Although the cost of motorcoach insurance has slipped in the rankings of most vexing challenges facing bus companies in 2006, it is a topic that should always be high on the agenda. And while fuel costs and driver retention might be today’s most pressing concerns, the cyclical nature of insurance pricing will likely move it back to or near the top of the list sometime down the road.
With that said, as a motorcoach operator, it’s always a prudent strategy to take some easy proactive steps that will afford you the ability to exert much more control of your liability and physical damage insurance costs.
While the steps recommended here are not new or revolutionary, the emphasis placed on them is significantly different than you might expect because the suggestions are not the usual “textbook” approach, but rather the unvarnished consensus of the underwriting team from motorcoach insurance specialist Lancer Insurance Company.
Blow your own horn
Interestingly, whenever motorcoach company owners have an opportunity to verbally describe their operations, the points they make are striking. Specifically, they often go to great lengths detailing how their company is markedly different (and better) than their competitors for a variety of reasons. Whether it is their unique marketing niche, the stellar records of their drivers, the special features of their equipment or the receipt of industry or community awards, most operators are justifiably proud to let everyone within earshot know how special and different their operation is from others.
Unfortunately, when it comes to applying for an insurance quote, very little of that positive message reaches the people who need to know it most — the underwriters. Don’t allow that to happen. Look upon your insurance application process as a marketing opportunity to sell the unique and compelling attributes of your company to your agent and, through him or her, to your insurer’s underwriters. Underwriters crave information, so don’t be shy to send along marketing brochures, customer testimonials, flattering local media stories about your company or your Website address to allow your underwriter to sharpen his or her pencil and acknowledge your uniqueness with an appropriate (i.e., lower) premium quote.
Train, assign drivers properly
At the end of the day, your drivers will go a long way toward determining your bus insurance premiums. How you recruit them, train and retrain them, acknowledge exemplary performance, deal with driver problems and empower them to make on-the-road operational judgments are all key considerations to a professional motorcoach underwriter and, as such, should be emphasized in your insurance application process.
No two bus companies handle their driver management issues the same, so if you have a strong, positive story to tell about your approach, by all means do so. For example, most bus companies have some type of formalized driver training programs for new recruits, but far fewer have courses for their veteran drivers and compulsory post-accident retraining programs for all drivers. If you do, let your agent and underwriter know about it.
Industry studies repeatedly show that the majority of commercial drivers respond very well to a formal training program, and bus insurance specialty companies like Lancer stand ready, willing and able to provide the necessary “tools” in the form of curriculum, instructional material and hands-on assistance you’ll need to meet the critical driver training challenge.
The black box edge
In the past, underwriters paid requisite attention to the make, model, age, condition and formal maintenance programs of your coaches, but, with the advent of electronic onboard recorders (EOBs) and other black box technologies, the focus on equipment issues has grown geometrically. Simply put, black box technologies are claims-fighting and, consequently, premium-reducing tools. Many committed bus insured specialty companies are recognizing them as such by offering both installation and premium discounts to coach companies that make the investment.
Further, onboard video observation equipment, like the system offered by DriveCam, not only gathers excellent empirical data to help better monitor your equipment and manage your drivers, it also leads to fewer claims, cleaner loss runs and, most importantly, lower premiums.
Risk sharing lowers premiums
There’s a very simple way for you to dramatically lower your annual bus insurance premiums — and it’s totally within your control. The secret? Take advantage of deductibles. It’s easy. Carefully analyze your loss runs as far back as you can, and determine where to separate the predictable claims by type and cost from the clearly unpredictable (i.e., severe) ones. By doing so, you can shave thousands of dollars from your insurance costs.
Legitimate bus insurance specialists are very receptive to lowering premiums when an applicant company is willing to demonstrate confidence in its operation by assuming a prudent deductible on both liability and collision coverages. Don’t waste time and money by purchasing “first dollar” insurance and trading dollars with your insurance company. Analyze your experience, pinpoint a comfortable retention level supported by your own loss data and get a deductible level that protects you primarily against the catastrophic type of risks that you can’t handle on your own.
Participate in the claims process
The first person an underwriter calls when renewing your account is his or her counterpart in the company’s claims department. And for good reason. Your claims examiner has an insight into your operation that’s a lot stronger than anything an underwriter can glean from a renewal application and a loss run. If you have a history of reporting all your claims promptly and providing your claims examiner with critical accident scene photos, witness contact information and other relevant data, it will bode well for the pricing of your renewal quote.
Unbeknownst to many bus company owners, perhaps the strongest ally you can have in keeping a lid on your insurance costs is your motorcoach insurer’s claims specialist. Keep yourself in the loop throughout the claims management process; your active participation could pay a significant dividend in the form of lower premiums.
The usual suspects
Other tactics to help keep your insurance costs under your control are pretty common knowledge, but should be cited just the same. If possible, work with agents, brokers and insurers whose focus and expertise are clearly on the passenger transportation industry. Yours is a unique business with many subtleties that are understood only by insurance professionals totally committed to it. The high mandatory liability limits, regulatory requirements and public scrutiny faced by coach companies make it imperative to work with insurance agents, brokers and underwriters who understand the game.
Controlling your insurance costs is indeed possible if you take the time and effort to communicate why your company is deserving of special consideration. Make sure that your important and unique message is clearly communicated throughout the application process.
Randy O’Neill is senior vice president, Lancer Insurance Co. in Long Beach, N.Y.