There has been a lot of information written recently about the state of the Tow Truck Insurance market specific to the limited availability of insurance companies willing to write coverage along with identified carriers who have either taken a hiatus or simply exited from the market. While true, it is important to remember what our parents once told us, “Things are never as good as you might think but at the same time, they are never quite as bad as you might think”. It’s the few little things that make all the difference when it comes to your costs:
1. Driver Selection: Short term gains when hiring marginal drivers has resulted in long term losses from claims that could have been avoided. Hiring a driver just to hire a driver has proven futile from a cost perspective.
2. Claim Control: Institute a post accident review and get your agent involved to determine the most cost effective course of action. Stay on top of your losses once turned in by the assistance of your agent as well as the carrier claims personnel. Have an available “Tool Box” of to do’s in the event your driver is involved in a loss.
3. Maintain Equipment: Daily walk around inspections to ensure equipment is operational and to identify and note maintenance needs.
4. Implementation of a no tolerance policy when it comes to usage of mobile electronic equipment while driving such as mobile phones. NO TEXTING… Rear end accidents are the most common result and drive costs by increased attorney penetration on low impact, soft tissue injuries.
5. GPS/Camera systems: This demonstrates management control and leads to reducing bogus claims.
There is good news. Progressive, one of the largest Commercial Auto carriers, is planning to reenter the marketplace with revamped underwriting rules soon. They have not provided us with an exact date; however, it is forecasted to be sometime in the Q2 2017. That alone should help calm the rocky waters that were caused when they exited temporarily in late 2016. This is not to mention that we anticipate another carrier or two to enter the marketplace which will also provide us some lift and stability.
When it comes to renewal pricing, we are not seeing the cited 100%-150% increases. We predict those scenarios are either exception to the rule driven by the underpriced carriers who have exited the market or involve a situation with a claim frequency (number of claims) or severity (cost) challenge and the once accepting voluntary market will not sustain it thus requiring coverage from a “high risk” carrier. This typically means higher premiums.
Recognize this is the market “right sizing” itself and in due time it will settle back down. A proactive management approach focused on reducing risk and losses are as parmamount today as ever. Please know that things are going to happen. What’s most important is that we work together to ensure that a decision is made that will best protect your business both from a cost and risk viewpoint. We will get through this!