Truck insurance is a very volatile and loss sensitive exposure, unlike other types of insurance.
Due to this fact you, as a retail agent representing a trucking customer, need to be aligned with a general agent that is experienced, knowledgeable, and honest. One who can guide you and your trucking customer in a direction that will provide him an equitable program over the long haul as opposed to a seemingly large savings for one year. A quality General Agent will be able to gauge your status of risk on short notice and give you an intelligent response to current market conditions.
Your fleet customers are going to often be guided by price, as it is quite frustrating for all of us to pay too much for a product. However in the case of trucking insurance there is such a thing as paying too little for your insurance, and I will attempt to explain the consequences of paying too little for your trucking insurance.
The owner of a fleet of trucks could be paying what is market rate or slightly above market rate and at renewal, due to a soft market, receive reductions anywhere from 5% to 35%. Their first inclination is to go for the 35% reduction, but if that puts you at a pricing level that doesn't support your past losses, then you are heading into a spiral that could eventually label you as a distressed risk, when actually you are a good risk that is simply underpriced.
Let me describe a distressed risk by creating an image of an individual walking into a used car lot with his license plates tucked under his arm.
Loss rating of your past losses, on a fleet of trucks, is customary and if your loss history over the past 4 years does not support the premium level that you are currently paying, then the money you saved on the past years renewal might come back in the form of a rate increase the next year that could seem cost prohibitive over the long run. You may have cost the new insurance company $0 in losses for the year that you were with them, but likely if they were buying your business with a low ball rate, then they were buying others at the same time and will be at the mercy of their re insurers to either get huge increases, or be out of the business all together.
I have seen this scenario take place a few times over the years, and due to there being more than one insurance company engaging in this form of irresponsible underwriting, it often times causes the market to firm overnight. A distressed risk going into a hard market can cause a casualty like a perfect storm for the trucker.
Avoid having your fleet trucking client experience being labeled as a distressed risk: