Dawg On-It Trucking Pawedcast

31. Trucking Insurance Renewal, How To Get An Insurance Renewal

September 11, 2020 Chris Harris, The Safety Dawg Season 1 Episode 31
Dawg On-It Trucking Pawedcast
31. Trucking Insurance Renewal, How To Get An Insurance Renewal
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Dawg On-It Trucking Pawedcast
31. Trucking Insurance Renewal, How To Get An Insurance Renewal
Sep 11, 2020 Season 1 Episode 31
Chris Harris, The Safety Dawg
Transcript
Chris Harris, Safety Dawg (2s):
Hey, it's Chris Safety Dawg Here. Who do we have on this week's show? How do we have none other than me? Alright. Back in episode If theme, we are going to be we back in the episode, 14, I'm sorry. We talk about the insurance problems that we have here in North America and do understand it is a North American wide issue in back in episode 14.

Chris Harris, Safety Dawg (34s):
And the only other episode I did without a guest, I talked about the Y and I think that's really important what the Y is, but we talked about the why they're. So we're not going to be talking about the why today. What I want to talk about here today is how to get your insurance Renewal all right. So there's basically, this episode is going to have to Topics it's all about getting your insurance renewal as well as what to do.

Chris Harris, Safety Dawg (1m 9s):
If you don't get an insurance renewal. So what to do, how to get your insurance, renewal, and what to do if you don't get offered an insurance Renewal so that's what we're talking about today. And let's get Welcome to the Dawg On It Trucking Pawedcast I When it comes to trucking safety. The dawg is on it. What do we do on this show? I get to talk to some of the most influential f*****g executives in our industry so that we can pick up new tips and tricks to use in our everyday businesses.

Chris Harris, Safety Dawg (1m 51s):
Let's get on with the shows, how to give them the insurance. Renewal. This is so important. This is become an absolute necessity that you, the trucking company, owners and safety people hone right in and work diligently to get your safety in or sorry, your insurance Renewal done. As soon as you renewed this year's Insurance the work starts for next year's renewal.

Chris Harris, Safety Dawg (2m 24s):
This is not something that you can think about 30 days, 40 days, 60 days, or even 90 days before Insurance Renewal it starts today. You're really need to be working on your insurance. Renewal today, if it's a year away, cause that's how long it's gonna take you to get prepared. All right. First thing up there. So let's go back.

Chris Harris, Safety Dawg (2m 55s):
Alright. First thing I want you think about your insurance broker. You need to have a Trucking insurance broker. That is a specialist. All right. I Trucking Insurance specialist, broker. There are many insurance brokers out there. Almost anyone who sells car insurance can provide you with a Trucking insurance. They may not be your best choice.

Chris Harris, Safety Dawg (3m 25s):
You really need somebody who has a lot of experience helping other trucking companies like yours. Yes I know sometimes you don't want to use the same people that your competitors are using, but in this case, it is my best advice. You really need to work with your insurance broker, who was a Trucking specialist. They can work with you and they can help you. They can point you in the right direction in many of the areas that are really, really important, right?

Chris Harris, Safety Dawg (4m 1s):
So you're a trucking insurance broker you're really need to be working with them. When the insurance company is looking at your Renewal, they are looking basically at three things, your losses, your safety department and your safety scores. So losses are obviously very important to her insurance companies, safety and the whole department, and were going to get deeply into that and your safety score. So just remember that you need to know that your losses must be below 65%.

Chris Harris, Safety Dawg (4m 35s):
So somebody's at your business needs to be calculating your loss ratio. A I think every quarter quarterly, you need to be calculating your loss ratio. Well, how is a loss ratio count calculated? It is simply your losses divided by your premium. So if you had $50,000 in losses and you paid your insurance company, a hundred thousand dollars in premium, well, 50 divided by 100 would be a 50% loss ratio.

