How Can I Improve My SMS and SAFER Scores?

In our last blog post we talked a bit about SMS and SAFER scores. This month we’d like to take a deeper look at these scores and find ways to improve them. How can you reduce your scores? By better understanding your scores and taking a few simple precautions you can improve your ratings. At Western Truck Insurance Services we love helping you save money on your insurance and great safety scores might just save you a bundle.

Tips for Improving Your Scores

We want you to “Travel with Care” and a big part of this is safety. While improving your scores might help you save money on insurance, more importantly it will help you to become a safer driver, helping you to make home after those long hauls and ensuring that the roads are safe for all of us. Here are some tips for improving your scores and becoming a safer driver.

·         Buckle Up– With long hours on the road it is tempting to leave that seatbelt unbuckled, but this is one easy way to protect yourself. Buckle up as soon as you get into the truck. Make it a habit.

·         Hang Up– Cell phone violations are a big deal. Make a commitment to not use your phone while driving. Instead focus on the road. You can check your text messages and make important phone calls when you come to your next stop.

·         Inspect Yourself– Don’t wait for violations to be discovered at an inspection; inspect yourself. Periodically give yourself a mental inspection and see how you’d do. Are you log books up to date? Is your truck in good repair? Are you speeding? Finding your potential problems before an inspection will give you time to make the needed adjustments and become a safer driver.

·         Check Your Data– When was the last time you used DataQs to check your safety data? Just like you should regularly check your credit score, you should check your safety scores for errors too. If you find any inaccurate information, get it checked and amended.

·         Educate Yourself– Even the safest drivers can use a little reminder now and then. The FMCSA (Federal Motor Carrier Safety Administration) has created an online resource that commercial drivers can use to improve safety practices. Common driving errors are discussed with tips for improvement. Short video clips are available to further teach and train. This is a great resource for any commercial driver.

·         Make Safety a Priority– Inspections might catch violations, but if you’re doing everything you’re supposed to do these violations will be few and far between. Focus on safety, not on your scores. When you institute safe driving practices the scores will follow. Safety should be your first priority. It’s more important than getting a load to its destination on time or squeezing in a few extra miles in the day.

What are you going to do to improve your safety ratings? We encourage each driver to take a few minutes and renew their commitment to driving safely. SMS and SAFER scores might help you to remember the importance of safety, but even without these scores we want you to get there safe.

 

Protecting Your Business is Serious Business

Work Related Accidents Impact…

  • You and your net worth
  • Your time and focus
  • The company you have built and its Stakeholders
  • Employees and their families
  • Lease Operators and their families

Risk Management is Mission Critical

  • What happens if an employee sustains a work-related injury or worse?
  • What happens if a lease operator sustains a work related injury or worse?
  • How is your exposure as a business owner different in each scenario?

Lease Operator

The Exposure…
The reality of occupational accident exposure is that if Lease Operators do not have coverage, then a serious injury will result in a claim made to the Motor Carrier’s workers compensation policy. Successful or not, you can count on the claim being made.

The Facts…
Occupational accidents and injuries can have devastating effects on an organization without proper protection.  If there’s enough money involved, personal injury lawyers will challenge the financial responsibility of all involved parties.  The related legal defense costs alone can severely impact operating profits and even drive many businesses into bankruptcy.  The coverage to reduce the exposure is both prudent and affordable.

What are the options?

Option #1:
Leave everyone exposed to a “parade of horribles.”

Option #2:
Agree that your lease operators are statutory employees and enroll them in your workers comp plan. This is the most expensive solution and may cause you to absorb the full onslaught of accompanying payroll taxes (perhaps even retroactively).

Option #3:
A Group Occupational Accident Plan for your lease operators allows you to pass through the related costs to them at a group rate, protecting them with 24/7, 48-state coverage, including survivor benefits, and defends your independent contractor agreement with them. Moreover, if you lose in a challenge by a court of law or workers comp review board, the Occupational Accident policy for the injured lease operator can be designed to convert to a ‘full blown’ workers comp policy and eliminate your company’s related contingent exposure.

