Wisdom Insurance: Save on Commercial Trucking Insurance

Intro

Host: What’s up, guys? In this episode of Toilet Talk, we have Toby from Wisdom Insurance. He shares what type of insurance pros should have, and you want to stick around to the end because he’s going to tell you how to potentially save tens of thousands of dollars. All right, let’s jump in. [Music]

Why Wisdom

Host: What sets Wisdom Insurance apart from the local agents or other insurance agencies?

Toby: Yeah. So Wisdom Insurance, our background, expertise, and experience in the industry, knowing exactly what to call the risk and how to classify vehicles. Then, being able to compare to the local broker who maybe doesn’t have any clients in the industry, or just one or two. Whereas we’ve got hundreds and hundreds of clients. That allows us to know exactly which insurance carriers to go to in order to get competitive and comprehensive quotes. So we’re not wasting time unnecessarily. We understand exactly what our clients’ needs are and what they value in terms of comprehensive coverage at an affordable price, right? Everybody wants a fair price. You don’t want to overpay for insurance. And at the same time, you want to make sure that you’re protected.

Our experience, this is our 12th year in business as an agency, really my 10th year specializing in trucking and trucking risks. As an expert, from us, you’re getting real service instead of lip service. You’re not running around in circles and explaining yourself as a customer over and over to an insurance agent that just doesn’t really get it or understand it.

You can tell right away people value our questionnaire because it’s designed and asks questions that are super specific to the industry. So I think that is what really sets us apart is our experience. We’ve been through it. We know exactly where to go with the risk exposure and we’re not wasting people’s time.

Avoid This Mistake

Host: What are some of the scary stories that you can share about pros being misclassified by their local agent or insurance agency?

Toby: Yeah, so I would say business classification and vehicle classification are two of the most critical components of any type of risk that has commercial trucking. When you’re talking about guys that are going out there and being classified as, for example, a trucker. Like we had a client who was a junk removal client actually in Hawaii.

They were carrying a fridge down the stairs. They tripped at the bottom of the stairs and dropped the fridge on top of a truck or a car, smashing the car. The claim got denied under the commercial auto because junk removal in the act of loading or unloading, you’re covered under the commercial auto as opposed to the general liability. So the general liability coverage denied the claim. Then, because they were misclassified as a trucker, the commercial auto policy denied the claim. It created this gap in coverage due to the misclassification.

So those are the types of claims and scenarios that keep you up at night. In that example, we actually reclassified that client under debris removal, which is the correct classification for junk removal companies. That client went from $36,000 a year to $25,000 a year. So they actually saved $11,000 that they were being misclassified under this basically innocuous trucking classification.

Each carrier is different, so knowing how to navigate those specific details really matters at the end of the day when it comes to insurance because the devil is in the details. When you’re talking about the business classification, the vehicle classification, how the general liability is classified, whether the umbrella goes over the commercial auto or just the general liability and the workers comp, those make a huge difference at the end of the day. They can create gaps in coverage that, if you don’t know what you’re doing, can cause your client a lot of heartache at the end of the day.

So, the difference of being misclassified could literally be tens of thousands of dollars. Sometimes we even see that in the vehicle classification as well. When you’re hauling, running trucks, whether they’re flatbed trucks or if they’re over 26,000 GVW, we ask all that information upfront.

What we’ve been doing lately is just having clients text us pictures of the trucks so we can review the trucks before we put them on the books with a carrier to make sure that we’re accurately representing the truck and then also the business classification. Those minor details add up to make the difference. You want it to be fair and accurate. The last thing that you want is a vehicle not accurately reflected on the valuation of the truck. We’re insuring trucks that are $200,000 in value, and they’ll have some $50,000 to $100,000 worth of permanently attached equipment. If that’s not accurately represented on the applications to the carrier, it can cause a real problem.

Insurance Needs

Host: So, if you are a porta potty business, a septic business, a grease pumping business, you have the same types of trucks generally. What’s the typical insurance coverage need for people in the portable sanitation industry?

Toby: Yeah. So the basics are your general liability, commercial auto. If you have employees and drivers, you’re going to need workers comp. Commercial auto or umbrella is one of the basic coverages, and then pollution liability. You want to make sure that you’ve got a pollution liability policy. Ancillary coverages would be inland marine. You want to cover your portable equipment while it’s left behind, any pumping equipment, anything like that. Mobile equipment is going to be covered under what’s called an inland marine policy, which covers equipment, mobile equipment, rented and leased equipment.

If you need to rent temporary mobile equipment, you’ve got the capacity to do that and cover it under the inland marine policy. Cyber liability is becoming a real issue for small business owners. People getting their computers hacked and frozen up and then ransomware being put onto people’s computers and email inboxes. We’re seeing a rise in those types of claims more now than we ever have. I’ve seen more claims in the last 2 to 5 years than in my 20 plus career in the insurance industry. Those are real risks that you need to be protected against.

