[IMAGE]MET11risk-.jpg[/IMAGE]Motorcoach carriers looking to purchase or change insurance policies contend with several factors, and the process can seem complicated and costly. METRO Magazine spoke with industry experts to get some tips on what to consider and how to ensure you get the best coverage for your company.
First off, look into the several insurance companies that specialize in offering passenger transportation insurance, including Lancer Insurance, Shriver Insurance Agency, Transportation Insurance Brokers, and National Interstate Insurance Co., just to name a few. Because these companies offer products tailored to transportation, including driver safety training, it is a plus to seek them out when conducting your search.
Francis Walsh, vice president/senior underwriter, Lancer Insurance, says that the importance of "having an experienced insurance company familiar with handling passenger transportation claims cannot be overstated. Your customers are your livelihood, so how they are treated in the event of a claim is as important as anything your insurance company will do for you." He also points out that the more risk an operator can afford to take through liability and physical damage deductibles, the more premium savings they will see.
Relationship, safety culture key
Other factors to keep in mind when researching insurance benefits and costs are the needs and assets of your operation and how these will affect your policy.
The International Motorcoach Group (IMG) is comprised of more than 57 motorcoach tour and charter operators in North America. Its members vary in size and insurance needs. Steve Klika, president, says that coach operators need to understand that establishing a relationship with your insurance carrier is vital. "If I were to give some advice...when buying insurance, look at [it] not only on a short-term basis, but on a long-term basis. Take a look at the relationship [you're] going into." He contrasts the experience with buying home or auto insurance. "Don't look at it for just year-to-year, because the insurance company is going to want to know your experience, so in case you do have a bad year, they're not just going to bail out on you. And at the same time, in some cases by having a long-term relationship, it's going to have a [positive] impact on your premiums year-to-year," he explains.
Operators need to take the time to understand what the insurance carrier's looking for as they develop premiums and what they base the carrier's premiums and coverage on, including type of experience and operation, Klika adds. Less experience will translate to higher insurance costs and a potentially higher premium. Conversely, an established organization with a good safety record and training programs in place will be more competitive.
"They're going to take a look at your drivers' records, and they're going to want to see how you're operating, how you're preventing accidents," says Klika.
Klika and Walsh agree that safety features, including DriveCam and electronic data recorders help mitigate costs. Klika points out that anything helping to prevent accidents will be to a carrier's advantage, whether it's technology-based, or driver training programs; the ongoing safety culture of the company is closely examined. Electronic Data Recorders (EDRs ) are favored by underwriters, because they help keep loss costs down, which in turn, [has] an effect on premiums, adds Walsh.
Many insurance companies, like Long Beach, N.Y.-based Lancer Insurance, offer safety training to motorcoach operators. Lancer introduced their first free and exclusive driver training video tapes in 1989. "Twenty years later, we have more than 20 different driver and management training video tapes streaming on our website and available exclusively to our policyholders, 24/7. DVD and VHS versions are available as well," Walsh says. Motorcoach customers receive weekly, monthly, and quarterly newsletters and e-newsletters addressing a variety of safety, loss prevention and risk management topics. "Driver safety awards, pins, company safety achievement plaques and customer loyalty awards are additional products available through our total service programs," he adds.
Importance of ratings
The Elmhurst, Ill.-based Shriver Insurance Agency handles more than 500 accounts, with motorcoach operators making up approximately 300. The company has insured motorcoaches for the past 40 years that they have been in business.
Vicki Carver, customer service representative, advises new operators to first call around for an idea of pricing before they buy. "Sometimes, they're sticker-shocked, and they'll buy and think they won't have to pay much. Then they find out how much the insurance is." Most insurance companies require a minimum of $5 million in coverage.
Carver also encourages operators to make sure they select an A-rated company. She recommends using A.M. Best, a full-service credit rating organization, providing ratings and analysis that help assess the creditworthiness and financial strength of risk-bearing entities and investment vehicles. (To visit the site, go to www.ambest.com) This global organization constantly monitors and updates ratings on companies, including insurance agencies. They also publish a new book annually, listing ratings. "They have to have [a certain amount of] financial assets, versus the liabilities, to make sure they're able to pay all the claims," Carver explains. The rating drops when the company has less ability to demonstrate this type of financial ability. "You don't want anything under a B."