
Chauffeur Fired After Chat With Raiders Owner
Was the reaction too harsh? Or an important part of what is supposed to set luxury transportation providers apart from TNC drivers?
![]() |
![]() |
That scenario is especially relevant for operators who run buses and motorcoaches — a growing segment of the limousine industry.
“I get worried when a company complains about insurance,” says Tom Holden, general manager, Rose Chauffeured Transportation of Charlotte, N.C. “When you look them up on the Federal Motor Coach Safety Administration (FMCSA) website (www.fmcsa.dot.gov) you see how many out-of-service write ups they have and why. There are companies running up and down the highway that rate 98%. That means they are 98% worse than everyone else. They should be shut down, but sometimes FMCSA hands are tied.”
Rates depend on loss runs and the insurance provider, Holden says. “What many operators have come to realize is that insurers are looking deep into your driver history and age and medical condition. It’s hard to insure a driver who has less than one year DOT medical card. Also, they are watching your FMCSA ratings, drivers and vehicles.”
Why Are Rates Increasing?
“In transportation, the two main drivers of rates are the frequency and severity of vehicular accidents,” says Tim Delaney, CEO of Lancer Insurance. “The industry frequency of losses can be influenced by things like miles driven, the state of infrastructure, overall driver quality, and even the weather.”
Delaney explains that the severity of losses, or how much the average loss costs, varies by jurisdiction but is primarily driven by rising medical and vehicle costs, and larger jury awards in lawsuits spurred by plaintiff attorneys and media coverage.
“The severity of loss can be significantly larger for vehicles carrying 15 or more passengers,” he says.
Richard Ackerman, regional sales producer for P.A. Post Agency LLC, says, “Generally speaking, there are four indicators that conspire to put upward pressure on property and casualty rates. These consist of a steady rise in casualty insurance rates since pre 9/11 lows, loss cost trends that continue to rise, persistent underwriting losses, and the lack of investment income returns. These influences are otherwise tied to the macroeconomic conditions found in the U.S. and rarely, if ever, are within the control of buyers and sellers of commercial insurance.”
Amy Perkins, marketing manager for insurer Western Experts in Transportation, says one of the main causes for higher rates, or insurers not underwriting motorcoach business, is that the “$5 million insurance limit is not adequate in a bus accident.”
“The market is hard for operators because many insurers have gotten out of the motorcoach side of the business, so those left are really picky on accounts and don’t have to fight for them anymore; operators come to them,” she says.
Major motorcoach accidents that get a lot of media attention have a “ripple effect” throughout the industry, Perkins adds. “There are more claims and lawsuits today getting media attention, and that scares insurers who see reports of a huge claim loss. That will have insurers look into every aspect of accounts to see if operators are doing business the right way to make sure a big loss doesn’t happen to them.”
Qualifying For Best Rates And Policies
“To qualify for the best rates, operators not only need to show a clean loss history, but need to show that history is manifested through a culture of safety,” Delaney stresses. “They need to demonstrate management expertise and regulatory compliance in things like driver hiring and training, vehicle maintenance, and recordkeeping. Increasingly, the deployment of fleet management technology and/or event video recorders shows an operator is serious about managing and protecting their business.”
Delaney points out that for companies that historically operate smaller vehicles (14 or fewer passengers), they may not qualify right away for the best rates on larger vehicles (that require larger limits) “until they can demonstrate over time a mastery of the increased administration, documentation, and management effort required when operating higher occupancy vehicles.”
Party buses and motorcoaches present unique exposures unlike any other forms of passenger transportation (except airlines and cruise lines), Ackerman says. “The commonalities are that both can have dozens of passengers on any one trip (or trips) who may be standing up, moving around, using a lavatory, and climbing a stairwell. Notwithstanding injuries sustained in an accident, most claims occur during the loading and unloading of passengers.”
Liabilities To Prepare For
Party buses present many challenges for operators and their insurers, Delaney says. “The most obvious is the use of alcohol by the passengers. Intoxication increases the likelihood of being injured in a vehicle, and an operator’s duty to those passengers while they are inside and outside the vehicle. Claims involving alcohol can be harder for the operator to defend when the operator permitted the use of alcohol on the vehicle.”