Crime coverage, employment practices liability. If you have an employee who is accused of discrimination or if you’re accused as the employer of discriminating due to age, race, sex, religion, anything like that, you can be sued and that’s specifically excluded under your general liability policy. The only way to have coverage for that particular exposure is to have an employment practice liability policy. Those are additional exposures that you might come across as you grow in scale and become larger as a company that you really need to protect yourself against.

Getting a Quote

Host: What are the things that pros need to have prepared in order to get an insurance quote? I know that you have a great example to walk us through.

Toby: We definitely do. We have a basic questionnaire that we send out to everybody and it identifies exactly what your risk exposures are. It will cover vehicle lists, driver’s lists, EIN number, equipment list, payroll, and expected annual sales. We send the client one questionnaire. It’s a fillable PDF they can fill out. It’s a three or four-pager. They kick it back to us and then from that one questionnaire, we can go to five, six, seven different companies, ten different companies and start to get quotes.

One of the exciting things we’ve seen recently in the industry is, even though rates have been increasing, more companies are coming out offering competitive quotes. Five years ago, in each state, we had maybe one or two options, and now we’ve got four, five, six options in almost every state. Our bandwidth of insurance carriers and options has gotten much more competitive and, as a result, we’re delivering more quotes than we ever have compared to previously when we had a limited number of carriers that would write the coverages.

Our questionnaire goes out, you fill it out one time, kick it back to us, and our sales team is running quotes. The agents are running quotes, and we’re putting together the best comprehensive coverage at the most competitive price and delivering that. Then we reach back out to the client and review everything.

States

Host: Can you go over some of the differences that pros might see by state?

Toby: Yeah, state by state, there are some really big differences in exposures. More so now, we’re seeing in the harsher litigation climates or legal climates, verdicts that are just astronomical have caused rates to increase two, three times over the last 5 to 10 years. So, if you look back on the average per unit vehicle cost, we’ve seen those numbers skyrocket in certain states.

Florida is definitely one of them. You have the worst risk exposures with hurricanes causing billions of dollars in damage every other year. You have no-fault laws in Florida, making it very difficult. The issue of uninsured and underinsured drivers who can’t afford insurance also contributes to this. You have a lot of unique exposures in some southern states. Louisiana is one of the toughest, with Florida right behind it, and then Texas and Georgia. Those three or four states really struggle with getting competitive pricing on the commercial auto piece.

Then, you have other states like in the Midwest, where there are more carriers and options, and they might be a little more friendly. Ohio is one of the cheapest states to do business in. West Virginia and Pennsylvania are reasonable, but then there’s Michigan, a no-fault state, and California, which is always the most difficult. Recently, within the last month, we’ve gained access to one or two additional options in California, so we’re excited about that. Washington state is also a real trouble state with regards to multiple options.

It really depends on the unique risk characteristics involved in those different states. The number one driving factor would be the legal climate and how claims are handled and managed, as well as the laws on the books determining those results. The natural disaster risk exposures also significantly impact areas like the Midwest. We’re seeing home and auto rates double and triple due to wind and hail and other naturally occurring events. Complexity varies across the United States, but those southern states are typically the most challenging, along with New York and California.

Mitigate Risk

Host: Can pros lower their insurance costs by implementing things like dash cams, fleet software that monitors stuff like that?

Toby: Yeah, that’s a great question. Absolutely. Every insurance company has its own specific program that you as a business owner should be reaching out to either the carrier or your agent to learn more about. Many companies offer just a flat rate discount for participating in their telematics program. There are various third-party options, and, in general, it’s great practice. When you talk about what makes you a better risk to get lower insurance, it’s implementing best practices.

Telematics is at the very top of that list. If you have a recording of an accident, you know exactly who’s at fault, whether your driver says they’re at fault or not, or if it becomes a he said/she said situation. You avoid that with a recorded copy of the incident. With forward-facing dash cams and driver-facing dash cams, you can see if the driver was on their cell phone. Having telematics surrounding the entire vehicle, you know exactly what’s going on during an accident, so you’re not wasting time telling a narrative that’s not true. You’re sending the dash cam footage to prove you were not at fault in an accident.

The difference between at fault and not at fault many times can lead to us seeing 50% increases when at-fault accidents hit the books, or even 80 to 100% increases. It can be devastating to your business. When you think about the use of telematics, many carriers offer discounts—5 to 10, or even 20% discounts—for the telematics portion where you plug a device into the truck, providing feedback on whether the driver is hard breaking, speeding, quick accelerating, or taking sharp turns. That feedback goes to the business owner, allowing you to understand if further training is needed for a safer driver and overall fleet safety.

The insurance companies have programs for these discounts. You just need to inquire. Things to ask about include whether the company can take adverse action due to poor driving. Some companies’ programs are purely positive and feedback-based, while others can raise rates or cancel. Make sure that the company you’re dealing with doesn’t take adverse action as a result of participating in their telematics program.

