Rescue Your Revenue
Looking Back at 2022 - Insurance Claim Trends for Owner Operators Re: Property Damage and Downtime
Each year our office reviews the previous year’s trends on property damage and downtime claims. It is interesting to note that the average dollar loss our clients suffered grew steadily over the last two years. Why is that?
The answer is actually pretty obvious to anyone who’s in trucking and experienced an accident recently. Parts prices have increased and many parts remain difficult to locate, especially those containing microchips. Shops continue to be backed up with a shortage of workers and higher labor cost. Inflation, lack of parts, competition for microchips, and lack of workers all play a part in creating longer delays in repairs and extended downtime losses for the truck owner.
A semi with significant damage is most likely not legally drivable. That truck is down and losing income until parts are sourced, received, and installed. Owner operators with damaged equipment are often left with no choice but to wait for completed repairs.
In order to speed claims along, many truckers will take matters in their own hands and source the parts themselves. Sometimes aftermarket parts are acceptable, but sometimes only OEM parts will do. Interestingly, shops sometimes have the toughest time finding parts for new equipment. With new trucks still in short supply, perhaps the reason aftermarket parts can’t be located is because all parts that can be made are directed to the trucking manufacturers who are making new trucks.
Insurance Coverage Lower than Value
Another insurance trend contributing to higher losses for owner operators are those trucks which aren’t insured for what they’re worth currently. With the skyrocketing prices of both new and older equipment, it’s important to be insured to the proper value.
For example, our client Greg’s truck was totaled by an uninsured motorist, so he was left with filing a claim on his own insurance policy. Greg’s truck is worth $70,000 in today’s market, but when Greg first got insurance on the truck five years ago, it was worth $40,000. This was the amount of physical damage coverage he requested at the time. Unfortunately, he hadn’t upped the insurance coverage in all these years. The most his own insurance company would pay him was the $40,000 on the policy.
Moral of the story: Review your physical damage coverage regularly with your insurance agent and increase the coverage as necessary. Also, be sure to consider adding UMPD/UIMPD (Uninsured/Underinsured Motorist Property Damage) coverage for your truck and UMBI/UIMBI (Uninsured/Underinsured Motorist Bodily Injury) coverage for your person. It may be the insurance that saves you and your business’ finances if hit by a driver with little or no insurance.
It will be interesting to see how the trends move in 2023 and hope for some relief from those suffering in the transportation industry. We all wish the best for you and your family in this new year. Stay safe out there!
The information provided on this site is general in nature and is not legal advice.
For more information, visit DowntimeClaims.com