Every day we come across surprises that are unexpected and, many times, affect our pocketbook. Some trucking “surprises” are devastating, like a truck wreck, while others are just a pain in the neck. In both cases, we often rely on others for guidance and knowledge – people like our broker, salesman, mechanic, banker, and probably the most important link in your resource chain, your insurance agent.
Knowledge of the product or service that you are considering (or already have) is paramount prior to any catastrophic event and/or loss that may manifest itself into something larger. Having a head-strong, know-it-all attitude will usually get you into trouble. Also, if you just ignore the problem until it manifests itself into a larger issue, it may cost you dearly, or possibly jeopardize your financial existence.
For many people, who refuse to consider the total picture when buying insurance, everything is reduced to cost. For most of you, the basics will cover you adequately – Liability, Physical Damage and Cargo. Your insurance policy is a contract between you and the insurance company that provides coverage for certain events. These events are outlined, in detail, in the policy. All policies have exclusions and conditions – these are the nuts and bolts of your insurance policy. In one hand, the insurance company says they are going to cover you, but in the other, the “exclusions and conditions” often modify the limit or remove coverage altogether.
The worst time in any insured’s life is right after an incident or accident – that time when they wonder, “What if?” Well, at that point, it is too late to “wonder” what your policy covers and doesn’t. That is why it is imperative that you understand your coverage BEFORE you have an incident or are involved in an accident of some kind. Once an incident occurs, you are stuck with whatever coverage you had.
The trucking industry has wide ramifications in the legality of its operations and services. Some of the most important and stringent conditions come from your authority and the Insurance Certificates (filings) made to either the DMV or FMCSA or both to support your authority. This one document is the most misunderstood document, by the insured, that is part of your insurance policy.
These insurance filings can also create problems when canceling a policy or removing equipment, too. Cancellations require a 30-day written termination notice by the insurance company. It also affects the legality of anyone that you have hired or that you may have running under your authority or bill of laden.
The document is simple – it states that anything that operates under your authority is insured. What this means is that any vehicle, whether on the policy or not, is insured. This puts the insurance company in a quandary (basically, everything you own, on the road or not, is covered). If you have had a problem removing a vehicle that you did not sell or recently take out of your name, this is the reason. The insurance company wants everything that you own to be on the policy.
I know I have said this before, but please take the time to review and understand the complexities of your insurance policy. It is too late to make any changes when you get a call that the trailer you lent out to one of your friends is upside-down in some remote part of Nevada. Is your trailer and/or cargo covered while unattached from the tractor? Does coverage exist if the tractor-trailer is unattended? What are your responsibilities, outlined by the insurance company, in regards to maintaining and servicing the refrigeration unit on your trailer? Each company has its own set of conditions. What if you have a loss by someone that is running under your bill of laden or authority? These are all questions that you should know the answers to.
How many of you out there have drivers that you do not cover with Worker’s Compensation? Worker’s Comp is very expensive, but a financial loss in the event of a claim can be devastating. This is one area that you do not want to fool around with. In the event of an uncovered loss, you have the possibility of losing everything.
Not all insurance is created equal – the proof is in the details. The sooner you realize (and accept) the fact that there is more to consider than just cost when purchasing insurance for your business, the better off your business will be. Please do not wait until it’s too late! If you have any questions, I can be contacted through California Plus Insurance Service in Modesto, California at (800) 699-7101.