Is something going on in the insurance market for independents?

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Updated Mar 14, 2019
Insurance That Fits

Clearly, the answer to that question is yes and will no doubt be yes to the end of time. But let me explain a little better what I mean on this particular day. I got a call from Tennessee-based independent Wayne VanHooser, whom regular readers may recall from some past coverage. When his insurance came up for renewal recently (something I imagine many of you may well go through this time of year), he got a pretty big surprise. “Basically I’m getting put out of business,” the 71-year-old says, after more than four decades trucking. His insurer, National Casualty, basically told him they wouldn’t renew because he was uncoverable.

VanHooser, who runs in an e-log-exempt older Peterbilt, has had a run of bad luck the last few years (one speeding ticket, too) with accidents — the most recent was in a personal vehicle when he was hit by a distracted driver who ran a stop sign in Monteagle, near where he lives. Her fault, not his. Another nearby incident he was in his truck motoring up hill toward the house when a pickup driver in a parking lot “didn’t get it into car and came rolling backward” down a hill, into the road, slipping the back of the trailer, among other incidents farther back in time that were not his fault.

None of those incidents claimed toward his motor carrier liability insurance, but an incident in 2016 did when he collided with a four-wheeler near his front fenders on an interstate highway as he was changing lanes and the auto driver then came into that same lane from the other direction. “Georgia blamed me,” he says.

When he started with National Casualty five or six years ago, he says, following a long history as an independent, he paid about $5,400 annually, then it crept up to “$5,700″ in a subsequent year, then $6,600,” then ultimately hitting $7,200 in the most recent year, after the one loss claim he’s had. Then — no dice. Attempting to shop around for new coverage, the “cheapest I’ve found is $16,400 for one truck — Progressive told me they would insure me for $27,000” and some change. As he quite rightly notes, a “one-man operation can’t do that.”

And he’s not the only owner-op seeing some out-of-hand behavior from insurers in recent times. If you heard last week’s Overdrive Radio podcast, you heard a little about the dramatic hikes Andre Jackson’s insurers sent his way when his young Midnight Xpress two-truck fleet made a move to expand and add drivers, difficult to do for a carrier in business less than a couple years. VanHooser points to a friend in Wisconsin with eight trucks running who told him his own insurer came back with a renewal at $300,000 annually. That friend too said, “I’m out of business,” VanHooser notes. “My cousin’s got five trucks – he’s got a few drivers who’ve really raked him over the coals, and insurance quoted him at $100,000 this year” before “he finally got it down to $70,000.”

Much has been made in the insurance business press about the “loss leader” that is commercial auto insurance, the category that includes motor carrier liability policies, at least for non-specialty insurers. “Price increases … are the norm” for providers in the space generally, one insurer’s thoughts are summed up in a story in “Insurance Journal” magazine from around this time last year that explores the factors insurance companies have faced in recent times that are driving efforts to raise rates where they can — with some insurance carriers getting out of the commercial-auto business entirely.

As for getting out of businesses, VanHooser says he’s contemplating a few options, one of which includes a trip to the state insurance commission in Nashville to find out just what standards might be in place and needing enforcement to prevent drastic rate hikes and denial of coverage. And “I’ve got a buddy of mine who’s thinking about taking over my authority and maybe I’ll cool my heels till when I do my MVR” and it looks better than it does now. He’s also had some associates speculate that, “though [insurance companies] will never tell you this, they’re probably using your age against you,” as VanHooser puts it.

Meantime, what have you seen for liability insurance increases, if any, in the last couple years?

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