You are listening to Insurance Talk with Cheri Martinen and Rex Lesueur. We’re the father-daughter team out of Bancorp Insurance. Bancorp Insurance is a locally owned, family-run insurance agency out of Central Oregon. We’re here in beautiful downtown La Pine recording our wonderful podcast today. It’s actually kind of timely because we’re talking about auto insurance, and specifically commercial lines auto insurance or if you have an auto that you use for your business.
CHANGES IN COMMERCIAL AUTO INSURANCE
Rex Lesueur – Right. What’s been happening in the auto insurance side of the business is, especially commercial auto, claims have been getting more expensive, partially because the vehicles are getting more expensive. If you have a commercial vehicle, let’s just say you have a pickup truck, a brand new pickup truck’s going to cost you $75,000. So if you’re driving a vehicle like that and it’s involved in an accident, that’s $75,000 before you put on your utility box and all the other stuff that goes on them. Then if you destroy a truck like that, the claim is going to be big. That’s a whole lot more than it’s been in the past, and vehicles are also more damageable.
CM – Yeah, the bumper isn’t the same as your grandfather’s bumper. RL – If you take a brand new, let’s say Ford F350, it’s got a really nice aluminum body. That’s a lot harder to repair than the old steel ones. Let’s talk about the tailgate. The tailgate has a camera in it, so back in the day you’d go down and buy a tailgate. It would be $500 or $600. A tailgate now for one of these vehicles is $2,500 because you’ve got to hook up the new camera and everything else. In fact, a lot of these vehicles have five and six cameras on them. It’s getting a lot more expensive.
Commercial Auto Laws
Another thing that’s happening in the commercial auto field is that there’s been a couple of changes in the law. One major change is uninsured motorists are making uninsured motorist claims larger. There’s also been a change in the personal injury protection law-making those claims harder to settle and making them larger. And then there’s just been a general increase in liability claims where it used to be settled for $30,000, $40,000, or $50,000 are now going for $150,000 and $200,000.
We’ve seen it in all lines of our insurance where claims are just getting bigger. So that’s starting to reflect itself in what the insurance companies are doing for commercial auto. We just had one insurance company basically send us a memo and say, ‘We don’t want any vehicles over 25 years old, period. We might take one or two older vehicles if they’re in a fleet of 20 or 30.
Basically anything over that age we don’t want at all, and we’d really like to see all of the vehicles be 15 years new or younger.’
CM – That’s hard. If you’ve got a business and you’ve got a fleet of vehicles, you might have five or six that are over that 15 or over that 20. You don’t want to buy a brand new vehicle every year.
RL – Or you have the dump truck that you use three times a year, and it’s 30 years old. You get 600 miles a year on it, but you keep it insured anyway because you never know when you’re going to need to use that dump truck. Now, all of a sudden, that vehicle is querying the whole account and we either have to split it off and put it on a different policy with someone who charges a whole lot more, or we have to move the whole account and it’s getting a little weird. So also they’re getting a little more particular with drivers. In the past, most of the time, if you had a driver with two accidents or two citations on their driving record, the insurance companies were pretty easy to get along with.
Employees on Your Policy
CM – People make mistakes.
RL – Yeah, they make mistakes, they have an accident or a ticket. But if you have a driver over 65 or a driver under 25 and they’ve got two tickets, they might not be approved. And then what do you do? You have to go buy a more expensive policy from somebody else who is going to take a higher risk of that senior driver or that youthful driver. And of course, I don’t think of anybody 25 as youthful, and insurance companies have always been suspect of anyone under 21 driving a commercial vehicle. But they’re tightening up.
The good news is that we do have insurance companies that are willing to take a look at these risks. It doesn’t matter whether it’s a one-vehicle fleet, if you’re a contractor or some kind of other business where you just have one commercial auto that you use for your business, or you have 10 or 20 or 30 vehicles. We have companies, we have one company in particular, who is still actively looking to write those kinds of vehicles. So keep us in mind. There’s still an opportunity out there.
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THINK OF BANCORP INSURANCE
CM – So when you get your renewal for your commercial auto and you go, egads it went up, or you get the dreaded non-renewal letter, and that’s just the letter that’s saying, based on your fleet of vehicles, we won’t insure you anymore. That’s even worse, right? Think of us.
RL – We have people getting those who have never had a claim. And that just hurts. You think that the insurance company has your back and all of a sudden somebody in the ivory tower someplace makes a decision based on how old your vehicles are. And the next thing you know, you’re getting a cancellation, a non-renewal notice.
CM – Yeah. The computer just goes through and says, ‘Old vehicle, stamp.’
RL – Yeah, send out the non-renewal. So if you have had that situation, please give us a call because we have a way to get them done.
CM – 1-800-452-6826. Or you can visit us online, www.bancorpinsurance.com. You’re listening to this right now on a podcast streaming station. You can find even more information about commercial lines auto on our website.
RL – Be careful out there.
DRIVING RECORD TIP
CM – Yeah, drive safe, right? Make sure when you’re looking at those employees.
RL – Yes. Well, one of the things, just a tip, with the driving record becoming more of an issue as time goes on in commercial auto. Back in the day when I first got into the business, we basically never checked to see whether the commercial auto people had good records except in rare cases. But now it’s different. So now, before you hire somebody, maybe you should be looking to get a copy of their motor vehicle record to make sure that they’ve got a good record.
CM – Yeah, because you’re hiring them for all the right reasons. You want to make sure they can drive for you, that they can really work for you.
RL – There’s nothing worse than hiring somebody, and we have this happen all the time, where someone will say, hey, I got a good employee. Schedule them on my policy. We put them on the policy and it comes back and they’ve got a DUI or something and they can’t drive. So you have to fire the person or make them a pedestrian in your business. And maybe there’s no room for pedestrians. Maybe everybody has to drive. So watch for that.
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Disclaimer: This content is provided for general information purposes and is not intended to be used in place of consultation with our agents.