Chris Harris, Safety Dawg (5m 10s):
That's a very simple example. Now, most insurance companies will calculate your loss ratio based on the current term, a three year term. And even some goes back far back as five years of loss ratio. So somebody within your organization needs to be calculating that very same thing. Cause this is the very first way the insurance companies are looking at you. And just because you have a loss ratio that is less than 65%, does that guarantee you Insurance Renewal absolutely not.

Chris Harris, Safety Dawg (5m 45s):
OK. And the reason I say that I'm working with a client right now who has a 30% loss ratio over the last several years and about a 30% loss ratio for the most current term and their were being non-renewed a So

1 (6m 0s):
Please. You've got to

Chris Harris, Safety Dawg (6m 2s):
Be calculating this. This has only the first step in how to do it at all. All right. So just to recap so far, you've got your Trucking insurance brokers is hugely important and then your losses and your loss ratio must be less than 65% for the current term, three years in the past of five years, what's next. While your scores, there are a safety score as your SMS. If you go to the States or you're a national safety code, if you are here in Canada and Ontario, are they call that the CVR score.

Chris Harris, Safety Dawg (6m 36s):
I don't care what should call it, but you've gotta be paying attention to the scores because the insurance company sure as heck is paying attention to the scores. These scores could make you uninsurable. And it doesn't matter what your loss is, or like all three of these components. Remember I said, the, the loss ratio of the Safety scores in your safety department, any one of these components can make you uninsurable.

Chris Harris, Safety Dawg (7m 7s):
So you've got to work on all three of them all at the same time, but you gotta be paying attention to your safety scores. You've gotta be analyzing your safety scores, doing a deep, deep dive on your Safety scores. If one thing his out of whack on your safety scores, why? Because what you gotta be ready to answer. When did that insurance feel that comes in from, or the Safety fellow from the insurance company comes in and they say, well, look at your, you've got an alert in your SMS or your a CIF national safety code is high in this area.

Chris Harris, Safety Dawg (7m 45s):
What they want to hear his, what the heck you've been doing about it and why this is not going to be the same thing in the future. So what did you do about it? Well, you've gotta, you must have analyzed it and put procedures and practices in place already long before the safety guy comes in so that you can show a downward trend trend already, right? This is hugely important to you and your future.

Chris Harris, Safety Dawg (8m 17s):
So be analyzing your Safety scores and put in place to control them. Alright, so now lets get into the Safety department when this Insurance people come in, if they are going to look at your safety department and who is in your safety department and how many people are in it compared to the rest of the company, do the, have the authority to execute properly? Do they have the experience to execute properly?

Chris Harris, Safety Dawg (8m 50s):
Alright, so we're, let's go through a few of those points here in the safety department are going to be asking for your policy and procedure manual. Every trucking company needs to have a policy and procedure manual, and it needs to be covering all kinds of things. Speed limits, load securement hours of work. The fact that the truck driver's need to do a vehicle inspection every day.

Chris Harris, Safety Dawg (9m 21s):
Alright, you got to have policies and procedures as well as in a big one in their is a discipline policy. If you don't have a discipline policy, you need to add it. Alright, then it should be one, two, three, four of the door. So what am I saying? You need to have a discipline policy that goes something like, Hey, your first a violation is a written warning. Your second violation is a written story of your first violation is a verbal warning.

Chris Harris, Safety Dawg (9m 51s):
Your second violation is a written warning. Your third is a suspension and your fourth for the same or similar violation, your excuse me, your, the DOR. So you have to have a one, two, three, four. I also would encourage you to put the wording in something like the same or similar violation and put a timeframe in that either 24 months or 36 months, 24 months, because that's how long it stays on the national safety code or the SMS scores or a 36 months, because that's how long it stays on the driver's personal abstract.

Chris Harris, Safety Dawg (10m 27s):
So a, I like 36 colds the drivers to account for a longer period of time. And I like that, but you need policies. And by the way, a policy that's missing a lot right now for trucking companies is a social media policy. You want to have a social media policy because you don't want some, Driver going crazy on Facebook or YouTube or something. And inadvertently getting the logo, have your shipper or your receiver in the background.

