Thursday, September 22, 2011
Revisiting… Truck Insurance
Having the right insurance policy with the right coverage is one of (if not) the most important factor for any trucking company.
The most common terms you will hear in coverage are the following (along with basic definitions):
- Automotive Liability Insurance: coverage if an insured is legally liable for bodily injury or property damage caused by an automobile.
- Physical Damage Insurance: coverage of an insured’s vehicle if it is damaged due to various sources, for example: fire.
- Cargo Insurance: coverage for cargo as it is transported to another location.
All the jargon and legal language that comes along with these policies, can be complicated and difficult to fully understand, and many companies pay their monthly premium without fully understanding what their insurance covers them for and what it does not. For any of these policies, the “exclusions” portion is one of the most important sections, since this will let you know what your policy does not cover.
So, now, let’s look at some examples of exclusions in insurance policies:
Theft or a tractor/trailer from an unsecured, non-gated, and/or unmonitored area.
Lack of evidence of a break in to a tractor/trailer.
Reefer breakdown on trailers that are more than 10 years old – this can be regardless of if your coverage includes reefer breakdown – if the trailer is 10 or more years old, the insurance company will not provide coverage.
Failure to maintain proper temperature in the trailer – unless the failure is caused by or results from fire, lightning, explosions, collision, overturn, flood (as defined as the rising of any “natural” body of water).
Common insurance statements, and what they mean:
Whatever the exclusions or conditions of the insurance policy that a company signs up for, most will have common language. Here are some examples, decoded:
- “The Insured warrants that the refrigeration equipment will be maintained at all times in accordance with the manufacturers specifications” – what this means is that the carrier company must make sure that the trailer and all its refrigeration equipment will be routinely inspected, maintained, and repaired if necessary, on a schedule that is advised by the maker of the trailer.
- “The Insured warrants that the refrigeration equipment will be fully inspected at least every three months by you or a facility approved by the manufacturers. Records of these inspections must be maintained and be made available for inspection” – what this means is that a carrier company must have legitimate paperwork for maintenance and reports, must keep ALL paperwork related to maintenance and repairs, so that they can be provided to the insurance company in the event of a claim. Keep these documents, and most of all, keep them in a safe place!
Remember, knowledge is king! So, be in the know and a king of the road!!!
Are you unsure of what your policy covers, and what it excludes? Feel free to send it to us – we can review the policy and advise accordingly. It is in everyone’s best interest that we all understand what we are protected and covered for!
Do you have any specific experiences in dealing with insurance policies and exclusions? Please share!