Best Practice Tips for Lowering Your Commercial Auto Rates

Author, Jeremy Hoolihan, Partner, Rancho Mesa Insurance Services, Inc.

For the last several years, the insurance industry has seen a significant increase in auto rates. In 2023, the top ten auto carriers in the US all saw double digit rate increases. This, in addition to the rate increases we’ve seen since 2018, equates to rates anywhere from 20-50% higher than we had just a few years ago. According to US auto insurers, these rate increases are still not keeping up with the skyrocketing claim frequency and severity. Therefore, we are likely to continue to see auto rates increase before things level off. 

With that being said, positioning your company now with a best practice fleet safety program is more important than ever. It is also critical that business owners work closely with their insurance brokers to develop a program that will not only improve safety on the roads, but will also highlight the efforts a company is focusing on from an underwriting perspective. Minimizing rate increases only comes with the collective efforts of the business owner and their insurance broker. In order to even consider receiving any credits on auto rates, a business needs to stand out from other submissions an underwriter is reviewing. Rancho Mesa understands how important this is which is why we have developed our detailed Fleet Supplemental Application and SafetyOne™ Driver’s Training Program.

As an insurance broker, a vital role we play is representing a business to the insurance marketplace. Providing underwriting details of the business to insurance carriers in an effort to make them interested in quoting the insurance is only the first step. Providing in depth details relating to fleet safety and efforts that go beyond what an underwriter is used to seeing is what Rancho Mesa strives to submit. The more details an underwriter has regarding an auto submission, the more comfortable they will be with the company’s program, which generally leads to more subjective credits. Rancho Mesa developed a Fleet Safety supplemental that dives deep into a business’s fleet program. It collects general information such as fleet size, driving radius, and description of vehicle usage. It also explores details surrounding safety management. Examples of the information collected include:

• Safety controls

• GPS or telematics details relating to maintenance, speed, location, routing, etc.

• Accident reporting

• Fleet safety courses provided

The Fleet Supplemental also provides vehicle and driver information such as:

• Information relating to any permanently attached equipment

• Vehicle inspection and maintenance program

• Where vehicles are parked overnight

• Personal usage policy with employees

• Safeguards in place relating to storing of vehicles

• Process for reviewing and selecting drivers

• Review of Motor Vehicle Reports

• Pre-employment physicals, drug testing, and alcohol testing

Another useful tool relating to fleet safety is Rancho Mesa’s proprietary application called SafetyOne. Rancho Mesa has developed a driver training program that is accessed through the SafetyOne website. The administrator can assign the online driver training courses to the appropriate employees where they can easily be completed from a computer or mobile device.

Since each employee has their own login and password to access their trainings, the records are always easy to locate in the platform.

Driver training courses include both a video and quiz. And, they are offered in both English and Spanish. Employee watch the video and then take the quiz. This can be done as many times as needed in order to pass the course. We want people to really understand the content, not just get a minimum passing score. 

Courses include:

• Distracted Driving – The course covers the cost of distracted driving, “multi-tasking”, technology and distraction, eliminating distractions before you drive, cell phones, and fighting distraction on the road.

• Driver Safety – The course covers preparing to drive safely, driving fundamentals, driving with other vehicles, driving a night and bad weather, distracted driving and road rage, and handling an emergency.

• Driving Defensively – This course covers the fundamentals of driving defensively, dealing with distracted drivers, coping with aggressive drivers, using your headlights, driving safely in bad weather, handling a blowout, and sharing the road with trucks and buses.

• Driving Safety – This course is a refresher course that covers preparing to drive safely, the fundamentals of safe driving, driving safely when sharing the road with different types of vehicles, staying safe when driving at night and in inclement weather, road rage and distracted driving, and what to do if there’s an emergency.

While the auto marketplace continues to see rates increase, now is not the time for businesses to sit back idly and be complacent with their fleet safety program. Working with your insurance broker to improve your fleet safety program and sharing this information with insurance companies can have a significant effect on your auto premiums. 

If you would like to discuss how Rancho Mesa can assist in improving your auto risk profile, please feel free to reach out to me at (619) 937-0174 or jhoolihan@ranchomesa.com.

Heat Illness Awareness Vital for California's Construction Companies

Author, Kevin Howard, Account Executive, Rancho Mesa Insurance Services, Inc.

California faces a critical need to prioritize heat illness awareness among its workforce. The combination of Southern California's recent above-average rainfall and the anticipated heatwave resulting from El Niño has created the possibility of an extremely warm summer. Construction companies must remain vigilant and adaptable, implementing appropriate measures to address these changing weather dynamics and ensuring the safety of their workers. By staying informed about weather forecasts and implementing flexible work schedules and site preparations, companies can effectively navigate these challenging conditions and prioritize the well-being of their employees. By understanding the significance of heat illness awareness, companies can ensure the safety and well-being of their workers while fostering productivity, minimizing downtime, and improving overall project efficiency.

Recognizing the Risks

The construction industry in California is particularly vulnerable to heat-related illnesses and fatalities due to the physically demanding nature of the work and prolonged exposure to high temperatures. Heat stress, heat exhaustion, and heat stroke are severe conditions that can result in significant health complications. By acknowledging the risks associated with working in high temperatures, construction companies can proactively take measures to mitigate potential hazards.