Chris Harris, Safety Dawg (11m 2s):
You know, as the drivers are complaining that, Hey, once again, I'm waiting five or six hours to get offloaded at this place. I won't mention their names, but, and then they see the logo in the background while they may as well have mentioned your name and you are going to lose a customer. So a, so you need policies. You need written documented procedures, please written documented procedures for almost everything. One of the big ones that the auditors from the state's or the provinces looking for is how are the defects communicated when found by a driver doing their vehicle inspection?

Chris Harris, Safety Dawg (11m 45s):
How are they communicated to the company so that the defect gets fixed before the next dispatch being a minor defect? Or of course, if you're on the road, how does it get fixed before you move the truck? If it is a major defect, alright, so procedures, you need that in writing your hiring documentation, hiring, hiring, hiring a you've always, you've heard the prom, the expression that we hire our own problems.

Chris Harris, Safety Dawg (12m 15s):
Well that is of course as true. So the insurance company certainly wants you to have a written document on your hiring standards. So this is where you would say, Hey, I only hire people with 50 years of a Trucking experience. Of course that's a, I'm joking, but you need to have your documentation have years of experience. How many points or violations on they're in VR? Where are you?

2 (12m 46s):
And do you know,

Chris Harris, Safety Dawg (12m 46s):
Need to, if you're a U S bound carrier or, or U S carrier, you need to be looking at PSP reports and how many violations are bad inspections on a PSP report. Are you going to accept? So a, you really need to have years of experience points on their license and bad inspections. I think all you need to be included in your hiring policy. The next step is the orientation. So once you hire people all, sorry, let's go back to the hiring policy for one second.

Chris Harris, Safety Dawg (13m 22s):
You often, sorry, not often. You sometimes make exceptions to that hiring policy. So part of your hiring policy is going to be your acception. When you make an exception, how are you going to bring that person on board? So every insurance company that I know of will allow most trucking companies, yes, believe this or not most trucking companies can hire brand new out of school, truck drivers.

Chris Harris, Safety Dawg (13m 54s):
What the insurance company wants to know is what is your finishing program? So this would be an acception to your hiring policy and you need to have a complete, documented finishing program. And if you hire somebody with less than the qualifications that you've stated in your hiring policy, then you need to have a finishing program for that Driver well-documented and as well as who is your trainer, yes. Who was your trainer and what makes that Driver qualified to be a trainer?

Chris Harris, Safety Dawg (14m 27s):
So several items there, but you need to do that. And you also, in my opinion, should state that there will be no more than blank. Percentage of exceptions, no insurance company wants to hire a, if you have a great hiring policy, three years in a very high standards, but they find out that 60% in your driver's that you are, are all exceptions, no insurance companies are going to insure you sow. What you would need to do is have that as a very low ratio, 10%, perhaps a 15% max.

Chris Harris, Safety Dawg (15m 3s):
Alright, so you need a, a hiring ratio they're in state and then show them the insurance company that you are also tracking it so that they have confidence in your number. So moving on to hiring orientation, once you've hired the Driver, let's bring them onboard. How do you do that? Have this, well-documented have all the topics that you cover in your new hire orientation

2 (15m 28s):
On a checklist. Yeah.

Chris Harris, Safety Dawg (15m 30s):
And the trainer and the trainee are all gonna sign off on this. Mmm. So you need to be covering your policy and procedure manual. How to communicate with dispatch. When does the driver get paid and answer as many questions for the Driver as possible? A lot of companies because of COVID have moved this online or a good majority of it online. And if you're using good software, this is going to help you document the online training orientation process.

