New Challenges in the Insurance Industry

Congratulations to everyone on the Over the Road team! 25 years is an incredible achievement. I have been a writing contributor to the magazine since 2005 but long before that, I was a reader and purchaser of advertisements in Over the Road. In my previous career I worked for TNT Logistics and OTR was my magazine of choice. It’s hard for me to believe I have been doing these articles now for almost 13 years.

It has been several months since my last article as I have been blessed with work, lots of work. The reason for all the new work is that the insurance industry is now making things very tough for trucking companies. If you, as a carrier or Owner Operator, have any blemish on your record, your insurance renewal this year will be tough; very hard and tough.

Why is the Insurance Industry so strict this year? The industry answer is that they are not making a profit.

What types of blemishes are causing problems and issues? The crash ratio is always a concern but this is easy to understand. If you have had too many collisions that are causing the insurance company to lose money on your account, then renewal is questionable. But that is not the only blemish or problem causing this tight market. Companies “Safety Scores” are very much a concern. Your SMS scores (USA DOT scores) and your Provincial Profiles scores (in Ontario we call this the company CVOR) are always being reviewed and scrutinized. If these scores are high, then you can expect a problematic renewal process.

I can understand high safety scores. As you likely know, every time that you have an event such as an inspection, a conviction for a ticket or a crash, it gets recorded on the companies safety score. If the inspection has any “X”s, it is putting points onto the profile. If a crash has indications of the O/O or carrier being at fault or not legally on the road (Impropriety), then the crash is going to have points associated with it. Safety scores are essential.

When you as a Driver or Owner Operator apply for work, you have the right to ask about the company’s safety scores. Why should you? Well, they significantly affect you as well. If the company has high scores, then you will be subject to more scale inspections. It is simply as simple as that. During these more inspections, since we are all human, we are capable of making a mistake and therefore we can quickly get a ticket.

To demonstrate just how problematic the insurance market is right now, I have a new client that was refused its insurance renewal. For ten years the insurance company has made a profit with this client. The client has never had a money-losing year for the insurance provider. But this year, the current insurer refused to offer renewal. Generally this year, if one company refuses to provide insurance, then all the others tend to back away as well. The reason the insurance was declined was not ‘loss ratio’ and it was not ‘safety scores’ but it was because fourteen years ago the trucking company failed an MTO Audit. This failure left a record of a ‘conditional’ rating, even though the company had a very low and very good safety score and record for years. A conditional rating means a difficult renewal. I was able to help this company get its renewal by proving that they had requested a voluntary MTO Audit.

So there are a few things to remember. First, everything that you do while driving your commercial truck matters. A clean inspection helps the company CVOR or SMS and it also goes onto your personal CVOR record. If you were to seek employment, the new company that you are applying to will be asking for a copy of your Driver CVOR abstract. Clean inspections on this record will help you get a new job. Of course, if your inspections are speckled with blemishes, it could very well stop them from considering hiring you. The same is true for everything that shows on the CVOR.

All your actions matter to both you and the trucking company you drive for. What you do on the road affects everyone at your company but primarily it affects you. Your actions determine if you are employable. In this insurance market, the insurance providers are looking at individual drivers and denying insurance coverage for those that they think don’t deserve to be in our great trucking industry.

So be safe out there!

Chris Harris
Top Dawg, Safety Dawg Inc.
@safety_dawg (twitter)

About Chris Harris, Safety Dawg

Chris has been involved in trucking most of his adult life. He drove truck for and worked in various office/management positions for a major truck company. His last position of 5 years in the safety department where he was responsible for the recruiting of Owner Operators and their compliance. He joined a trucking insurance company in 2001 and has been in the insurance side of things until making Safety Dawg a full-time endeavour.