Western Truck Insurance Archives

Inside Finance/Lease Gap Coverage As Part of Physical Damage Truck Insurance

February 6, 2023February 15, 2023Bob Holtzman

Our last article looked under the hood of Physical Damage Truck insurance, which provides owners/operators of truck and trailer equipment with collision and comprehensive coverage. Collision coverage protects you in the event of a collision or overturn, while Comprehensive coverage protects you against most other physical damage losses. These losses could be caused by fire, theft, vandalism, or animal contact.

You can also add Gap coverage if you are financing or leasing your truck. It pays the difference between the actual cash value (ACV) of the truck and the current outstanding balance on your loan or lease. In fact, the lessor or lender will require you to purchase Physical Damage Truck insurance when financing your vehicle. You should also consider purchasing Gap coverage at the same time.

How Does Gap Coverage Work?

Let’s say you took a loan from the bank on a truck for $50,000. During the first year, you drove 80,000 miles. You were involved in an accident and had a total loss. Your insurance company determined that the truck was worth $35,000 at the time of the loss, but you were still responsible for the outstanding $40,000 on the loan. If you had Gap insurance, your coverage would have paid you the $35,000 value (less your deductible) and another $5,000 for the coverage gap.

It’s important to note that finance/lease Gap coverage does not cover carryover balances, lease penalties, late payments, and extended warranties. In addition, to be eligible for Gap coverage, you must be the original owner of the financed or leased vehicle, and the truck must be purchased from a new dealer rather than a previous owner.

About Western Truck Insurance Services

Western Truck Insurance Services is an insurance brokerage specializing in commercial truck insurance. We know this stuff and want to make sure you do too. Our clients appreciate our dedication to finding competitive rates and offering unparalleled service beyond excellent insurance options. They also value how our state-of-the-art automation provides lightning-fast truck insurance quotes, customer service, insurance certificates, and coverage changes. Contact us today at (800) 937-8785 to learn more.

Under the Hood of Physical Damage Truck Insurance

January 18, 2023Bob Holtzman

Your truck and trailer equipment are the lifeline of your business and represent a significant investment. If your truck is damaged in an accident or fire or vandalized or stolen, you’re off the road, and your business is temporarily sidelined. Physical Damage Truck insurance steps in to get your truck and equipment repaired or replaced, and you back behind the wheel.

Physical Damage Truck insurance insures vehicles against a variety of damages, such as collision, vandalism, fire, and theft.

Policy Options Available

You can choose to get coverage on a specified-perils basis or purchase a policy with collision and full comprehensive insurance. With specified-perils coverage, you’re protected against only those losses your policy specifically lists. While this option costs less than comprehensive-based coverage, the difference is not significant enough to risk having a claim denied because the peril is not listed in the policy. We almost always recommend going for comprehensive coverage, so you are not left with hefty repair bills or, even worse, the cost of a new truck.

You also have a choice of deductibles for both collision and comprehensive coverage. The deductibles you choose (typically set at $1,000) will depend on how much you want to pay out of pocket before coverage kicks in. The higher the deductible, the lower the premium, as you will bear more repair costs. We can discuss this with you in further detail.

Coverage Limits

Ensure you buy enough coverage to cover the value of your truck and equipment. When you purchase Physical Damage insurance, most heavy truck insurance companies require you to submit a “stated amount,” which is your best estimate of your vehicle’s current value. The stated amount should consider the age and condition of your vehicle, mileage, permanently attached equipment, special equipment you’ve added, vehicle upgrades, and engine or major component rebuilds.

Some insurance companies will provide coverage on an actual cash value (ACV) basis, calculated based on the average of your vehicle’s Blue Book, retail, resale, and trade-in values. Once those figures are input and averaged out, the vehicle’s ACV is determined.

The accuracy of stated amounts is critical because it affects how insurance companies process and pay claims. Following an accident, an insurer will pay the lesser of the stated amount and the actual cash value of the vehicle.

Towing Coverage

Towing, recovery, and storage costs for a semi-truck can be an expensive after-accident expense. Towing to a nearby garage that can repair trucks should be covered by your Physical Damage policy. Also, consider how much reimbursement for towing expenses is included in the policy. If your Physical Damage insurance does not provide enough coverage, you may have to pay a large sum out of pocket.

