If you're an expediting owner-operator, one of the wisest purchases you can make for yourself and your family is workers' compensation (WC) or especially, Occupational Accident Insurance.
***image1***Insurance – you’ve got to have it and even if it weren’t mandated by law, it’s a good idea besides.
But, even though it’s an expense that no trucker or expediter wants to deal with, it deserves a second and even a third look from time to time to determine if: (1) You have the proper coverage and, (2) You’re not paying too much for what you have.
Trucking and cargo insurance
There’s good news for expediters here. The insurance that many of the larger expedite carriers use is based on group-buying and the bobtail and cargo insurance the expediting companies require their contractors to purchase is relatively inexpensive (at least in comparison to individual buying).
Dave Corfman is a small fleet owner with many years in expediting who at one time was carrying insurance for 15 trucks. He contends that the expedite carriers, in most cases; offer the best deal on liability insurance:
“If you’re leased to a larger carrier, the carrier is often getting a fleet discount that the guy with his own authority and one truck can’t match.”
John Mueller, Safety and Recruiting Director for Premium Transportation Logistics in Rossford, Ohio agrees. “If a driver is calling insurance companies and shopping prices, there’s probably no way that an individual can get the rate that the carriers can get.”
“Another thing, if a driver takes the insurance through the carrier’s company, the chances are that the company has the same insurance agency and underwriting company writing the non-trucking liability insurance, so if there’s an accident, there’s no question who is paying. There’s no battle between insurance companies as to whether the driver was under dispatch or not.”
Corfman says: “If you’re an individual looking to cover one unit, be prepared for sticker shock. For a million dollar policy, which is fairly standard now, it could be $6,000.00 a year for a base policy, depending on the age of the truck.”
“If you’re hauling haz-mat, figure on those prices being doubled. And, for the smaller carriers, the insurance companies will be more stringent in their demands of prospective contractors – quite often requiring two year’s experience and a very clean MVR.”
Corfman says that having a carrier’s coverage benefits the contractor in another way. If an accident results in litigation, it’s more likely that the carrier will be targeted in the suit because of the carrier’s perceived “deeper pockets.”
Occupational Accident Insurance
If you’re an expediting owner-operator, one of the wisest purchases you can make for yourself and your family is workers’ compensation (WC) or especially, Occupational Accident Insurance.
Simply put, “Workers’ compensation” (WC) is a system of statues enacted by each state that provides medical, lost time and permanent disability benefits for employees hurt in the scope of their employment.
Benefits are determined by the individual states, but coverage typically includes medical expenses, rehabilitation costs, a portion of lost wages, and weekly or lump sum payments for families of workers killed on the job.
Rick Gallegos is the founder and president of Transport Insurance Agency, a firm that specializes in providing insurance services to expedited carriers and owner-operators.
Gallegos adds, “All of the major and many of the smaller expedited carriers require their owner-operators to carry Occupational Accident Insurance. Carriers accept the Occupational Accident Insurance because it pays claims like a Workers’ Compensation policy.
It is the standard “alternative” for owner-operators who do not fall under the requirements of worker’s compensation statutes. This includes death claims, disability claims and accident medical claims up to statutory state limits.”
Another insurance perspective
John Mueller of PTL has an extensive background as a safety director for both expedited and general trucking and is well acquainted with the insurance needs of the owner-operator and particularly, WC-type insurance.
“What I try to do during our company’s orientation, is to educate people to the fact that the non-trucking liability insurance that they have on their truck has no medical coverage like their car insurance does. A viable alternative to WC is Occupational Accident Insurance.”
Insurance shopping
Even if it’s not required by your expedited carrier, it’s smart to have something to help pay the medical bills and pick up some lost income if you’re injured on the job. Occupational Accident Insurance generally offers the same basic coverage as workers’ compensation: medical benefits, disability income and life/dismemberment insurance.
Occupational accident insurance is usually easier for owner-operators to get and can be less expensive than WC, but premiums depend on the benefits you choose.
Also look closely at when you’re covered. Some plans only cover injuries that occur when you’re under dispatch, but not when you’re deadheading or working on your truck.
If you’re leased to a carrier that offers a group WC or Occupational Accident Insurance, by all means take a look at the program. Ask about benefits and find out exactly how much you’ll pay for coverage, including premiums and any administrative fees charged by the carrier or its agent.
TIA’s Gallegos says that in many cases, the insurance provided by the carriers is a better deal because of the lower insurance costs that can be obtained by group-buying power. Also, the owner-operators enjoy the convenience of the premiums being deducted from their settlement checks.
“However,” he notes, “For the individual with a good driving record, sufficient experience behind the wheel and who owns a newer, higher-value truck, we can get him a better deal on his own. It can be to his advantage to do some shopping on his own.”
Disability
Individual disability insurance is truly a basic concept. It is an insurance product designed to replace anywhere from 45-60% of your gross income on a tax-free basis should a sickness or illness prevent you from earning an income in your occupation.
Make sure you understand a plan’s definition of disability. Some policies may not pay benefits if you can work at an occupation other than trucking, or they may pay partial benefits if you can do some but not all the duties of your own occupation.
The key terms are “own occupation” and “any occupation.” And make sure your policy covers both injuries and illnesses that interrupt your job.
Like health insurance, disability usually won’t cover you for claims related to pre-existing conditions. You’ll probably have to answer medical questions and maybe get a physical examination. If you’re turned down for full coverage, you may be able to purchase a restricted policy or to pay higher premiums for some level of coverage.
For more information, visit:
Transport Insurance Agency
http:///tia.expeditersonline.com/
Insurance Information Institute
http://www.iii.org/
For a complete listing of state laws concerning workers’ compensation
http://www.comp.state.nc.us./
