make sure the drivers are familiar with their routes and with the customers’ operations so they know where they’re going, what they are supposed to do and what they’re not supposed to do.
How can you improve safety once your drivers are on the road?
You need to be able to measure what’s going on. You need to be aware of when your drivers have violations, accidents or incidents. There is a lot of technology out there that can help you do that, such as on-board recorders, that can give you details like hard braking, speeding, collision systems and lane-change systems that alert you if you’re too close to someone.
Some vehicles have geo-fences that will alert you if the driver has gone off-route. One of the key ways accidents happen is when a road is closed and drivers get off their route. Instead of being on a six-lane highway, they’re driving on a two-lane road that they’re not familiar with, in the rain. The system alerts the dispatcher that your driver has left the route, then you can contact the driver to see what’s going on.
What can be done to improve maintenance?
You’ve got to make sure that your vehicles are well-maintained and that you are keeping adequate records to document that maintenance. Drivers should be trained to do pre- and post-trip inspections. In fact, they should have a checklist that they need to complete before and after every trip to prove that they have done those inspections.
At a minimum, you should be doing the regularly scheduled preventive maintenance, whether you’re using your own mechanics or outside mechanics, and all of that should be documented. That way, you can prove what you have and haven’t done if there ever was an issue with that vehicle or an accident.
More and more people have gone to technology that will alert them when the vehicle is due for maintenance, and the dispatcher will be notified not to dispatch that vehicle until that maintenance has been completed.
How do you determine what type of coverage you need?
Depending on what is in the truck, you are going to need different coverages. If you’re hauling something that is hazardous or could be deemed hazardous, you need to make sure you have the proper endorsements to cover you if there was ever a spill.
As far as your insurance program, you need to be sure your insurance broker has a complete understanding of all these issues as they relate to your fleet and that it is coherently relaying them to your underwriter, because that is going to affect your premium.
It’s ultimately tied to whatever you’re transporting, your radius of operations, whether you are operating in an urban or rural area, whether you are a short haul or long haul.
All of those things go into the insurance rate. More times than not, people do not spend enough time analyzing that.
Too often, people include owners’, executives’ or salespeople’s personal cars in their truck policy. This can cause huge gaps for those people. You always want to make sure that you write a separate policy for private passenger cars.
If a claim is filed against a company, how can it ensure the best outcome?
Often, if an insurance company can settle a claim against you for $50,000 that it is afraid would cost $250,000 if it went to trial, it may agree to settlement instead of trying it. You might have a $50,000 loss when you really had no liability.
It is critical to have an advocate who can represent your interests. Managing the claim strategies and auditing the claims process are as important as preventing the claim in the first place. Having someone who is an expert handling transportation losses can mean a 20 to 30 percent difference in your insurance costs.