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Ensure Drivers Have the Right Documents for Compliance

January 9, 2023Bob Holtzman

Although it may not be your favorite aspect of being an owner-operator, paperwork management is a serious responsibility. You must have current documentation at all times, including for yourself as the driver, your truck and trailer, and, if applicable, your motor carrier. Missing documentation has serious consequences, including excessive violations that can negatively impact your business and career.

Ensure that you and all your drivers have the required paperwork in their cabs before being dispatched. This ensures that you will be in compliance with driver or vehicle inspections. Officials who can stop a vehicle and perform an inspection include:

Federal Motor Carrier Safety Administration (FMCSA): Oversight and funding of inspections
Commercial Vehicle Safety Alliance (CVSA): Develops inspection criteria and program
State Troopers: Performs the actual inspection

What Paperwork to Carry

We’ve provided a list of documents below that may be required for your type of operation and depending on the gross vehicle weight of your vehicles. The guideline is for an 80,000-pound tractor-trailer. Make sure you review each state’s requirements so that you’re all set before going on the road. In addition, ensure all documentation and permits are current and valid.

State Driver’s License or Commercial Driver’s License (CDL)
FMCSA Authority Letter
Insurance Card: Proof of insurance must show the effective and expiration dates of coverage
Title & Registration
Medical Card
Unified Carrier Registration [UCR]
Intrastate Authority (if applicable)
Base IFTA License & Decals
Apportion Cab Card (over 26K GVW)
Daily Log
IRS 2290 Heavy Highway Use Tax (over 55K GVW)
Safety Certificates
Bill of Lading
Lease Agreement
EPA Emissions Certificate
Hazmat Paperwork

State Permits, including state-specific documents:

Connecticut Mileage Tax Permit (over 26K GVW) NEW
Kentucky Weight Distance Tax (KYU) Permit (over 59,999 GVW)
New Mexico Mileage Tax Permit (over 26K GVW)
New York HUT (over 18K GVW)
Oregon License & Bond (over 26K GVW)
Oversize/Overweight Permit (if applicable)

We recommend keeping all of your documentation (except your CDL and medical card) in a three-ring binder where you can easily add new information and remove expired certificates.

Make copies of everything; you need to carry the originals of your CDL, registration, and specific certificates. Leave the duplicates at the office or home. You may even want to use your phone to photograph or a printer to scan each document as a digital file that you can access on the road if your binder is damaged.

In addition, ensure that none of the documents have expired. This is the most common reason why inspections fail. Expiration dates differ, so it’s easy to overlook one.

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ATRI Looking to Collect Data on the Impact of Predatory Towing in Trucking Industry

December 5, 2022December 5, 2022Bob Holtzman

The nonprofit research organization American Transportation Research Institute (ATRI) recently issued a news release calling for motor carriers and drivers to complete a survey so it can analyze the impact of predatory towing in the trucking sector.

The survey asks drivers and motor carriers about the most common types of predatory towing, what fees or delays they consider predatory, and in which states they have encountered predatory towing. Participants will also be asked to answer more detailed questions about the frequency of towing, which will allow ATRI to quantify the frequency and operational impact of each type of predatory event. According to ATRI, all information gathered will be kept strictly confidential.

“Recognizing its persistent negative impact on the industry, ATRI’s Research Advisory Committee identified the need to better understand this problem as a top research priority earlier this year,” the news release stated.

What Is Predatory Towing?

While most towing companies operate with integrity and legally, some don’t. Predatory towing is any incident where a tow truck provider grossly overcharges, illegally seizes, damages by using inappropriate equipment, or refuses to release a truck and/or cargo.

A predatory towing company, for example, will move in on an accident and tow a truck without consent. Bills issued by predatory towing companies are artificially inflated, with some truckers being charged for equipment that was never present at the accident scene. The costs can range between thousands and tens of thousands of dollars, which can significantly affect insurance premiums for owner-operators and larger carriers.

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Truck Safety: Past Driving Behaviors Provide Insight into Future Accidents

December 1, 2022December 5, 2022Bob Holtzman

There is a lot to be said about looking at someone’s past work performance to get an idea of how they will do in the future. This goes for any occupation, including transportation. Look at a previous driver’s performance and behaviors to gain insight into whether he or she is a potential risk for future violations and crashes and to help with hiring and targeted training.

This is precisely what the think tank at the American Transportation Research Institute (ATRI) has done since 2005 in studying the correlation between driver violations and the potential for their involvement in a crash.

