SPECIALTY LINES MARKETS


TRUCKING INDUSTRY

Regulations, rates and rising fuel costs take their toll

By Larry France


08p80.jpg

Long-haul trucking risks are operations that have activities within a radius of 300 miles of the garaging area. Liability, physical damage, bobtail/deadhead (non-trucking) liability, and motor truck cargo are the primary coverages related to this class of business. Liability limits will generally be up to $1 million. Physical damage limits will vary but usually are $100,000 or higher for a single unit and $250,000 for a tractor and trailer. Motor truck cargo is written for limits of $100,000 and higher depending on what is being hauled and where it is being picked up for transportation. Depending on the insured operation, filings such as PUC, ICC, and MS-90 may needed. Most underwriters will provide these. Truckers workers compensation and truckers occupational accident coverages can be placed with most truck specialists.

In November of 2000, NAFTA's arbitration panel ruled that the United States must allow Mexican trucks to operate on U.S. highways or face trade sanctions. According to David Snyder, assistant general council of AIA (American Insurance Association): "This is a misguided decision for everyone who travels America's highways. It flies in the face of common sense and the law." Snyder states that Mexican trucks and drivers frequently do not meet U.S. safety standards and that sufficient resources are not available to enforce the standards at the border.

The United States has an agreement with Canada, which mutually recognizes insurance written in other countries.

Tony Glotzbach of United Brokers, a trucking MGA in New Albany, Indiana, says: "We have seen numerous changes in the pricing of the insurance product. At the same time, there are other changes that are taking place which also have an impact on the health of the transportation industry. Fuel prices, government regulation, driver availability, and the NAFTA provisions all will influence the future of the trucking industry."

How the trucking industry responds to these challenges will determine its future, says Glotzbach. "More drivers are needed which means we need more professional driver training schools." He states that the fuel crisis is compounded by some state regulations that require "special fuel blends" which are more costly. At the same time, regulators are concerned about environmental issues relating to fuels. Trucking firms, according to Glotzbach, have become media brokers in order to offset rising fuel and operating costs. As a source of revenue they have added adhesive signage to their trailers as a rolling billboard.

Glotzbach points out that the owner/operators are good businesspeople who must stay up on all issues regarding their industry. "The independent driver has a computer in the cab to check on delivery schedules, fuel pricing, and any other information that can make his/her operation efficient."

A tougher market for placing truck business is a reality, and there are fewer places to go with your risk. The number of truck underwriters has decreased in the last four years from about 120 to roughly 30 today, according to Joe Hutlemyer of Seaboard Underwriters, a Burlington, North Carolina, MGA. "I expect that number to decrease slightly with the minimum price increase of 20% across the board," he says. "Reinsurance capacity is available but they are not keen on writing wheel business where results have been less than marginal."

Glotzbach observes that he is seeing an average of 15% rate increases and 10% as a minimum. Companies are tightening their acceptance standards and performing stricter underwriting of the trucking risk. "We are seeing a few more declines from carriers," he says, adding that lead carriers are doing more engineering and loss control in the form of inspections and safety seminars.

"We take a different attitude than a lot of people in the insuring of truckers," says Dale Schueffner, vice president of Northland Insurance Companies. "We consider them as almost business partners. If we don't keep them safe and in business, we're out of business too."

Northland has claims adjusters that specialize only in truck claims. They also have loss control people located throughout the United States who spend their time on accounts, reviewing their safety programs, providing consultative services to their safety and maintenance departments, and providing materials, supplies, educational materials, and regular news letters to further ensure the safety of their trucking operations.

"Our corporation has made some major decisions in support of the trucker, such as requiring all Northland insured trucks to have reflective striping since 1993," says Schueffner. "Because this was a requirement for all insureds, we invested in the striping kits and provided them free of charge to the truckers. We also subsidize a national drug- and alcohol-testing program that's available to our insureds."

A very unique idea that Northland has been involved in for the last four years is a nationally syndicated overnight trucking radio show. Schueffner reports that they had been approached several times but because they were not convinced that radio advertising was an effective sales tool for insurance, they proposed the idea of a different concept, a talk format.

"We have a monthly overnight talk show on the Dave Nemo Radio Network entitled Northland Night. The First Friday morning of each month a small group of Northland 'radio personalities' gathers in a studio within our building in St. Paul and goes on the air at about 12:30 a.m. The call-in show is syndicated live, nationally. For three hours we listen and talk with truckers about trucking related issues such as hour of service, driver shortages, shipper issues, and legislation in the industry." Schueffner says that they talk to truckers throughout the United States and Canada who are out there working when most of the public is sleeping.

