Operations

Getting the Lowest Premium

Posted on March 1, 2001 by LCT Staff - Also by this author

Let’s face it; we are all looking for ways to lower our insurance premiums. Due to the nature of the limousine business, lower premiums are a much sought after, but often unattainable, commodity. However, with a little guidance there are ways in which operators can help control and lower the amount paid for premiums.

In order to find ways that you can best lower your premium, you should take a look at your overall business, and divide it into three categories: Equipment, employees and risk management, according to Bob Crescenzo, vice president, marketing/loss control for Lancer Insurance.

In regards to vehicle insurance, Crescenzo explains that insurance companies don’t look at just the vehicle. They take into account the entire business. He adds that what equipment you have, who you got it from and how you maintain it are very critical to the premium. “The way to lower your premium is, in some ways, to understand what your premium means,” Crescenzo says.

As with regular car insurance, the amount of liability you have on the vehicle greatly affects your overall premium. “You may have, percentage-wise, a lower premium if you have more insurance,” Crescenzo says. “For example, say there is a company that has 12 limousines, each with a million dollars worth of coverage. They’re in an area of the country which is semi-urban or urban, the fleet is on average three years old and drivers tend to be there less than six months — that’s a high premium,” he says.

Crescenzo adds, “Another company in the same area that maybe has newer vehicles, drivers are there two to four years on average, may carry higher amounts of insurance. They may be buying more, but the premium, dollar-wise, is less because there’s less risk to the insurance company.”

He explains that the second company also may be holding some of their own risk in terms of... For more on this story, check out the March issue of LCT.

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