ATRI recently released its 2022 Crash Predictor report, which is based on more than 580,000 individual truck driver records. It identified more than 25 different violations and convictions that increased the likelihood of future crashes, five of which increased future crash likelihood by over 100%. The five behaviors that are consistently strong indicators of future collision involvement are:

Reckless driving violation
Failure-to-use/improper signal conviction
Prior crash
Failure to yield right of way violation
Improper or erratic lane changes conviction

A failure-to-yield violation and failure-to-use/improper signal conviction are the leading indicators of an increased crash likelihood (an increase of 141% and 116%, respectively). Those drivers with a history of a previous crash had a 113% higher probability of having a future crash than the norm.

Why This Data Is Valuable for Trucking Firms

In having the ability to look at a truck driver’s behaviors to improve predictions of future crashes, trucking firms can do a better job of hiring, training, and supervising drivers. If a driver has a previous violation, it doesn’t necessarily mean you don’t hire him or her. However, if you do, you have better insight into what type of specific training and supervision to implement to reduce truck-involved accidents.

Be sure to document your decision to hire a driver with a violation, including the training you provided, so that, if there is an accident, you have a record of your efforts to correct the issue. The same goes for your existing drivers. If they have a violation, provide training and document the targeted remedial instruction you have provided. This is critical in defending your hiring decisions and demonstrating the steps taken to provide proper training when an accident occurs, and there is a subsequent lawsuit. Research shows that when juries consider awards in trucking accident cases, the amount and level of training trucking firms provide to their drivers are among the many factors they consider.

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Revisiting AB 5 for Truckers

November 3, 2022November 3, 2022Bob Holtzman

In 2019, California passed legislation called AB 5, which reclassifies many independent contractors as employees, including truckers. Signed into law in 2019, the “gig worker bill,” as it has been dubbed, took effect in January 2020. However, the California Trucking Association (CTA) got an injunction and stopped the state from reclassifying truck owner-operators as motor carrier employees under that law – until now.

AB 5 uses a three-part “ABC test” to figure out if a worker is an independent contractor, all of which must be true:

The worker is free from the control and direction of the employer (hiring entity) when performing work.
The work is outside the typical scope of the employer’s business.
The worker is customarily engaged in an independent trade, occupation, or business.

This “ABC test” is pretty tough to pass, especially the part about the “work being outside the scope of the employer’s business.” In many other states, independent contractor status is denied only if the worker typically performs work at the employer’s premises. The test in California raises the bar for independent contractor status.

So, what’s happened to put AB 5 back in the spotlight for the trucking industry?

The Supreme Court refused to hear the CTA case, and the injunction was lifted on June 30, 2022. Without the injunction, truck owner-operators can now fall under the gig worker bill’s criteria.

What’s Next?

There are about 70,000 owner-operators in the state. And, according to the CTA, more than 70% of them serve some of the country’s busiest ports, including Los Angeles, Long Beach, and Oakland. In most cases, AB 5 will govern the owner-operators’ relationships with carriers, brokers, and shippers.

Motor carriers will, in many instances, have to reclassify independent contractors as employees, which costs them more in payroll tax, employee benefits, and insurance. For example, AB 5 extends Workers’ Compensation rights to workers who had previously been classified as independent contractors and could not file claims for work-related injuries against their hiring employers. As employees, they are entitled to Workers’ Comp benefits. Be sure you speak with your insurance broker to fully understand how AB 5 impacts your insurance program.

Also, because AB 5 applies only in California, carriers that operate in and outside the state will need to figure out how to separate their operations for the time being to comply with the state’s regulations. (Note: Similar legislation is being considered in other states, so this may change.)

Additionally, independent contractors who work under contract with a trucking company and for themselves will lose flexibility under the new regulations.

Other legal issues with AB 5 also need to be unpacked, as the law is now in effect.

Some expect lawsuits to begin, and, depending on the political landscape, the outcomes may differ. One thing is for sure: to determine how the law may or may not apply to them, carriers will need a thorough understanding of their business relationships with their drivers. Those working with independent contractors must take action to keep their operations running smoothly.

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Motor Truck Cargo Insurance Coverage

November 1, 2022November 3, 2022Bob Holtzman

Does your trucking operation utilize a specific location where you bring in freight for ether warehousing, transloading, or just temporary storage in transit? Have you discussed this part of your operations with your insurance broker?

