Risky Business

Insurance rate increases predicted for 2013

Hi Everyone, I hope the holiday season brought you all a sense of peace and calm.

How I wish I had good news from the insurance world for 2013!

The last three years have not been good from a loss standpoint in the trucking insurance industry.  With only a handful of insurance companies left who still insure trucks, much less sprinters or cargo vans, most had more losses than premium.

I know, I know...you, yourself simply paid your premium and went on your merry way, with no losses whatsoever.  Unfortunately, so many OTHER people incurred losses and claims, that it affects the whole pool of truckers that includes Expediters.

In the past, losses that were higher than premium taken in could sometimes be countered by really good investments.  Insurance companies would invest their "reserves" at a good interest rate, and make enough money off of that to mitigate how high they'd need to increase premiums on their clients.   Their goal is to make a profit, one way or another. (4% is considered a good profit, FYI.)

I know you all know that interest rates are at an all time low.  While this is really, really good for our country's out of sight debt that we all pay interest on, it's very bad for a person or company trying to invest money to try to make a profit off the interest. 

My professional CIC relationships include contacts within numerous insurance carriers with statistics as long as my arm to back up their numbers substantiating the losses for truck insurance companies.

While I hate to be the bearer of bad news, I thought it important to suggest everyone tuck a little bit aside this year to prepare for any potential increases in their insurance budget.

In the meantime, to mitigate some of these pending increases to your own policy, remember to review the Actual Cash Value/Stated Amount on your unit to make sure you're not over-insuring the value.

Then review your deductibles, especially Comp, to increase that deductible to see how much that lowers your premium.

Finally, I know many folks don't like to hear it, but the number one driver for ALL of your insurance, not just Expediting, is your own financial responsibility.  Make sure you're getting your fiscal house in order for the best insurance rates. 

This reduces your chance of a premium increase more than anything.

I sincerely hope to have something more positive to blog about next time!

Warm Regards,

Shelly Benisch, CIC                                [email protected]
Commercial Insurance Solutions (CIS)        www.MyCISagent.com