Chris Harris, Safety Dawg (16m 0s):
So that's awesome. But to do that. So w the orientation, and then we have ongoing training, every insurance company who wants to know what you're doing about ongoing training and today's world. I don't believe having one Driver meeting a year or in person really is an ongoing training. For those of you who say, well, a there's no law that says I have to have ongoing training. Yes, sir. Is a Canada labor code, the, a provincial labor codes, the state labor codes all say that you have to have ongoing training.

Chris Harris, Safety Dawg (16m 38s):
So you're really need to be training your drivers ongoing. What that means is up to you. Does that mean? Yeah.

2 (16m 46s):
The weekly, daily, monthly, quarterly, I believe

Chris Harris, Safety Dawg (16m 51s):
Monthly is sufficient expecially today. When we have so many great programs out there that you can do on online, Driver training with great documentation. And again, I keep saying the word documentation, please understand you need the document, document, document, everything that you do. And you need to be able to prove to the insurance company that you are doing it because one day should have a bed situation come up to the insurance company.

Chris Harris, Safety Dawg (17m 23s):
He needs to be able to prove to the prosecuting attorney in court, in other words, that you were doing all this stuff. And so that's why it's so important that you document document, document your safety scores. I already mentioned that you should be analyzing these and looking at them very, very carefully every month, minimum every month, and analyzing them, if something gets out line, what happened? I'm a firm believer that every violation on your safety score needs to have a reaction from the Safety department.

Chris Harris, Safety Dawg (17m 59s):
So there needs to be a letter of discipline, goes out to the Driver for every violation and training for every violation. If it's a maintenance item, then you should be writing letters, our documentation, too, the maintenance department saying we've got to sharpen up in this area. And of course, for every score, everything that happens on your Safety scores need to document what it is that you did, who you wrote the letter too. And any training that was needed or determined to be needed by you, and then given to the person.

Chris Harris, Safety Dawg (18m 35s):
And then this could be, when I say personally could be a dispatcher, he needs to be training, or if they forced the Driver to work over hours or something, it, it could be a maintenance personnel, a breaks out of adjustment. Why are we getting so many breaks out of adjustment? Yes I know that the Driver is supposed to be doing a vehicle inspection, but are the drivers doing a vehicle inspection? So in that case, you may be training the driver on how to do a proper vehicle inspection, as well as training the mechanic, to do a better vehicle inspection when their doing it so that you can get that score.

Chris Harris, Safety Dawg (19m 12s):
Now. So safety score is a really important crashes. You're really need to be analyzing your crashes. And again, this all comes back to the loss ratio, but you need to be documenting and analyzing your crashes, your, or your collisions, and putting this all in a file, including the hours of service. I know most of us are using ELBs today, but you need to be printing at least two weeks, have a log books off that ELD system.

Chris Harris, Safety Dawg (19m 46s):
Most of the ELD systems only keep a log book history for six months because that's, what's required by law. But if you have a crash, you better keep it for years. And before you destroy it, if it's a serious crash, speak to your lawyer, because you don't want to be accused of destroying evidence. So your crashes, so you don't need great collision files. You need, you know, the Driver documentation or the hours of service, the pictures from the crashed, the driver interview from the crash, any information you can get from your insurance provider, as well as the road conditions, the pictures are worth a thousand words, pictures of the pavement, the markings, a serious crash.

Chris Harris, Safety Dawg (20m 33s):
You were going to have a professional. Your insurance provider is going to send a professional out there to take pictures. If it's a serious crash, if it's not a serious crash, you got to take it seriously and do great documentation and delve deep into how did this crash happened and how am I going to prevent a future crash? So that's the whole thing. They're a Driver files from my God. The insurance company is a dig into Driver files. You need to be document, document, document, alright.

Chris Harris, Safety Dawg (21m 5s):
And a on this week's Safety Dawg life that I did on Monday. That was what was that? The seventh, maybe seven or eight of September. If you want to go back and watch that. I talked about the most common errors that I see on Driver application forms. When the Insurance con guy comes in, he's the safety guy and they look out of a driver fall. They don't want to see all of these mistakes. It's critical that the application form be completed properly.

