Getting Covered — You Are More in Control of Your Insurance Rates Than You Think

Jim A. Luff
Posted on November 1, 2007

With insurance being one of the three biggest operating expenses in the ground transportation business, obtaining the lowest rate with the best coverage is a top priority for operators. This requires you to show the insurance company why your rates should be lower. And it can be easier than you think to get the rates your company deserves.


Obviously insurance companies hope that they will never have to pay out on a claim. With this in mind, the decision as to who the insurance company will insure and at what premium is decided by many different factors that can push premiums higher or reduce premiums for your efforts. The only way an insurance company is going to know about your operations is if you put it smack in its face when obtaining quotes.

This begins with the application process. During this process, you will complete a written application detailing various aspects of your business including your annual sales volume, what types of vehicles you operate, the operating radius of service from your office, how you hire and train chauffeurs as well as the type of work you perform. While these are key elements, the insurance company may also inquire about your financial ability to operate, according to Dennis Easley, loss prevention specialist for Praetorian Financial Group. In some cases, you may be asked to provide actual financial records says Mark Freeark of Transportation Insurance Brokers (TIB). Freeark represents such companies as Northland, Praetorian, and Lancer Insurance, which specialize in the limousine industry insurance market. He adds that usually such requests are made to very large operators and not the average-size limousine company.

During the application process, a loss prevention specialist or safety engineer may perform a pre-risk evaluation of your operations. This evaluation can also have a positive or negative effect on the premiums based on what is presented during the inspection. Always encourage an inspection, as it affords you face-to-face time with an actual human that can observe and document positive aspects of your business. In some cases, this inspection may occur after the policy is issued and be followed with a request for improvement in certain operations to reduce the risk and exposure the insurance company has for a potential claim.

Freeark says that many operators falsely believe it is best to hide as much as possible and tell the insurance company as little as possible in hopes of getting the best rate. “Unfortunately, hiding information can be detrimental on many levels when a claim is presented,” says Freeark. Insurance companies may deny claims when certain operating aspects may have been hidden in the application process. This can include failing to inform the insurance company that drivers regularly take cars home either for storage or call out purposes. If you have stated that you keep your cars in a gated facility when not in use but really send the cars home with drivers and one is vandalized at the driver’s residence, the claim may not be paid if it is discovered during the investigation that this is a standard practice.


While the insurance company is insuring your vehicles, obviously its first and biggest concern is the people operating your vehicles, who are entrusted to serve the passengers who will most certainly sue if given the opportunity or a reason.

As a result, the underwriter will first look at your current drivers as well as your procedures for hiring new drivers. Proper hiring can reduce risks. Hiring chauffeurs with clean driving records, previous commercial driving experience and knowledge of the geographic areas you serve can help reduce your chances of an accident. Always make sure to screen drivers through an actual drive test to evaluate driving habits and vehicle handling. Be sure to document this “check ride” with the date and time it was performed and by whom.

According to Freeark, a major concern at the time of hiring is whether candidates are required to complete a pre-employment drug and alcohol screening. Insurance companies expect and demand that this be standard practice.

As an additional precaution to make sure a driver with a history of substance abuse does not go from job to job, DOT Part 49 CFR 382.413 requires that a “Consent from Previous Employer” form be sent to the candidate’s previous employers to determine if the driver has previously been drug and alcohol screened and to obtain the results of such tests.

Defensive driving programs and ongoing training and evaluations can also lower the risk of a claim and will be viewed favorably by the underwriter. Copies of certificates from driving programs should be kept in the chauffeur’s file, but sample copies should be submitted with the application or shown to the loss prevention specialist during the inspection.

One area to include in your training program is what steps to take if an accident does occur. The information collected at the scene of an accident can be invaluable in the determination of fault.

Share with the insurance company your written training programs that instruct your chauffeur what to do if involved in an accident. Livery vehicles are infrequently involved in major accidents so chances are the chauffeur will be able to take charge of the accident scene, his vehicle, and his passengers with advance training.

By having appropriate training, the chauffeur will be able to demonstrate calmness and carry out a plan to manage the accident scene until law enforcement arrives and to document and obtain pertinent information. Be sure to include in this plan the designation of a company official who will notify the insurance company as soon as possible upon being involved in any type of accident, regardless of how minor it may seem at the time.

In some areas, the police will not respond if the damage is minor, such as a bumper scrape. Officers may arrive at the scene and advise the involved drivers to exchange insurance information and end his involvement. It is perfectly fine to do this but the chauffeur or a company manager should complete an internal company investigation and documentation of the incident.


For accidents training chauffeurs on how to handle an accident scene is important, but management is responsible for providing the tools to complete the task. Every vehicle should contain an accident kit. The kit should contain a diagram sheet of various road and intersection configurations, a disposable camera, and witness statement cards, including a set for bystanders and another set for passengers in your vehicle.