Key GAIC Advantages for Lease Operators

  • Coverage limit issues, i.e., Plan A, B, C, or D;
  • Commencement Period
  1. GAIC gives 90 days to report a claim, treatment can begin when necessary
  2. Competing policies say treatment must begin in 90 days
  • Sub-limits: e.g., most competitors have $ 1,000 max limits for chiropractic care, ambulance or air flight, physical therapy, & other rehab treatment GAIC does not impose the sub-limit Accidents must be reported within 90 days, benefits can begin immediately upon reporting or at any time thereafter, and are not subject to a 90 day commencement period…and Accident benefits include dental where most competitors do not
  • When a $ 2mm CSL per occurrence aggregate for any one accident is selected, $ 1mm is set aside specifically for medical expenses, & $ 1mm for death, disability, & rehabilitation.
  • GAIC assigns a Nurse Care Manager to help insured deal w/ Psycho-Social issues
  • Temporary and Long-Term Disability Income benefit is based on Schedule C income and retro to day 1 (most competitors impose a 7 day grace period) and applies to the definition of “Under the course of doing business,” which includes maintenance, cleaning, & other misc activities…so coverage is not limited to just driving and loading/unloading
  • The $ 1mm maximum accident medical benefit is annual, not a lifetime one
  • Death benefits apply if death occurs within 2 years (instead of just 52 weeks) from the accident

Important Coverage Points for Fleets

  • Major point:  to keep personal injury attorneys away and adverse decisions from workers comp review boards, fleets need to offer the most broad occupational accident coverage available
  • GAIC does not impose Aggregate Limits on the Group Policy as do competitors…if a fleet has 100 drivers, each with $ 2mm Aggregate Limit, then GAIC’s exposure is $200mm.  A competitor will attempt to sell the same deal but put a $ 5mm or $ 10mm aggregate “stop loss” limit in
  • Average length of disability with GAIC is 29 days, which is 9 to 14 days shorter than before the Nurse Care Manager benefit was introduced.
  • Any expense not covered is a potential black hole liability
  • GAIC’s policy limits are generally higher than competitors
  1. Accidental death benefit pays $ 50K more ($ 300K vs $ 250K), i.e., the $ 2000/month survivor benefit pays for 125 months instead of just 100 months
  2. Accidental Dismemberment pays $50K more ($ 300K vs $ 250K)
  3. Paralysis benefit pays $50K more ($ 300K vs $ 250K)
  • Contingent Liability Feature available to the Motor Carrier as part of the Occupational Accident plan…it defends the lease agreement if a lease operator accident claimant attempts to claim employee status & collect workers comp benefits…and it defends the company in a Court of Law or in a Workers Compensation Review Board…if you lose, the contingent liability feature will pay up to statutory limits of a Workers Comp Policy

Need more information or help? Western Truck Insurance can answer all of your risk questions and help protect you and your business.

WHAT IS STATED AMOUNT PHYSICAL DAMAGE?

Unlike private passenger type vehicles commercial trucking physical damage is often insured on a “stated amount” basis.

Physical damage premiums for private passenger type vehicles are ordinarily determined based on the original cost of the vehicle and its age.  This is practical largely because these vehicles depreciate in an easily predicted fashion.  Heavy commercial vehicles, however, are designed to outlast their engines.  Truck tractors, often traveling well in excess of 100,000 miles per year are designed to have their engines replaced regularly.  The value of the vehicle therefore is heavily dependent upon how recently the engine has been replaced.  A four year old tractor, for example, with a new engine, is worth considerably more than a similar four year old tractor with similar mileage and with its original engine.

Since it is more difficult to determine the worth of heavy commercial vehicles based on original cost and age, truck insurers have developed an alternative method, “Stated Amount” for providing physical damage coverage and determining premium.  The insured “states” the maximum vale of the vehicle and the premium is determined as a percentage of that value.  That percentage decreases as the deductible increases. 

In general lower valued vehicles pay a higher premium percentage than more valuable vehicles because damage that would be a partial loss on a high valued vehicle could be a total loss on an older, lower valued vehicle.

The insured does not automatically receive the stated amount in the event of a loss.  The amount paid is always the least of three possible values:

  • The actual cash value of the vehicle at the time of the loss
  • The cost of repairing or replacing the vehicle with one of like kind and quality
  • The stated amount of insurance for the vehicle

Therefore the most that the insured could collect in the event of a total loss would be the stated amount. 

On a stated amount basis truckers must value their vehicles in advance.  At each renewal the values must be reevaluated.  Automatic coverage is made more complex because of the need for timely vehicle valuations.  Professional underwriters will require insureds to justify in advance valuations that differ significantly from average expectations.  A little time spent resolving these issues when the vehicle is initially insured can avoid serious claims settlement problems following losses.