"We don't use this forum to sell insurance; rather we talk to the drivers about their issues. This forum conveys our concern for the trucker as individual and businessperson, not just someone who pays the premium. As a side benefit we have learned a great deal about truckers and their issues over the last few years assisting us greatly in the design of our products to better suit their needs. We also go to the major truck shows in Louisville, Dallas, and Las Vegas. At every show we're approached by truckers asking if any of the Northland guys are there," Schueffner says.

Just as the truckers must think outside the box by renting their trailers for advertising revenue, the producers and carriers also must do this. Trucking risk has never been an easy class to write to profitability. With the issues facing all concerned, it will take what Tony Glotzbach calls "effective management and regulatory balance" between the industry and government.

The Federal Motor Carrier Administration has two Web sites that deal with trucking issues such as brake safety, fatigue, hazardous materials safety, and licensing and insurance programs:

SAFER: www.safersys.org/snpquery.asp

Department of Transportation: www.ai.volpe.dot.gov/

The following have responded to our survey and have indicated that they are a market for all or a portion of trucking insurance needs.

Adriatic Insurance Co.

3501 N. Causeway Blvd., Ste. 1000

Metairie, LA 70002

Contact: Joseph E. Taylor

Phone: (800) 535-7291

Fax: (504) 832-0605

E-mail: jetaylor@adriaticins.com

Web site: www.adriaticins.com

An agency/insurer operating in all states including NY, excepting New England. Limits of $100,000 are offered. Motor truck cargo also is offered. The carrier is A rated.

Arlington/Roe & Company, Inc.

8465 Keystone Crossing

Indianapolis, IN 46240

Contact: Gary Cummins, Jackie Mattingly

Phone: (800) 878-9891

E-mail: gcummins@arlingtonroe.com

jmattingly@arlingtonroe.com

Web site: www.arlingtonroe.com

An MGA operating IL, IN, KY, MI and OH offering limits up to $1 million. Non-trucking and motor truck cargo are offered. A rated or better carriers include Lancer and Canal.

Baldwin Sadler Corp.

654 Enterprise Drive

Royersford, PA 19468

Contact: Marketing, Ext. 175

Phone: (800) 227-9040

Fax: (610) 792-9200

Web site: www.baldwinsadler.com

National managing underwriters operating in all states except AK and HI (New Jersey-truck physical damage/cargo only). Limits offered are $1 million CSL - AL and $250,000 cargo/physical damage. Target markets are under 20 power unit fleets carrying general commodities, and long-haul. Fleets in excess of 31 or more power units are not written. Other coverages offered are trailer interchange, drive-away contractors coverage for commercial vehicles and Hazmat carriers. The Hanover Insurance Company is rated A by A.M. Best.

Bohrer, Croxdale & McAdoo, Inc.

601 South Ave., P.O. Box 2760

Springfield, MO 65801

Contact: Diane Plank, Donna Allen, Sydney Croxdale

Phone: (800) 779-2550

Fax: (417) 869-5102

E-mail: frontdesk@bcmins.com

Web site: www.bcmins.com

An MGA operating in MO and KS with limits as needed. GL, property and inland marine are available. Northland is the carrier.

Bolton & Co.

1045 Starks Bldg.

Louisville, KY 40202

Contact: Jackie Reinert

Phone: (800) 292-6597

E-mail: gregallgeier@boltonmga.com

Web site: boltonmga.com

An MGA operating in IL, IN, KY, OH and TN and offering limits of up to $5 million. BI, physical damage, cargo, and GL are available. A rated carriers are Northland, National Indemnity and Canal.

Burns & Wilcox, Ltd.

30833 Northwestern Hwy., Ste. 220

Farmington Hills, MI 48334

Contact: Call 800 number for local branch

Phone: (800) 521-1918

An MGA/E&S broker that operates in all states except AK, HI, MA, ME, NH, NJ, NY, RI and VT. Limits offered are $1 million primary and $10+ million excess. Target markets vary per carrier. Also offers property, GL, motor truck cargo and physical damage. All carriers are A rated or better.

Crump Underwriting Services, Inc.