Motor Truck Cargo Insurance

What you may not know is that your motor truck cargo insurance policy likely will NOT provide coverage while freight is on those premises unless that insurance policy has been properly set up for it.

OUCH.

These are the types of surprises a business owner can do without; especially when finding out about it AFTER an event has occurred.

What? You say…

READ your insurance policy…

Is your premise location listed on that motor truck cargo policy? Do you leave loaded trailers detached from power units? What are the actual limits of exposure you really have at risk in your terminal, and has your cargo policy been written to include that terminal exposure?

If you don’t know or aren’t sure, make sure you check with your insurance broker and READ your policy.

Many cargo policies will not even offer terminal coverage. Most have exclusions for detached trailers, unattended vehicles, and freight off of trucks. For those policies that will allow for storage in transit in a specified location (your warehouse), the usual time period is only 72 hours. Is that limitation going to work for you?

About Western Truck Insurance Services

Western Truck Insurance Services is an insurance brokerage specializing in commercial truck insurance. We know this stuff and want to make sure you do too. Our clients appreciate our dedication to finding competitive rates and offering unparalleled service beyond excellent insurance options. And they value how our state-of-the-art automation provides lightning-fast truck insurance quotes, customer service, insurance certificates, and coverage changes. Contact us today at (800) 937-8785 to learn more.

Beefing Up Security at Your Warehouse or Terminal

October 20, 2022October 31, 2022Bob Holtzman

Cargo theft is big business and happens everywhere throughout the supply chain – including on trucks, warehouses, terminals, and storage facilities. In 2021, there were 1,285 thefts reported with a total loss value of nearly $58 million in the U.S. and Canada, according to a report by Verisk’s CargoNet, which keeps track of cargo thefts. Data from CargoNet also shows cargo theft losses soared to $19 million in the first quarter of 2022 – a 73% increase over the same period in 2021.

The top targeted commodity stolen? You guessed it – electronics (computers and accessories) – followed by household goods and food.

California takes the lead in reported cargo thefts, followed by Texas and Florida.

Warehouses, Terminals Increasingly Targeted by Criminals

While cargo thefts continue to occur in transit and at truck stops, there has been a spike in thefts at warehouses and storage facilities, according to separate reports by Verisk and BSI Supply Chain Services and Solutions, a global provider of supply chain intelligence. The spike in part can be attributed to supply-chain congestion, where trailers are sitting idly at a terminal waiting to be picked up, or cargo is temporarily being stored at the warehouse before delivery.

Who is responsible for the theft of cargo? Your trucking firm, of course, is responsible for the loss if the theft occurred at the terminal or your warehouse. And, without the right insurance coverage, you would have to cover the loss out of pocket.

As we discussed in an earlier article, Motor Truck Cargo insurance won’t cover theft unless your premises location is added to the policy. You need to know your exposure at the terminal or warehouse and ensure your policy is written to address your risk. You also need to know the window in which coverage is available in the event of a loss and any policy exclusions. Go over all of these details with your insurance broker.

Help Stop Cargo Thefts

Beyond having coverage to step up in the event of cargo theft at your warehouse or terminal, nothing beats having robust security in place to help stop criminals in their tracks. What type of security should you make sure is in place? Here are some reminders:

Implement layered security. This starts with your people. This may seem like a no-brainer, but make sure you run background checks on all drivers and new employees.
Educate your staff on your security processes and protocols. And ensure everyone follows them.
See if the processes and protocols work by performing some surprise checks. Fix what’s broken.
Conduct regular internal audits, reviewing all records and looking for anything fishy.
If possible, reduce cargo resting time at warehouses.
Install special locks for the cargo and invest in a tracking system to keep tabs on it.
Install security cameras or remote video surveillance at your location. Cameras can watch over the cargo, parking areas, trucks, and loading docks and inside the facility.
Consider securing the perimeter of the warehouse with guards as an extra layer of deterrent.

Again, we can’t stress this enough: ensure your cargo is properly insured, whether in transit or at your warehouse or terminal.

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Insurance for LTL vs TL Operations: Part 1

September 21, 2022September 22, 2022Bob Holtzman

Freight Capacity and Truckload vs. LTL

Freight capacity is the term shippers use to describe the amount of space secured on trucks and other vehicles to carry their loads. Also known as trucking capacity, it is a critical aspect of managing supply chain deliveries.