It’s also essential establishing driver safety training post-accident and having a formal written program addressing all issues. Say, if a driver receives a citation or ticket, they might need to partake in additional training to get back on track. These steps post-accident really distinguish companies as best-in-class using best driver practices. We aim to assist our clients in these respects.

Past Claims

Host: What advice would you give to a pro that’s maybe had trouble finding insurance due to past incidences or, you know, their record might be scarred?

Toby: It really is challenging if you have a list of drivers with troubled motor vehicle records and cab reports. It gets back to implementing safety programs and stricter hiring guidelines, then turning over drivers with poor driving histories.

When making business decisions, do you sacrifice the integrity of a clean driving record to fill a need? A high-risk insurance market exists where brokers can turn to wholesalers. If you’re facing much claim frequency or severity and struggling to get quotes, you’ll need to reach carriers in that high-risk marketplace to return to competitive quotes.

The insurance piece of it can be challenging, but it all starts with your business practices, who you’re hiring, and those sorts of decisions to maintain a clean driving record and a good driving history. The insurance companies today go into immense detail—cab reports, DOT filings. They’ve got great detail on the risks before we even start discussing them. So in terms of insurance, data, detail can be in loss history and cab reports, which are scrutinized now more than ever.

The Future

Host: What’s the future of insurance look like? And by the way, if you say AI, I’m going to end this podcast.

Toby: Well, I hope to God not, because then I’ll be out of a job, right? I don’t think AI will replace agents anytime soon because it still requires knowledge and experience, a history, and really knowing and understanding your client. To advise people on how much of an umbrella they need, knowing their net worth, fiscal philosophy, and risk tolerance is crucial in creating an insurance program fitting their needs. So, I don’t see AI replacing that soon.

In terms of the industry, we’re seeing rate increases and costs to repair vehicles higher than ever. Rates, I don’t see those stabilizing anytime soon. However, we’re seeing more companies quoting risks that haven’t been addressed before in the past, which is a positive. The increased competition should help to bring down costs as more insurance companies enter the industries that we specialize in.

There’s always a need for tort reform, for insurance regulation, and amending laws that may not make sense. Long-term, in two to five years, expect to see rate increases continue until costs eventually flatline concerning increases. With medical claims and commercial auto repair costs not decreasing anytime soon, expect consistent increases. If I’m delivering 5 to 10% renewals, I’m thrilled. Even 10 to 20%, or sometimes 20 to 30%, can occur. If you have claim activity, it can be higher. Delivering a 20% renewal right now is bullish.

The market will eventually soften and shift. Insurance goes through hard and soft markets, following the economy—when insurance companies have more money, investing heavily, they become aggressive in writing new business, expanding. When they don’t, they tighten up, deny everything, and decline risks that would otherwise fit their portfolio. They’re cautious due to the uncertain economic future, considering premium collections and claim payouts to make sense of rate structures.

Best Advice

Host: What’s the one thing that you want our audience to take away from this episode?

Toby: I would say to be more educated about the risks and items within your control, like safety programs, focusing on driver training and education, DOT compliance, and maintenance on your vehicles. Implementing becomes top-notch when as a business owner you say, “I’m doing all these things that make me better than someone else.” You’ll keep your insurance rates down long-term compared to someone not doing what’s right.

Implementing telematics programs and understanding what goes into rates ensures access to the right carriers. Those are within your control. Rate factors you can’t control; they are what they are. Just strategically present yourself in the best light to achieve competitive rates. Understanding the market space is key.

Host: So much good information you’ve shared, Toby. Where can people find you?

Toby: Wisdominsurance.com is our website. My cell is 224-213-4648, and my email is towisdominsurance.com. Our questionnaire is online. Definitely reach out, and we’ll send anyone the questionnaire, jump on a quick introductory call, learn more about you and your business, and assist in getting competitive quotes and comprehensive coverage.

Host: Alright, guys. Thank you so much for watching, and we’ll see you on the next one. [Music]

FAQs

What sets Wisdom Insurance apart from other agencies?

Wisdom Insurance’s extensive experience in the industry allows them to properly classify risks and vehicles, offering competitive and comprehensive quotes efficiently.

How can misclassification affect insurance costs?

Misclassification can lead to coverage gaps and denied claims, costing clients tens of thousands. Proper classification can save clients significant amounts, like $11,000 annually.

What insurance coverages are essential for the portable sanitation industry?

Key coverages include general liability, commercial auto, workers comp, pollution liability, inland marine, and cyber liability, ensuring comprehensive protection.

How can telematics help reduce insurance rates?

Telematics programs, including dash cams and fleet monitoring, can qualify businesses for discounts, reduce at-fault incidents, and enhance overall safety practices.

What should businesses prepare for an insurance quote?

Businesses should prepare a completed questionnaire covering vehicle lists, driver’s lists, EIN, equipment, payroll, and expected sales to receive competitive quotes.