Your insurance just as important as buying or financing your truck and trailer — and because car hauling insurance can differ greatly from traditional truck insurance, Super Dispatch sought out an expert to help with explaining precisely how it works.
Fleet Compliance Solutions, owned by Brian Riker, is a trucking consultancy that specializes in car hauling and towing. Due to his 30+ years of experience in the truck and towing industry, Riker is capable of helping any new Owner Operators with getting their authority and wade through compliance violations.
Here are the 8 most important things to know when shopping for truck, trailer and cargo insurance policies.
1. Thoroughly Read Over Your Policy
Comprehensive cargo insurance is really what makes or breaks a car hauler with a brand new authority. But with all three of your insurance policies (truck, trailer, and cargo insurance), make sure to thoroughly read over your policy. Ask plenty of questions, including: What is your monthly cost? What is your deductible? What does it cover? Does it have Auto Hauler Constructive Total Loss? Does it cover over-height loads? Does it cover diminished value? Are there any restrictions, and if so, what isn’t covered?
Understanding your policy inside and out is absolutely vital, and if you’re having trouble with it then consider getting a consultant like Brian Riker. He’s seen the same situation occur over and over again with specialized freight haulers.
“One guy gets quoted $25,000 and the next guy gets $10,000. They think they have same coverage because they have the same million-dollar public liability for $100,000 cargo,” Riker shares. “But what they don’t realize is that one of those policies might have a high deductible… or one might have a lot of exclusions. So you really need to look at your policy to make sure it’s covering what you need.”
2. Be Sure to Have Relevant Car Hauling Experience
Most insurance companies won’t touch a new trucker unless they have had at least two years of driving experience with a fairly clean record. But car hauling is not like hauling general freight, and thus the insurance market for car haulers isn’t the same. Relevant experience is one of the biggest factors in determining the price of insurance – emphasis on relevant. If you’ve got experience in general freight driving a dry van, don’t think that will cut it. Even with a decade’s worth of experience, general freight means little to a car hauling insurance agent.
The defining traits of car hauling are open air cargo, the need for chains and straps to secure, and a hard-to-maneuver trailer. This kind of freight is higher liability and requires skilled maneuvering.
Riker explains that “to show that you have relevant experience, you need show you have operated open-deck carriers, like flat beds or low boys hauling equipment. And if you can document that, you can get more affordable insurance.”
3. Credit is the Biggest Factor of all
“It shouldn’t be, but it is,” Riker states bluntly.
Insurance is ultimately a bet that you won’t cost your insurer more money in an accident than you can pay in premiums. Thus, your credit is an important factor, as they need to know you’ll pay on time and cover your deductible if the worst happens. When starting a business, good credit is necessary.
4. Watch Out for Towing Insurance
Towing insurance can be problematic in a number of ways for car haulers. First, some insurance agents or groups will try to upsell new Owner Operators on extra towing insurance to accompany their liability and cargo insurance. This extra coverage will cost an Owner Operator more money, however basic towing insurance comes standard with many policies. An insurance agent might push for a more comprehensive towing plan as it will save an insurance company money on towing fees in the case of an accident.
Another issue is an agent issuing towing-specific insurance instead of car hauling-specific insurance. It will be cheaper, but it won’t cover nearly what is needed for a car hauler. Sure, a car hauler can operate with towing insurance but will likely be turned down by brokers and puts themselves at risk in the process.
“It looks the same to the FMCSA on paper and it will get an operating authority,” Riker says. “But when they have an incident or they are transporting a vehicle across state lines, it may not cover your damages.”
5. Shop Early, Shop Often
“I see guys put the cart before the horse, so to speak,” Riker explains. “They’ll apply for an authority, and when they need the insurance filed, they’ll get stuck taking Progressive or what I call providers of last resort because they can’t find insurance anywhere else.”
As previously stated, the difference in car hauling insurance plans are up to the discretion of the agent. Shop around and gauge what your best deal is.
6. Always Have Enough Money for your Deductible
This should be a given for all business finances, but always have cash in the bank for unexpected problems. Especially in car hauling where the liability is high, you should always have at least the amount of your deductible in the bank at all times. Yes — that means at least $5,000 to $10,000.
7. Stay Away From Captive Agents
“Much like Shop Early, Shop Often you must also Shop Variety,” according to Riker.
“Stay away from the guy who can only write Progressive or can only write Farmer’s. You want to go to a multi-line agent because they can go shop among dozens of different companies to find you the best,” he advises. “And he’s the one who will probably choose from different underwriters what gets you the best rate.”
8. Have a Plan
Brian Riker’s job ultimately comes down to helping Owner Operators plan for a living, and that coincidentally is also the final piece of advice that he wants to offer — to have a plan when finding car hauling insurance.
“Have some customers ready, don’t just expect to get loads off the load boards. Have an idea at least where you are going to get your customers, and have money in the bank,” Riker concludes. “Have cash put away. Don’t get in a hurry when you want to start your own company.”
Speaking of planning, it’s very important that car haulers do their research, and purchase the necessary tools for their journey as an Owner Operator. Perhaps the most important tool that haulers will need is transportation management software — and Super Dispatch is one of the best in the industry.
If you want to be able to manage your loads, send eBOLs, find loads in your route, and plan out trips all within one easy-to-use app, then you should consider using Super Dispatch. Our all-in-one platform allows Owner Operators to move cars faster and more efficiently than ever before. Try a free trial today!