1000 Ridgeway Loop Road

Memphis, TN 38120

Contact: George Estok or local Crump office

Phone: (901) 761-1770

Fax: (901) 684-3818

E-mail: George.Estok@crumpins.com

An MGA/E&S broker currently filed in AL, AR, CO, FL, GA, IA, IL, IN, KY, MD, MI, MN, MS, MO, NE, NC, OH, PA, SC, TN, WV and WI (will be filed in 48 states). Limits offered are $1 million liability with deductibles ranging from $1,000 to $5,000; physical damage up to $250,000 per tractor/trailer combination; $1.5 million per catastrophe; and up to $5 million total values per policy. Target market is long-haul truckers operating from 25 to 150 power units. No Hazmat. Non-trucking use liability of up to $1 million CSI also is offered. The Insurance Corporation of New York (Inscorp) is the A rated carrier.

Delaware Valley Underwriting Agency, Inc.

420 S. York Rd.

Hatboro, PA 19040

Contact: Deneen Dallago, Rosemarie Stumpf

Phone: (215) 443-3586 (Dallago), 87 (Stumpf)

Fax: (215) 672-7983

E-mail: dallago@dvua.com Stumpf@dvua.com

Web site: dvua.com

An MGA/E&S broker operating in DE, MD, NJ, OH, PA and WV and offering limits of up to $1 million in-house. Higher limits are available. No freight forwarders or brokerage authority. Cargo, GL and umbrella also are offered. Carriers are State National, Canal and National Indemnity, all A rated or better.

Freberg Enviromental Insurance

1675 Broadway, Ste. 2210

Denver, CO 80202

Contact: Gayle Watson

Phone: (800) 377-4152

Fax: (303) 623-8101

E-mail: gwatson@feinsurance.com

An MGA operating in all states except AK, AL, FL, HI, LA, MA, MS, NY and NJ offering limits of up to $1 million ($1.5 million in CA). Target market is hazardous materials and waste hauling. GL and pollution coverage is available. The A rated carrier is Gulf Insurance Group.

S.A. Freerks & Associates

911 Park Ave.

St. Louis, MO 63104

Contact: Kristin Sugg, Larry Oelrich

Phone: (800) 432-2601

Fax: (314) 436-1532

Web site: www.safains.com

An MGA operating in IL and MO only and offering limits of $1 million plus excess. The target market is long-haul dump operations; also offered are cargo, physical damage, umbrella and GL. Canal, Lancer and Acceptance are the carriers.

Heath Insurance Brokers, Inc. - Dallas

3100 Monticello, Ste. 900

Dallas, TX 75205

Contact: Ted Hosterman

Phone: (800) 528-5544

Fax: (214) 528-9101

E-mail: thosterman@hibi.com

An MGA operating in OK and TX and offering limits of up to $1 million CSL, including umbrella. Target market is limited Hazmat; will consider most other classes with a radius from 0 - 2,500 miles. Physical damage, cargo, and CGL also are offered. The A rated carriers are Northland and Scottsdale.

Hull & Co.

For long-haul coverage:

100 North 84th Street

Lincoln, Nebraska 68505

Contact: Ken Baker

Phone: (877) 415-4855

Fax: (402) 483-4076

Other trucking coverages:

805 Executive Center, West Dr., #100

St. Petersburg, FL 33702

Contact: Michael Riordan

Phone: (800) 727-4855, Ext. 203

E-mail: markets@hullco.com

Web site: hullco.com

An MGA/broker operating in CA, CO, FL, IA, KS, MN, MO, NC, ND, NE, SC, SD, TX and VA, with limits of $1 million/$10 million (contact branch for confirmation of available limits). Target markets are contractors, cement mixers, tow trucks, airport shuttles, logging, farming, dairy, LPG, fuel/oil, non-emergency transport; will not consider Hazmat. Physical damage/cargo also are offered. Various carriers are utilized to place coverage.

International Brokerage and Surplus Lines, Inc.

120 E. Pine St., Ste. 11

Lakeland, FL 33801

Contact: C. Janner Holliday

Phone: (800) 348-IBSL (4275)

Fax: (941) 687-4684

E-mail: ibslhome@aol.com

An MGA/E&S broker operating in AL, AR, CO, DC, DE, FL, GA, IA, KS, KY, LA, MD, MO, MS, NC, NE, NM, OK, SC, TX, VA and WV, and offering limits of $1 million combined single limit. IBSL is offering a risk purchasing group product targeting transportation companies engaged in the movement of goods for hire, or not-for-hire companies operating similar vehicles for their own use.

International Insurance Group, Inc.