Truck insureds and truck claims adjusters, however, both favor the stated amount approach.  They like the idea of having an automatic cap on the value of the vehicle.  It makes claims settlement negotiations less contentious.  It is also easier and more accurate to compare competitive quotes on a percentage of value basis.

WHAT IS PHYSICAL DAMAGE INSURANCE?

Operators of commercial vehicles, such as truckers, need a number of insurance products.

Automobile Physical Damage insurance covers the damage to, disappearance, or destruction of actual automobiles and/or their equipment, such as tractors, trailers or semitrailers, trucks, or private passenger types of vehicles.  Equipment does not include personal effects (clothes, eyeglasses, etc.)

Covered autos are determined by designation symbols that must be tailored to whether the automobile that is to be insured is owned, rented, leased, hired, or borrowed and the type of vehicle.  Premiums usually depend upon the type and age of the vehicle, coverages chosen, garaging location, driver information, deductibles chosen, and loss experience

Such coverage is divided into two major components “collision” and “all perils other than collision.”   Collision covers striking another object (including other vehicles) and overturn of the vehicle.

“All perils other than collision” include loss by fire, lightning, explosion, theft, windstorm, hail, earthquake, flood, mischief, vandalism, falling objects, or the sinking, burning, collision or derailment of any conveyance transporting the auto.  These coverages can be purchased on an all inclusive or comprehensive basis, or a basis where each peril is specifically described (called named peril or limited specified causes of loss.)  In both cases there are some perils which are excluded from coverage.

Excluded perils for which no physical damage insurance coverage is ordinarily provided include nuclear hazards, war or military actions, organized racing or demolition contests, wear and tear, road damage to tires, and damage to most electronic equipment not required for the operation of the vehicle.

Although not mandated by law, like automobile liability insurance, physical damage is ordinarily required by financial institutions that loan money to purchase automobiles.  Since the automobile is used as collateral for the loan, the lender needs to make sure that the collateral remains unimpaired.  The insured’s own equity in his or her vehicle is also protected.

There are ordinarily separate deductibles for the “collision” and “other than collision” coverages.  Deductibles are the portion the insured must pay in the event of a loss.

The amount of coverage is ordinarily limited to the cost of repairing or replacing the damaged or stolen property or its value less depreciation.  If an insurer pays a physical damage claim that is the fault of someone else then the insurance company upon paying the physical damage claim assumes the right to recover the cost from whoever caused the claim.

Truck Insurance – Cost and Quality

You may not believe how many truck operations purchase their truck insurance coverage on the basis of lowest price. This practice, however, is not just the company’s fault, but also the fault of many truck insurance agents who supply coverage on the basis of lowest price. It is not only unbelievable, but also a dangerous approach to keeping you, your business and your family safe, both physically and financially. Apply the same rules to buying truck insurance as you would to buying any other product or service. When buying truck insurance, consider the following: 

  • Combined Deductibles
  • Emergency Expenses
  • Rental Reimbursement
  • Increased Towing Coverage Limit
  • Personal Effects Coverage
  • Quick and Accurate FMCSA and State Filings
  • Quick and Accurate Certificate of Insurance Issuance
  • No Taxes; No Fees
  • Accurate and Detailed Insurance Accounting Information
  • And the list continues

Keep in mind that not all insurance policies are the same, and neither are insurance brokers. 

Ask your truck insurance agent questions and get complete and understandable answers, and you will quickly learn that, not only can you save money on truck insurance, but you can get more coverage for the money you spend.

Truck Insurance Agent/Broker Selection Criteria

It has been determined that one of the most difficult things a buyer of truck insurance goes through is how to qualify the insurance broker.   All brokers are not alike and, especially with commercial truck insurance,  the differences can be staggering. 

So what’s a buyer to do ??

It has come to our attention that a recent independent study was done to address this issue.   In that study many areas are covered that deal with learning how to obtain the perfect coverage and pointing out some of the problems with insurance coverage in general but the best takeaway from it certainly is the detailed list of capabilities that a qualified commercial truck insurance broker should be able to do.

This listing solves the problem and all you need to do is inquire from the broker who you may already be using, or plan to use,  if they 1) understand the capabilties you are asking and 2) do actually perform those items.

Check out this link to see the preview of the full study and request it for free.  There is no charge for this vital information which will make your job in qualifying an insurance agent or broker much easier.  Goto:   http://truckinsure.com/slideshow2.html