"Insurance companies like to look at a customers's loss runs for the current year and the three prior years," Nease says. "This gives the insurer a good indication of how the towing company has performed during this period. If a tower comes to me with a loss runs report that shows no claims, or very few, he has a good deal of bargaining power. he has proof that he runs a good, solid operation, and in turn I can be more competitive in shopping for his insurance coverage."
To obtain your loss runs report, go to your current agent or your insurance carrier. And a wod to the wid, Nease says: be proactivei nsecuring your loss runs report before the time for renewal of your current policy. If you want to shop for better rates, don't wait until the las tminute to request your loss runs when any delays in receiving them can hamper your ability to get good, solid rate quotes.
Company Information Package
Input you can provide to insurers includes:
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Four years of currently-valued (60-90 days) loss runs
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Years in business/experience
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Number of drivers, their full names, dates of birth, driver's license numbers and years of experience.
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Descriptions of trucks in your fleet.
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Information on truck maintenance programs.
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A description of safety meetings or safety programs for employees.
"The more data you can provide about your operation, the better off you are," Nease says. "An agent has to sell the insurer on why they should underwrite your towing company, and why you should receive a favorable rate."
To sell your company as a desirable customer, include information that reflects positively on your company business record. Been in business for ten years without many claims? Include it in your package. You have eight drivers who have been with your for over six years? Show that too. Sent yoru drivers to certification, safety and defensive driving courses? Include those as well.
Also, when providing informaiton about the trucks in your fleet, be specific.
"If you simply list a truck as a '99 Ford truck, there's a lot more information your insurer may need," Nease says. "What model is it? What's the GVW? Is it a conventional wrecker or a rollback? Is it a steel or aluminum bed? And what's the bed length? The more data I get, the more I understand the full picture."
All Claims Are Not Treated Equal
For the most part, Nease says, insurers know that bad things can happen, and claims will occur. But the types of claims can make big difference on how risky your company appears. "For example," Nease says, "typically an underwriter would rather insure a towing company that has a $20,000 loss from a single accident than a towing company that has five or six claims for minor at-fault accidents at $1,000 each throughout the year."
The reason, he says, is the company with the $20,000 loss suffered a loss from a single incident out of the the blue, a "stuff happens" sort of thing. But when a company has five claims throughout the year, it raises flags of a continuing problem, a pattern.
"Insurers don't like to see frequency," Nease says. "Minor rear ends may not add up to that much at the end of the year, but a frequency of claims equals high risk. When will the million-dollar claim happen?"
FAST FACT: From the author's experience, most tow truck claims result from wrecks in intersections and rear-end collisions.
Safety: Practice What You Preach
From Nease's perspective, safety needs to be everyone's number one priority at a towing company - from the top down.
"Towers can preach safety," Nease says, "but if the owner or manager doesn't really believe in it, it's going to be questionable if the rest of the employees are going to be safety conscious."
If a company owner tells employees that is important - but when jobs are backing up, he chastises them for taking too long by driving safely, hooking up safety chains, etc., it's these actions that speak louder than words.
"An owner or manager must communicate to his drivers; don't take shortcuts, make sure safety chains are hooked up, secure the load, pay attention," Nease says. "Let them know that the company is committed to safety."
This can be don verbally, and through the use of safety meetings and safety programs, Nease says. "Any safety posters, anything will help. The more an employee is aware of safety, the more it is at the forefront of their minds."
Certification
"If an insurance company has an account that is marginal because they have some claims," Nease says, "and the owner sends his drivers to a certification class and tells me about it, I would go to the underwriter an show them the certification papers. I want to show them that the towing company owner is being proactive and investing in his drivers."
If you have invested in certification, Nease says, tell your agents. Again, the tower needs to be proactive and sell himself as to why he's better than the average tower and how he is going the extra mile.
Larry Alexander Insurance has been specializing in towing and recovery insurance for over 30 years. The company serves towing companies in Texas, Oklahoma, Colorado, New Mexico, Arkansas, and Arizona. They are active members of the Towing and Recovery Association of America, the Oklahoma Wrecker Owners Association, and the Texas Towing and Storage Association.
(on the web at www.towagent.com)
Got a question? Give us a call, no obligation at 800.950.7911.