1300 S. Milton, Ste. 218

Flagstaff, AZ 86001

Contact: Jim Labelle

Phone: (888) 467-4639

Fax: (520) 213-8476

E-mail: mexicoinsurance @aol.com

Web site: www.mexpro.com

An MGA that writes only U.S. trucks in Mexico and Mexican trucks in the United States. Limits of $1 million are available, with cargo also being offered. Grupo Nacional Provincial and Seguros Comercial America are both A rated carriers.

M.J. Kelly Co., Inc.

4415 E. Sunshine

Springfield, MO 65809

Contact: Katie McCroskey, Sandy Shue

Phone: (800) 725-7211

Fax: (417) 883-7103

Web site: www.mjkelly.com

A broker that operates in AR, IA, IL, KS, MO and OK with limits of $1 million, primary and $25 million, excess. Target markets are owner-operators, new ventures and automobile transport, with liability, PD, cargo, GL and blanket lessee also offered. Carriers are Lincoln General, Lancer, Reliant American and State National.

Market Finders Insurance Corp.

P.O. Box 6549

Louisville, KY 40206

Contact: Shirley Gordon, Greg Seibel, Joe Miller

Phone: (800) 626-5660

Fax: (802) 426-7970

Web site: www.mfic.com

An MGA/E&S broker operating in KY, MO, SC and TN only. Limits of up to $1 million CSL are available. Target market is truck risks with 1 to 10 power units. Various carriers are utilized.

Midlands Management of Texas, Inc.

P.O. Box 794878

Dallas, TX 75379

Contact: Tony Ladner, James M. Caldwell

Phone: (888) 743-2628

Fax: (972) 588-2020

An MGA operating in AL, AR, AZ, FL, GA, LA, MO, NC, NE, OK, SC and TX and offering limits of $1 million CSL, PIP, UM and Medical. The target market is Hazmat classes with PIP, UM, Medical, cargo, and occupational accident for owner-operators also offered. Carriers are A rated by A.M. Best.

Premier Transportation Underwriters, Inc.

105 N. Palm Ave.

Indialantic, FL 32903

Contact: Eddie Williams

Phone: (888) 321-6400

Fax: (321) 726-0586

A wholesale general agency operating in all states except NJ, MA and NY offering limits of up to $1 million on primary and up to $10 million on excess. Most classes are considered depending on program. Motor truck cargo, physical damage, bobtail, and occupational accident are written. Various A rated carriers are utilized to place coverage.

Professional Insurance Underwriters, Inc.

1600 W. Commercial Blvd.

Ft. Lauderdale, FL 33309

Contact: Linda M. DiNapoli

Phone: (800) 275-2800

Fax: (954) 492-9442

E-mail: linda_dinapoli@piucorp.com

An MGA that operates in AR, CO, FL, GA, IA, IN, KS, KY, MO, MS, NJ, NM, OK, PA, SC, TN, VA and WV on a primary basis; nationwide on excess. Limits offered are $1 million primary and up to $10 million excess. No livestock, carnivals/circuses, non-trucking liability (bobtail and deadhead or driving-school vehicles), and Hazmat are considered. Other coverages offered are physical damage, cargo and workers comp. A rated or better carriers are General Security, UBE, and United National.

Roush Insurance Services, Inc.

P.O. Box 1060

Noblesville, IN 46061

Contact: Scott Sackers, Ext. 23; Tony Armor, Ext. 17; Vince Duvall, Ext. 14

Phone: (800) 752-8402

Fax: (317) 776-6891, 92, 93, 94

E-mail: scott.sackers@roushins.com tony.armor@roushins.com vince.duvall@roushins.com

An MGA that operates in IL and IN only with limits of $1 million primary-trucking; $1 million - $5 million excess; and $1.5 million public auto. Most classes are written. Also offered are cargo, physical damage & non-trucking, liability, public auto, social services and limousines. Reliant American, Scottsdale and National Casualty are the A rated or better carriers.

W.A. Schickedanz Agency

P.O. Box 445

Belleville, IL 62222

Contact: Steve Miller, Jack Miller, David Miller

Phone: (800) 869-9976

Fax: (618) 233-0672

E-mail: wasagy@icss.net

An MGA that operates in IL and MO only, offering limits of $1 million CSL with excess also available. Environmental hazardous waste is the target market. Physical damage, AL, cargo, GL and workers compensation also are available. A rated or better carriers are Interstate, Empire Fire and Marine, Acceptance, National Indemnity, Insurance Corp. of Hanover and Lloyd's.

