The Hidden Key to Financial Stability in the Trucking Industry
In an industry where profit margins are razor-thin and operational costs are sky-high, one crucial factor can make or break a company’s financial stability: insurance cost and quality. As the market continues to shift, insurance rates have an outsized impact on carriers, making it a critical component of their business strategy.
The Underserved Trucking Insurance Market
The trucking insurance market remains underserved, driving up rates and limiting coverage options for carriers. This lack of competition only exacerbates the problem, making it difficult for carriers to find affordable and reliable insurance options. To combat this, Transportation Insurance Experts (TIE) recently launched an admitted truck insurance program designed to increase competition and provide more options for carriers.
The Importance of Insurance Ratings
Insurance ratings, typically provided by Demotech or AM Best, indicate an insurance company’s likelihood of remaining solvent and paying out claims. In a recent episode of Loaded and Rolling, industry experts discussed the intricacies of insurance ratings and why they matter more than ever. According to J.W. Taylor, Managing Partner of Taylor Nelson PL, “Rating agencies are important because shippers and brokers want their claims paid.”
Demystifying Insurance Ratings
Despite their importance, many industry players have a limited understanding of insurance ratings. This lack of knowledge can lead to carriers unknowingly choosing subpar insurance products and shippers and brokers unnecessarily limiting their carrier partnership options. For instance, some contracts require carriers to have insurance rated by AM Best, preventing them from working with carriers carrying coverage rated by Demotech.
Breaking Down Barriers
Demotech, an established and effective rating company, has been providing ratings for nearly 40 years. Wider acceptance of Demotech-rated insurance products can increase capacity and create more competition in the undersaturated insurance environment. “Demotech-rated carriers are imperative right now,” said Tyler Christensen, Managing Partner of TIE.
A Commitment to Creating Better Insurance Options
At the end of the day, TIE and Demotech are committed to creating a wider pool of top-notch insurance options, making it possible for more trucking companies to get desirable coverage and stay in business. By increasing competition and providing more options, carriers can focus on what matters most – keeping their trucks on the road and their businesses thriving.
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