In the trucking industry, a shipping service that takes the entire tractor-trailer truck’s capacity with no space to add extra goods is known as a truckload or TL for a full truckload. When shippers only utilize part of a truck’s capacity, which leaves space for additional goods, they use LTL to describe Less than TruckLoad shipments.

LTL freight delivery uses various truck types to ship goods to multiple locations. For example, a box truck with a gross weight below the requirement for a commercial driver’s license is a typical vehicle used by LTL carriers. Although box trucks for parcel deliveries from Amazon shipments, where drivers can make some 40 different deliveries, are a specific example, large tractor-trailers do also make LTL deliveries.

Insurance for LTL operations

Underwriters review LTL insurance operations closely for several reasons. These include delivery time constraints and the extra stress that making many stops puts on drivers who face more unusual situations than long-distance, over-the-road drivers. Additionally, underwriters are concerned because many LTL drivers don’t have and aren’t required to have a commercial driver’s license.

Apprehensions about safety are a significant reason underwriters review LTL operations because they know the LTL industry has fewer regulations and oversight. Insurance companies inspect how freight companies manage their drivers and ensure they comply with federal laws. Should a company fail to meet requirements, underwriting may decline coverage.

Insurance for Full Truckload (TL)

The term “full truckload” (TL) refers to a shipment requiring full use of cargo space in the truck. TL insurance protects a motor carrier’s operations and pays claims for lost or damaged shipments and applicable legal defense expenses.

A TL carrier’s policy traditionally covers the motor carrier for its’ auto, general, and cargo liability. It also may provide physical damage coverage for the equipment.

TL carrier policies are more simple to underwrite than LTL carriers. A review of IFTA state mileage reports, DOT inspections, driving records, and loss reports are generally what is used to determine acceptability and rates.

There are more insurance carriers willing to provide coverage for TL vs. LTL operations.

About Western Truck Insurance Services

Western Truck Insurance Services is a well-respected and professionally managed truck and transportation insurance brokerage. Our clients appreciate our dedication to finding competitive rates and offering unparalleled service beyond excellent insurance options. Our clients appreciate our state-of-the-art automation that provides them lightning-fast truck insurance quotes, customer service, Insurance certificates, and coverage changes. Contact us today at (800) 937-8785 to learn more!

When You Need Commercial Equipment Insurance

September 14, 2022September 19, 2022Bob Holtzman

Commercial equipment insurance is also known as contractors equipment insurance. It pays for theft or damage to contractors’ tools and equipment.

Commercial and residential property owners who own or lease equipment for construction projects need commercial equipment insurance.

A typical commercial equipment policy covers hand tools, power tools, and construction-related vehicles. Mobile items such as forklifts, backhoes, tools, padding, dollies, etc., are covered under a commercial equipment policy. The policy’s protection can extend beyond a contractor’s equipment to include employees’ tools, clothing, and borrowed equipment. Depending on the policy details, additional gear, including mobile offices and trailers, may also be included in the coverage or can be added at a later date.

Commercial Equipment Is Different from Commercial Property Insurance

It’s essential to know a commercial equipment policy is similar but different in its coverage from standard commercial property insurance. For example, commercial property policies exclude coverage for contractors’ tools, which creates the need for commercial equipment insurance.

The conditions and needs for coverage of contractors’ equipment are varied and unique, which requires a specific and separate underwriting process than in a standard commercial property policy. Understanding these differences is why using a brokerage like Western Truck Insurance who are dedicated to your business model is advantageous to your business and bottom line.

Commercial equipment policies typically cover:

Forklifts, pallet jacks, various handtools, freight packaging protections

Construction machinery like backhoes, graders, dozers and conveyor systems.

The coverage may also include :

Total Loss due to theft or fire.

Theft-deterrent devices that prevent the unauthorized use of covered equipment.

Loss control services such as locksmiths and security guards.
Replacement cost coverage.
Coverage for replacement parts and labor costs for repairs.
A deductible for each item of covered equipment.

Western Truck Insurance is here to help you determine how to protect your business loss exposures. However, we know getting the right coverage is essential to you, which can be unclear because insurance policies use many similar terms to describe similar coverages.

Western Truck Insurance Solutions

Our mission is to provide comprehensive coverage at competitive rates, including commercial property and commercial equipment insurance and other appropriate trucking business insurance policies.

Western Truck Insurance operates to the highest ethical standards. It seeks to earn your trust with clear communication and full disclosure, sharing and receiving helpful information, and maintaining a genuine interest in your concerns.