Party buses often have customized seating and electronic systems which are difficult to assess for safety compared to standard ones, he says. “Party trips often have vague itineraries that can test a driver’s navigational skills and add to the fatigue risk. Overall, the insurance industry has had unfavorable experience with these types of vehicles and many insurers look to avoid them.”
For traditional size motorcoaches, operators should prepare to bear a substantially higher liability risk as these larger vehicles carry more people. “However, most operators also underestimate the management time and resources needed to confront the additional regulatory requirements associated with operating such vehicles,” Delaney says. “Any operator looking to cross over into higher capacity vehicles should make sure their insurance company has experience handling catastrophic claims with multiple injuries and can assist with the regulatory and compliance requirements.”
To minimize potential liabilities with party buses and motorcoaches, operators should consider a set of policies and procedures related to passenger safety, unruly passengers, and emergency contacts, Ackerman advises. “The U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) has an endless stream of information on these very topics; inclusive of a Motorcoach Safety Action Plan at everyone’s disposal. An operator who can illustrate these sound practices to its insurance company may very well reap the benefits of the efforts.”
Technology Matters
Every operator can find plenty of information on vehicle and in-house safety procedures and vehicle technology, Ackerman says. “Research and invest where and when you can. It’s almost getting to the point where if you don’t take advantage of this technology, you are becoming the exception instead of the norm. Developing and committing to an on-going/continuous driver safety program is paramount. Remember, if operators overall recognize the difficulties associated with today’s driver pool selection, then rest assured insurance companies know it too. In a nutshell: Safety, ongoing driver training, and more safety. The goal should be to strive for (and develop) a zero tolerance accident policy.”
Related Topics: buses, charter and tour operators, fleet insurance, How To, insurance rates, Lancer Insurance, motorcoaches, Rose Chauffeured Transportation, Safety, Safety & Insurance
Was the reaction too harsh? Or an important part of what is supposed to set luxury transportation providers apart from TNC drivers?
The National Transportation Safety Board says all aspects of the accident still remain under investigation.
FEB. LCT: Create a consistent message to dangle your brand and service in front of current and potential clients.
FEB. LCT: Corporate Coach Charter started three decades ago running buses with an approach full of potential.
FEB. LCT: Limo University Founder Bill Faeth spoke to Angela Layton about what it takes for operators to attract her attention.
FEB. LCT: Dee Patel, general manager of the only five-diamond hotel in Tennessee, shared insider information on how to score business with similar properties.
An integration between GRiDD Technologies' GNet and Limo Anywhere's DANet expands the reach and pool of luxury fleet vehicles.
LCT Publisher Sara Eastwood-Richardson and Dav El/BostonCoach CEO and NLA leader Scott Solombrino gave a state of the industry presentation Jan. 21, 2019 at Limo University's LABLive conference in Nashville, Tenn.
If you’re running luxury transportation, you need to develop more client segments and up your service game.
Uber and Lyft sent statements saying they are working with the aviation department on a fix.
A New York Department of Transportation official says a ban on stretches and the power to seize plates will help DOT enforcement.
Coaches can rightly position themselves as an efficient alternative to flying or driving yourself.
eNews Exclusive: Natalie Brown has grown significantly over the years and has proudly served her company by enhancing its business relationships.
Jon Taffer and Michael Dominguez are ready to help you up your customer service game.
FEB. LCT: This sector provides an opportunity to increase your customer base as well as the bottom line profit.
The world's No. 1 online marketplace and trader for professional chauffeured and chartered vehicles, including all types of motorcoaches, buses, vans, stretch limousines, sedans, SUVs, exotics, and classics. New and used vehicles are available from sellers across the nation.
The best online networker to find quality affiliates worldwide and market your company.
Click on any state to see the latest industry news and events in that region.
Get the latest news and most popular articles from LCT delivered straight to your inbox.
Current newsletters: