Photo courtesy MCI
How much money an operator can save depends on how they manage risk and improve their hiring and training practices. The first step is finding a carrier they can forge a partnership with to establish a safety culture at their operation. 1. Shop Around
Typically, before a customer books their trip or event with you they have already shopped several other operations, often basing their decision on who offers the lowest price. One common complaint by many operators, however, is that a customer should shop not only on price but on several other factors, including safety record and quality of equipment. So, when you’re looking for an insurance carrier, why would you settle on merely who can offer the lowest price?
“Insurance is a very strange product that you need. You have to have it and pray you don’t need it, but when you do, you better have an insurance company that knows how to handle a claim,” says Shriver Insurance’s Charlie Shriver, a 43-year veteran in the industry. “There are some fly-by-nighters out there, no doubt about it. You need to be sure to find a company that dots its I’s and crosses its T’s.”
An important factor to look for when shopping is the company’s history and their presence in the industry. Do they know the motorcoach market? If not, look for somebody who knows the motorcoach market and what your operation’s specific needs may be.
You may also want to talk to a host of insurance companies to find the best fit for you, rather than settling quickly. An important factor is finding a company you can work with as a partner, rather than view as an adversary, according to National Interstate Assistant VP/National Marketing Manager Michelle Silvestro.
“You may not think about it, but insurance is probably one of your operation’s top three expenses, so spend more time weighing options than you do planning your vacation,” she says. “I know insurance is a necessary evil, but there is lots of savings to be had if an operator pays more attention and is diligent.”
It is also a good idea to take plenty of time to shop insurance carriers. It is a necessary expense and you know it has to be renewed each year, so why put it off until the last minute?
“I like to refer to it as the tyranny of the urgent: we don’t always prioritize what’s most important, we only get done what has to be done soonest,” says Shriver. “The problem with that mentality is that all of a sudden one of the most important things, in this case insurance, becomes something you have to try and take care of in a day or two, but can’t.”
Finally, while operators appreciate the loyalty of their customers, loyalty to an insurance provider that isn’t working with you can cost money. If you are not happy with your insurance partner, it’s OK to look for a better fit, explains Shriver.
“If you are doing everything right and still not getting a price you feel is just, then maybe it is time you start to look around,” he says.
2. Tell Your Story
Insurance companies predict the future based on the past, so every year when preparing to quote an operator an insurance price, they will examine your operation’s incidents over the last five years as well as the type of work you do — where you go and what kind of services you provide, e.g. charter, tour, intercity.
“It is a pretty extensive process,” says Silvestro. “Obviously, the stakes are pretty high. Every time a coach leaves a yard, there is a potential for a $5 million claim, or more, if the insurance company writes a policy with higher limits.”
During the underwriting process, insurance companies will also ask their clients, or potential clients, to provide information on their fleets, safety programs and the guidelines they follow, as well as a driver list.
“Underwriters crave information, so you have to really separate yourself [during the process] from the pack and emphasize all of the positive things you are doing that should earn your operation a better price,” says Lancer Sr. VP Randy O’Neill. “If you can document your safety history as well as the safety programs you have in place when you are submitting an application, you have to sort of pound your own chest a bit and distinguish yourself from everyone else who is out there.”
In short, point out the things you are doing in terms of safety that are positively impacting the number of incidents your operation is having. It will be discussed later in “Manage Your Risk,” but are you instituting new training programs, more stringently vetting the drivers you hire, or eliminating dangerous routes or driving during times where the number of incidents are known to increase? Tell your insurance carrier, and more importantly, document how those safety programs or programmatic changes are having an impact.