by Rick Uldricks, contributing editor
While the thought of voluntarily reviewing your insurance policies ranks up there with trips to the dentist in most people’s hierarchy of pain and pleasure, doing so could save you and your business a lot of money. While it may be tempting to get a quote online or simply assume your policy is fine, there are many reasons why it’s important to maintain an open line of communication with your insurance agent.
Many policyholders may go years without having their policies reviewed, while changes in their business, employees, and vehicles could yield significant savings. Whether you are a small business with only one truck or a large business with a fleet of 50+ trucks, regular communication with your insurance agent can save you money.
Vehicle insurance may not immediately come to mind as one of the things you can control, but proactive thinking and, most importantly, communication and regular check-ups with your insurance agent can help you take control of a seemingly uncontrollable situation.
Find an Agent in Your Network
Brian Silva of Progressive Insurance in Mayfield Village, OH, recommends finding an agency that is familiar with the HVAC industry. He says an HVAC contractor’s needs are different from those of a roofing contractor or a restauranteur. Progressive Insurance wrote just over one billion dollars in commercial vehicle insurance last year.
He also suggests talking to peers and people you know in the industry to see if there’s an agency they would recommend. An agency that understands the HVAC business can help your business through different phases also.
“Some carriers specialize in smaller companies as Progressive does, while other carriers specialize in larger firms and have a set of processes and coverages that may be more appropriate,” Silva adds.
Finding a financially stable carrier is also important. There are several rating agencies available that will tell you how financially secure the carrier is that you’re considering. AM Best and Standard & Poor’s are two of these agencies. Your insurance agent should be able to provide you with this information also.
After finding a good agent, the next step is to manage your hiring practices.
Hire Good Drivers
Nothing drives loss cost up as much as poor drivers. If you’re ready to offer someone a job, your agent can run a motor vehicle report to determine if that person has been a safe and effective driver. Greg Botson, owner of Botson Insurance Group, an agency that specializes in commercial vehicle insurance, describes the difference between commercial and personal insurance.
“With commercial insurance, either you’re acceptable or you’re not,” he says. “They’ll charge you a rate that assumes everyone is acceptable and normally that means two minor traffic violations or less. Having an employee with either one major violation or three or more minor ones won’t change your rate, but that person won’t be eligible to drive the
As long as everyone is acceptable, you’ll be charged the same rate whether you have one driver or 100 drivers, so it’s in the business owner’s best interest to hire good drivers.
Safety & Certification
Progressive Insurance and the companies that Botson Insurance Group represent don’t offer discounts for driver certification programs. However, both Silva and Botson agree that safety programs are an excellent idea. Safe driving prevents accidents and having an accident not only will raise your insurance rate, it can also take one of your vehicles or one of your employees out of service for a period of time.
The cost of keeping a vehicle on the road these days has been going up. Not only do the vehicles themselves cost more, but the price of fuel and insurance has gone up also. Your insurance agent can help you control costs on the insurance end a variety of different ways.
“When we do reviews, we look to increase deductibles, review the coverages, equipment schedules, what vehicles are on the policy and what vehicles have been sold and don’t need to be on the policy,” said Botson. “Really, doing a coverage-by-coverage review is very important these days. We’ve found that a lot of customers delete vehicles mid-year and never call their agents, so they’re paying their premium for the whole year when they could be getting some discounts. The location of your garage or vehicle storage facility should definitely be reviewed once a year at the renewal. The further away from the big city, the less expensive it is.”
Insurance companies set a price that covers accidents that might happen in the future. In an attempt to see into the future, they gather information on how claims relate to different variables. If any of the variables change, your rate could be affected. According to Silva, the most important variables related to accidents are:
- How long are you on the road?
- Who’s driving the vehicle?
- Where is the vehicle being driven?
A policy review doesn’t have to mean subjecting yourself to a sales pitch. Many policies just need simple maintenance while other reviews may warrant switching to a new carrier. Silva says, “While it’s a good idea to check with your current carrier regularly, I would have your agency check with other carriers every three years to make sure you’re getting the best deal possible.”
“In the commercial insurance arena, you really should have a regular review with your agent because businesses change so rapidly” adds Botson.
“At least once a year review your coverages and premiums. As insurance agents, having a relationship with our customers and knowing the industry that they’re involved in is the most important thing. Online companies can’t really have a relationship with a customer. They don’t know you and you don’t know them. They may give a lower price but it’s probably temporary and if you have a claim, you’ll have no one to call on a personal relationship level.”
Rick Uldricks is the webmaster for Contracting Business. He can be reached at 216/931-9814 or via e-mail at [email protected]. For information about insurance from Progressive, visit www.progressive.com. Greg Botson can be reached at 800/589-9461, via e-mail at [email protected]. or visit www.botsoninsurancegroup.com.