Robert A. Schneider Agency

5620 Smetana Dr., Ste. 350

Minnetonka, MN 55343

Contact: Mary Alyce Slowe

Phone: (800) 862-6038

Fax: (952) 938-0701

E-mail: ms@rasinc.com

Web site: www.rasinc.com

An MGA/E&S broker operating in IA, MN, ND, SD and WI and offering limits of $5 million. All classes are considered. Liability, physical damage, cargo, GL and property also are offered. Carriers are Wilshire, Westport, American Equity, Canal and Empire, all rated A or better.

Seaboard Underwriters, Inc.

P.O. Box 1478

Burlington, NC 27216

Contact: Flip Hogan, Elaine Barrow and Mary Zeller (Midwest)

Phone: (800) 222-2407

Fax: (336) 229-6977

Web site: seaboardunderwriters.com

An MGA operating in all states except AL, LA, MS, NJ, NY and New England. Limits offered are (truck liability) $1 million primary and $4+ million excess. No market for dump operations or Hazmat. Cargo and physical damage also are offered. Sirius America, Ace/Westchester, Essex/Markel American, and Lloyd's are the A rated or better carriers.

Swett & Crawford Group

109 S. 7th Street, Ste. 600

Minneapolis, MN 55402

Contact: Doug Hathaway

Phone: (612) 334-2388

Fax: (612) 334-2077

E-mail: doughathaway@swett.com

Web site: www.swett.com (for local office)

An MGA operating in all states except LA, MA and NJ and offering limits of $2 million CSL within binding authorities on a primary basis. Most risks are considered, with GL, property, cargo, workers comp, and hired and non-owned also offered. A rated or better carriers are American Equity, Gulf/Northland, Canal, Interstate, National Indemnity, Empire, Scottsdale, Wausau, Western World and Zurich.

Transport Specialties, Inc.

112 30th Avenue North

Nashville, TN 37203

Contact: Steve DeBell

Phone: (800) 869-0852

E-mail: sdebell@transpecinc.com

Web site: www.transpecinc.com

An MGA that operates in all states except AK, HI, LA, MA, NY and TX with limits of $500,000/$1 million. Target markets are motor carriers with 15 or more owner/operators under lease, bobtail only. Physical damage, non-trucking liability and occupational accident also are covered. RLI is the A rated carrier.

Transportation Insurance Specialists

158 N. Harbor City Blvd., 4th floor

Melbourne, FL 32935

Contact: George W. Corolla, Rod Watson

Phone: (800) 444-8474

Fax: (321) 757-6147

Web site: www.tis-ins.com

An MGA that offers a national program (minus MA), offering limits of up to $5 million. The target market is long-haul trucking. Classes not written are oversized, overweight, logging, and Hazmat. Other coverages offered are AL, physical damage, GL, cargo, property, non-trucking and occupational accident.

Carriers are Lincoln General, Royal Sun Alliance, and Republic Western, rated B or above.

United Brokers Insurance

3216 Ballard Lane

New Albany, IN 47151

Contact: Amy Zettel, Steve Pennington, and Ron Gapp

Phone: (800) 444-4824

Fax: (812) 949-4015.

E-mail: amyz@ubinc.com

Web site: www.ubinc.com

An MGA/wholesale broker that writes bobtail liability, physical damage and cargo in most of the continental United States and primary liability in GA, IN, KY, OH and TN. Limits offered are $1 million, with the capability to increase underlying limits to $2 million. Umbrella coverage is available to $5 million and above with some lead time. The target market is long-haul trucking, as well as local, intermediate, trucking and commercial auto. Also offering all property and casualty coverages that pertain to the trucking industry, including property on the repair facility and terminal coverages. Carriers include Occidental Insurance, American Southern, Western Continental, Penn America and UBI depending on coverage written.

Van-American Insurance Services

2 Riverchase Office Plaza, Ste. 208

Birmingham, AL 35244

Contact: J. Pitts, Candace Price, or Connie George

Phone: (205) 985-7511

Fax: (205) 403-0761

An MGA operating in AL, GA and TN for long-haul risks and AL, FL, MS and TN for commercial auto offering limits of up to $1 million CSL, $100,000 on cargo, (no Hazmat) and physical damage for ACV. Target market is long-haul trucking. Carriers include Occidental Fire & Casualty Company of North Carolina and Interstate Insurance Company. *