The insurance industry can seem like a large and complicated market, with many different types of policy options for chauffeured transportation operators. The requirements for insurance vary among states, with some mandating up to $5 million worth of liability coverage on each vehicle and some less. Different types of vehicles, such as SUVs, stretch limousines, and buses, require different minimums as well, and can vary depending on how many passengers they accommodate.
First, every limo operator should find out exactly what type of coverage is required for each vehicle, and then check with insurance specialists to get a policy that works best for their fleets. The insurance companies that supply the industry have underwriters who assess every detail of an operation so they can calculate the risk involved with covering a limo company.
The underwriters look at factors such as business management, fleet size, company location, how people are hired and fired, types of safety training in place, and loss ratio, which is a calculation on the amount of claims over a one-year period. They score companies on these variables to determine premium rates.
There are so many things to consider for fleet insurance that it can be overwhelming for operators to scrutinize every detail. However, operators can take some simple steps to make their companies appeal to underwriters and lower premium payments.
Insurance brokers can help operators by focusing them on the criteria that underwriters seek and practices that lead to lower premiums. For example, a written safety training program mandatory for all employees and chauffeurs would rate an operation as less of a risk. Insurance specialists also can recommend types of vehicles to keep in the fleet, and highlight specific makes and models that retain lower risk and minimize premiums.
Operators should note that insurance premiums are prone to hard and soft market cycles beyond their control, which can result in periods of higher and lower rates. Rates fall when the market is saturated with providers while claims are low, creating a surplus of available money. Regardless of cyclical circumstances, operators can save on premiums with education, internal adjustments and improvements, and guidance from knowledgeable insurance specialists.
LCT highlights three insurance providers below who are available to recommend and arrange fleet policies:
[NOTE TO READERS: The companies featured in this section are advertisers in the November issue].
Transcap Insurance and the Stop Program
Las Vegas, Nev.
Transcap Insurance, owned by Lee Martinez, an expert in insuring limousine companies, has released a special safety and training program called STOP (Safety, Training, Operators, Program) that is an online training curriculum for employees and chauffeurs. Martinez offers the program because, by having his clients take it, he can document that they follow strong safety practices.
The customizable, online courses can be accessed anywhere, anytime by limo operators and their employees. Groups of employees can take specific safety based modules designed for them. Operators can opt to place their logos and brands on the testing portals so chauffeurs and employees identify it as an internal safety training program, which can include company-specific policies and procedures in the lesson plans.
The safety training reviews such points as how to do proper maintenance checks on a vehicle, how to record these checks in documents, and how to report accidents. The limo safety portal has 18 full lessons covering everything from bad weather and night driving to wheelchair securement and bicycle accident prevention. Overall, the five-to seven-minute lessons span the range of troubles and challenges that can arise while chauffeuring clients.
It’s easy for chauffeurs to register. Once the $9.99 set-up fee is paid, chauffeurs create a username and login. From there all progress is charted and recorded. Every month, STOP adds new modules with new information and training for chauffeurs.
Long Beach, N.Y.
Lancer is one of the largest insurance companies serving the limousine industry with many programs to help educate operators on ways to minimize costs while appearing low risk to underwriters. Vice president Matthew Mushorn, a veteran of the limousine insurance business, knows the nuances of liability in chauffeured transportation and the many safety factors come into play.
The limousine business will occasionally encounter high-profile accidents that capture media attention and generate scrutiny on various aspects of accident coverage. Lancer offers detailed packages that cover important aspects of personal injury coverage and property damages. Lancer can accommodate up to $5 million combined in bodily injury and property damage coverage. It also offers liability coverage for uninsured motorists, personal injury protection and medical payments.
Lancer carries physical damage coverage that will help get a fleet vehicle back on the road soon after an accident. Collision coverage pays repairs and replacement part costs, and the specified perils plan pays for damages vehicles can sustain from fire, vandalism and other circumstances.
Deductibles are an important bottom-line factor when choosing insurance policies. Lancer stays flexible to match the needs of each customer, offering deductibles in different amounts. Lancer also makes available a number of education materials and program services to help operators keep their premiums as low as possible. Those include chauffeur training video packages and incentive programs for electronic on-board recorder units that can identify risky driving behaviors that lead to accidents.
Protective Insurance consists of specialists with backgrounds in truck fleets, school buses and motorcoaches, as well as taxi, limo, and shuttle services. The company created a specialty in custom loss prevention strategies that have earned them a 95%-plus customer retention ratio.
Protective Insurance provides coverage to many large limousine companies, such as Avanti Transportation in Houston, owned by Erich Reindl, and Custom Coach and Limousine of Portland, Maine, operated by Gregg Isherwood. It also provides coverage to charter and tour bus services.
Controlling loss is a crucial aspect to getting insurance rates down to reasonable levels. Protective Insurance works closely with underwriters and claims departments to limit the number of accidents and damages. It’s been proven that when companies use successful loss prevention programs, they can significantly decrease the number of claims. To get operators started, Protective Insurance offers online guides to documented programs that can be shown to underwriters, and that help lower premiums.
These programs not only push down costs, but enable employees and chauffeurs to improve performance and work more efficiently. Stacy Renz, vice president of marketing at Protective Insurance, knows the best way to reduce claims is understanding exposures and loss trends.
By indentifying loss leaders and analyzing root causes, operators can develop safety programs and policies that meet challenges. Protective Insurance offers employee morale and return-to-work wellness programs, and teaches how to create secure, stable and communal work environments — all crucial to a company’s performance.