Cover Available For Trucks,Taxis, Limos

With insurers seeking double-digit rateincreases from their best commercial trucking and automobileclients, commercial lines agents say that those at the other end ofthe spectrum–who are seeking insurance with poor loss recordsarejust happy to find coverage at any price.

Agents and brokers who deal in commercial trucking and liverycoverage say many clients have seen increases that range from 10 to20 percent for good risk clients. Still, even though quotes areharder 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 getout, when the market hardens,” observed Joel Cavaness, president ofRisk Placement Services, Inc., a subsidiary of Arthur J. Gallagher& Co. headquartered in Itasca, Ill.

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

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

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

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

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

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

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

Other local transportation companies, especially movingcompanies, are beginning to see some limitations on availability inthe state, she said.

One area crying for underwriters is insurance for non-emergencymedical transport vehicles, covering vans that transport mainlyelderly patients between nursing homes, hospitals, or othernon-emergency locations. It is a growing industry with fewunderwriters, Ms. Duerr said.

Part of the problem is that there is little experience foractuaries to base a companys pricing on, she said. It is a growingbusiness in the state that will be in need of more carriers in thecoming years, Ms. Duerr said.

Along these same lines, Mr. Hurry noted that he is seeingincreases on the West Coast for wheelchair vans of between 50 to100 percent.

When it comes to livery lines, producers say they are seeingsome increases, and like other lines, the rate of increase is, inpart, being determined by loss history. Fleets or individual ownersthat 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, taxisare handled by a limited number of specialized carriers, agentssay.

In New York, the full breadth of increases for renewals will notbe seen until March 1, 2002, when all livery vehicles must renewtheir policies, said Alan Plafker, president and chief executiveofficer of Member Brokerage Service, LLC, in Long Island City,N.Y.

Placing livery risks in New York City is a primary business ofthe 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 tokeep settlements low by working on claims quickly, noted NatGoldbetter, a medallion broker for Member Brokerage Service.

Mr. Plafker said there was no more than a 10 percent increase ontaxi risks from the last renewal period, while other liveryclasses, especially black cars with poor loss histories, sawincreases as much as 50 percent.

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

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

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

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

A taxi owner in Phoenix pays between $4,500 to $9,000 in premiumper taxi, he said, noting that larger fleets are turning toself-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 carsdesignated as black cars. However, insurers insist that insuredshave relatively new cars, not older than three or four years, hesaid.

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

Mr. Hurry said he expects rate increases on taxi coverage toslow 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 serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.

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