Chris Harris, Safety Dawg (21m 39s):
It's critical that you have a great road test and the road test should take hours, not minutes. And you are the references need to be done as well as drug testing references. And of course, PSP a preemployment screening program. Most of the us needs to be done as well. So document that your driver file's and of course, hours of service, a lot of companies that I'm going into now, they are using a yield. These.

Chris Harris, Safety Dawg (22m 9s):
Then when I ask Well who's auditing the ELBs, I've got a funny luck, because for some reason, all of a sudden, everybody thinks, or many companies think that they don't need to be supervising the hours of service while the oldies still allow you to break the law, they don't stop you from breaking the line. You've got to be managing that. So again, the insurance company Safety person was going to ask you, how are you managing your safety?

Chris Harris, Safety Dawg (22m 40s):
How are you managing your hours of service? So there are really important maintenance and a maintenance statement. So you need great maintenance records. And do you need a maintenance statement? I service my trucks every blank, and then what needs to be in the maintenance file so that the Safety company or a story of the safety insurance provider is gonna come in and they are going to audit your maintenance and your maintenance statements are really important there.

Chris Harris, Safety Dawg (23m 12s):
So that's what to do to ensure that you get an insurance Renewal all right. So that was a long gap. What happens if you didn't get insurance renewal? Wow. If you don't get an insurance quote, you better start auditing the process, a talk to your broker. Perhaps you're going to hire somebody like safety consultant that come in and assist you. And again, talking to your insurance broker can help because their, the insurance job in this case now their we're really need to be able to sell your company at a critical piece of that.

Chris Harris, Safety Dawg (23m 54s):
Salesmanship is the safety consultant that your higher or your safety department, so really speak to your insurance broker. Make sure you get a safety consultant on your side, who is well respected by the insurance industry. All right. There's many of them. Alright, but make sure you speak to your Trucking Insurance specialist broker about hiring consultant and make sure that consultant is well respected, right?

Chris Harris, Safety Dawg (24m 25s):
And have that consultant doing an audit and go through everything, make sure they are an outsider, or you want them to be an outsider, not associated with your company. This gives more credibility. And it shows the insurance company that you are going the extra mile. Again, speak to your insurance broker. That is hugely important. And you know, facility is no option right now, as I'm taping this The the facility insurance market is going crazy.

Chris Harris, Safety Dawg (24m 59s):
And I know there's a loopholes in it at the moment. Those loopholes, by the way, are being closed or are being a at least address. And that's going to going to be much more difficult to take advantage of any loopholes that are in the facility market a right now, the last time I checked a facility for a trucking company that was going to the States, the rates are just an unbelievable out of this world.

Chris Harris, Safety Dawg (25m 29s):
And when I say that I've heard of 50 to $70,000 per unit per year, unbelievable unmanageable. It will put you out of business in a very short time. So facility is no option. Get your house in order today in order to have a longterm prospect of keeping your company viable, feeding everybody that you are associated with.

Chris Harris, Safety Dawg (26m 1s):
So last thing I would say is great.

2 (26m 2s):
Is that help

Chris Harris, Safety Dawg (26m 5s):
The reach out, use your insurance broker. I use your safety consultant, reach out. You've got to do something. So just to recap, make sure you are working with your Trucking Insurance Renewal yeah.

2 (26m 22s):
Broker. Yeah.

Chris Harris, Safety Dawg (26m 23s):
And they are going to help you and guide you along the way. And Insurance Renewal starts the day after you have completed this year is Renewal. It takes a long time to make these changes in house and you need to start today. Alright. So that's it for this week, next week, guest is coming up. We're doing painting later this week.

3 (26m 45s):
So with that, I will say Safety Dawg. So I hope you loved the show as much as I did, please leave us a, like a thumbs up or a review or a comment, a rating, if it is, thank you so much, but I do really appreciate you're time and join us again next week for another exciting industry.