There should also be an accident report that the chauffeur completes stating his version of the accident, the time, lighting conditions, the location, other people involved, vehicle license plates, insurance information, investigating police officer’s name and badge number, an accident case number if available, and anything else relative to the accident.

Don’t forget to note the weather conditions if rain, fog, or snow contributed to the accident. Another aspect that may affect vision is the position of the sun at the time the accident occurred, as the sun can temporarily blind someone driving east in the early morning or west as the sun is setting.


Absolutely every single accident should be documented. Sometimes people claim injuries days after a minor accident. Having a written accident report describing the damage to both vehicles, the direction of travel action, and estimated speed of the other vehicle can help insurance companies settle matters. Chauffeurs should be trained to refrain from making any statements or comments to other parties but instead concentrate on obtaining information. Unless a chauffeur is precise in his speed at the time of impact, he should state he does not know, as it is a true statement and stating estimates could become harmful later. Use the information learned in the accident investigation to strengthen your training program.


Safety training should be an ongoing process. If the message is spread daily and is a major part of your operation, drivers will strive to achieve high levels of safety. One part of determining your training program’s effectiveness is by completing evaluations on an annual basis and employing “mystery riders” to make certain that chauffeurs are delivering service to your expectations as well as operating your vehicles in a safe and courteous manner.

Monthly or quarterly safety meetings are seen as a proactive measure to keep safety at the forefront of your company. Plan the topic of safety meetings on an annual basis and invite guest speakers to share their expertise in certain areas. Make sure to document the date safety meetings were held, what the topic was, who presented it, and who was in attendance.

As part of your ongoing safety efforts, random drug tests should be performed on a monthly basis and license information should be reviewed annually. All drivers should be enrolled in a Pull Notice program with your state Motor Vehicle Department so that any violation or accident is reported to you immediately, regardless of whether the incident occurred in a company vehicle or a personal vehicle according to Freeark. Such documents should be retained in the driver’s personnel file. A copy of a commercial driver’s medical examination card is required to be kept in the file as well.

Medical examination cards expire two years after the date of the exam and should be checked regularly for expiration dates. An even better method is to place the expiration date in a calendar program such as Microsoft Outlook that prompts you two weeks before the expiration to notify the driver his medical card is about to expire. Operators of vehicles requiring a CDL cannot legally drive once the card expires.


The vehicles being insured are certainly another big factor in determining the cost of insurance. Obviously, the larger the vehicle, the more people it carries and of course this means a larger exposure or claim for injuries in an accident. Most states require operators of large vehicles to carry $5 million of liability insurance for this reason.

Vehicle safety begins with proper maintenance and repairs performed by qualified mechanics. The insurance company may ask who performs service and what type of maintenance schedules you have. All commercial drivers are required to inspect their vehicles and document the inspection on a daily basis or before operating any vehicle. Copies of daily inspections must be maintained for inspection by state and federal inspectors. Provide sample copies of inspection reports to the insurance company.

With the technology advances in recent years, operators can add devices that will help lower their insurance premiums. One such device is DriveCam. DriveCam constantly records while the vehicle is in motion. Certain trigger points can cause the camera to capture an “incident” for review. Triggers can include turning too fast, accelerating too fast, braking too hard, or hitting objects such as speed bumps too abruptly. When an incident is captured, it displays the moments leading up to the incident, the moment of the trigger cause, and the moments following the trigger. This technology can be used to eliminate rogue drivers who abuse your vehicle and drive erratically, as the images cannot be erased except by authorized personnel.

DriveCam can also be used as a training tool to review incidents captured with individual drivers or used in a safety meeting. Of course, the biggest benefit can come from capturing an accident. The camera can clearly display who did what during an accident. Using the rear facing image, the camera can capture the trauma incurred by any passengers on board.

The entire incident captured on camera can significantly reduce the amount of damages paid out by the insurance company with strong visual support. For this reason, many insurance companies offer lower premiums to operators who use the system. Having a GPS system onboard that reports the vehicle location, speed, direction and other information can also provide vital information if the vehicle is stolen. Additionally, GPS systems that have speed notification systems are also a plus. With these systems, alerts are sent via text message to management when a vehicle exceeds a certain speed determined by the company. Geo-fencing can alert management when a vehicle has left a certain operating area set by management.

Another device used solely for tracking a stolen vehicle is a Lo-Jack system. When a vehicle is reported stolen, the Lo-Jack system begins sending out signals that are received by many police cars throughout the nation equipped with Lo-Jack detectors. The detectors employ directional indicators to lead an officer to the stolen vehicle for recovery.


So many people confuse broker/agents with the actual insurance company. Very few insurance companies sell their services directly to the customer. Instead, they rely on an army of independent brokers or agents to sell their products for them. Agents may or may not work for a broker.

A broker usually runs an office housing several agents. The agents may specialize in such areas as workers’ comp, garage-keepers, or transportation, and may use the strengths of the various in-house agents to develop comprehensive packages to protect all aspects of a business using their unique and specialized knowledge.

Your agent is your front line of communication with the insurance company. He is the one who will paint the picture of your company for you. He will submit your information on your behalf to various insurance carriers that he represents. He will then present their information to you for consideration. He is very much the “middle man.” Because of this crucial role in representing you, his experience and knowledge of the industry and particularly your operations is vital. This is one reason to shop for an agency and agent that knows about the various filings that are required of operators with airports, public utilities commissions, and other government agencies.

Frequently, clients and companies that farm work to you will ask for a Certificate of Insurance. This is a very common request and your agent should know exactly how to prepare it and be able to do so in a timely manner. Here is a prime example of why you should have a knowledgeable agent — Los Angeles International Airport requires insurance documents to have a “wet signature.” That means the pen transfers the signature to the paper as opposed to a rubber stamp or “image signature,” which is posted electronically. Submitting a document without the “wet signature” can add weeks to processing time and in some cases restrict you from doing business at the airport, causing you to lose revenue and possibly even clients.


  • Annual sales volume
  • Types of vehicles you operate 
  • Radius of service
  • Hiring and training
  • Type of work you perform
  • Financial ability to operate


  • Clean driving record
  • Previous commercial driving experience
  • Obtain consent from previous employer form (DOT)
  • Knowledge of the geographic area served
  • Successful check ride with management
  • Pre-employment drug & alcohol testing


  • Date/time/location
  • Direction of travel/estimated speeds
  • Driver’s license information from all drivers
  • Vehicle license plate and VIN
  • Current lighting/weather conditions
  • Position of the sun if relevant
  • Chauffeur’s statement about what happened 
  • Description of damage to each vehicle
  • All witnesses’ names/addresses/phone numbers • All insurance company names and policy numbers
  • Officer’s name/agency/address/phone/badge number
  • Police agency case number
  • Photos of vehicles and surrounding area


  • A diagram sheet of various road and intersection configurations
  • disposable camera
  • accident report to write details
  • fire extinguisher
  • witness statement cards for passengers and for bystanders
  • road flares/triangle reflectors
  • flashlight
  • first aid kit


If you should have the misfortune of being in an accident with passengers, you will have to implement a plan to deal with your passengers’ continued journey to their destination. A chauffeur at Two Step Limousines in Littleton, Colo., was recently involved in an injury accident. Some patients were transported from the scene by ambulance, according to owner Barbara Curtis, while others were left behind. Curtis immediately dispatched another vehicle to transport the passengers to the hospital to be reunited with the injured passengers. While this is obviously a bad situation for your company, it is a bad situation for your passenger, who may be on their way to catch a flight.

Be sure to remember immediately to call in another driver upon learning of an accident. A driver involved in an accident should be relieved of duty immediately for safety reasons. Additionally, federal and state laws may require mandatory drug testing of drivers holding a commercial license. As a matter of policy, companies should have a mandatory drug testing policy following any accident, according to Freeark.


  • Use qualified mechanics and service personnel
  • Have a regular maintenance schedule
  • Complete daily vehicle inspections
  • Install DriveCam
  • Install GPS or Lo-Jack systems


Agents such as Freeark know about these matters and can help you. You can help them represent you better by fully informing them of the type of jobs you do and all aspects of your business. Insurance agents who are members of state limousine associations and the NLA generally attend state and local meetings to stay abreast of the industry and have valuable face time with their clients.

Industry trade shows will usually have no less than 25 booths selling insurance services. Ask the insurance companies what safety programs or premiums they have to offer you. Some provide disposable cameras, training videos, and other tools to help your business.

Another good way to locate a reputable and knowledgeable agent is to ask business associates such as subcontracting companies or operators seated with you at association meetings. Be sure to ask if they have ever had any claims and how the claims were processed. Was it timely? Was it fair? How did it affect their rates in the coming year? These are all things you should learn about your insurance company before a claim arises. While all of these ideas, plans, and procedures can lower your premiums, it will happen only if the insurance carrier and your agent know about them, so be sure to share it. Once you have found an agent and carrier that you work well with, make it a long-term relationship.

According to Freeark, an insurance company is less likely to raise your rates or refuse to insure you if you have one accident in five years with them. Freeark says, “If you only have a one year relationship because you move your policy every year to the cheapest insurance company, you will find they will probably raise your rates or cancel you after an accident.”

Related Topics: accident reporting, chauffeur training, choosing coverage, drivecam, emergency preparedness, hiring chauffeurs

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