Cultivating a Culture of Safety

Establishing a culture of safety is crucial for construction companies in California to create an environment where employee well-being is the top priority. Employers should develop comprehensive programs focused on preventing heat-related illnesses. These initiatives should include employee training, hazard assessments, access to shade and water, acclimatization procedures, and adjusted work schedules. Regular safety meetings and open lines of communication should be encouraged to address concerns, share information, and ensure that everyone is aware of the potential risks associated with working in high heat.

Implementing Worksite Modifications

Modifying the worksite environment can reduce the impact of heat-related illnesses. Construction companies should establish shaded rest areas where workers can take breaks, cool down, and hydrate. Access to potable water should be readily available to prevent dehydration, and regular hydration breaks should be scheduled throughout the day. Additionally, adjusting work schedules to avoid the hottest periods, utilizing cooling fans or misting systems, and implementing rotational job assignments can help reduce heat stress and improve worker safety.

Monitoring and Supervision

Supervisors and management play an important role in ensuring heat illness awareness on construction sites. Regular monitoring of weather conditions and temperature provides valuable information for determining appropriate work practices and scheduling. Close supervision enables the early detection of signs of heat-related illness and allows for immediate intervention. Encouraging workers to prioritize their own well-being and empowering them to report any symptoms promptly is equally important.

Heat illness awareness is vital for construction companies operating in California. By prioritizing worker safety and implementing comprehensive programs to prevent heat-related illnesses, employers can safeguard their employees from the risks associated with high temperatures. Moreover, such initiatives enhance productivity, avoid worker’s compensation claims, reduce downtime due to illness or injuries, and improve overall project efficiency. By cultivating a safety culture, providing necessary PPE, implementing worksite modifications, and maintaining close supervision, construction companies can establish a healthy and safe working environment that ensures the well-being of their workers.

Rancho Mesa’s Upcoming Heat Illness Prevention Workshop

Lastly, Rancho Mesa Insurance is hosting our annual  Heat  Illness Prevention workshop on June 2nd at the Mission Valley library from 10:00 AM to 11:30 AM. This workshop will provide valuable insights, best practices, and resources to help construction companies and their employees effectively address and prevent heat-related illnesses. Be sure to join this workshop to stay informed and proactive in ensuring the health and safety of your workforce.

Insurance Benefits of GPS Systems in Commercial Vehicles

Author, Kevin Howard, Account Executive, Rancho Mesa Insurance Services, Inc.

For businesses that rely on a fleet of commercial vehicles, insurance costs can be a significant expense. Insurance carriers calculate premiums based on a variety of factors, including the age and condition of the vehicles, driver experience and record, and the frequency and distance of trips. One factor that can positively impact insurance costs is the use of global positioning systems (GPS) in commercial vehicles. Below, we will explore some of the insurance benefits of installing GPS systems in commercial vehicles.

Improved Safety

GPS systems in commercial vehicles can help improve safety by providing real-time tracking of vehicles and drivers. This can help businesses identify and address unsafe driving behaviors such as speeding, sudden braking, and hard cornering. By addressing these behaviors, businesses can reduce the risk of accidents and insurance claims which can result in lower insurance premiums.

Reduced Theft Risk

GPS systems can also help reduce the risk of vehicle theft. If a commercial vehicle is stolen, GPS tracking can help businesses locate the vehicle quickly and notify law enforcement. This can help reduce the risk of property loss and insurance claims related to vehicle theft.

Faster Claims Processing

In the event of an accident or other incidents involving a commercial vehicle, GPS systems can provide valuable data to insurance carriers. This can include information on the location, speed, and direction of travel of the vehicle at the time of the incident. This data can help insurance carriers process claims more quickly and accurately, which can help reduce costs and improve the overall claims experience for businesses.

Lower Insurance Premiums

GPS in vehicles can lower the loss ratio which is a key factor that underwriters use. Furthermore, the disclosure to insurance underwriters that GPS is installed and properly utilized could help insurance brokers negotiate lower premiums based on this added safety feature.

Improved Business Operations

In addition to insurance benefits, GPS systems can also help businesses improve their operations. Real-time tracking and reporting can help businesses optimize their routes, reduce fuel costs, and improve overall efficiency. By improving operations, businesses can reduce costs and improve profitability, which can have a positive impact on insurance costs and premiums.

GPS Systems have a multitude of benefits. These systems can save lives because drivers pay more attention to detail when GPS is on the vehicle. They can lower insurance premiums which can improve the return on investment. Lastly, the ability to track a stolen vehicle is a control that creates major benefits knowing that the cost of vehicles and the time needed to locate a replacement is at an all-time high.

To learn more about how GPS on your commercial vehicles can be implemented as part of your risk management plan, contact me at (619)438-6874 or khoward@ranchomesa.com.

Your Commercial Vehicle May Require a Motor Carrier Permit

Author, Jeremy Hoolihan, Account Executive, Rancho Mesa Insurance Services, Inc.

When a company has vehicles on the road, it’s important to understand all the commercial vehicle requirements in order to stay in compliance.

We recently had a client purchase a new medium-sized truck from a commercial dealership. A few weeks later, an employee driving that new vehicle was pulled over by the California Highway Patrol and fined for not carrying a Motor Carrier Permit (MCP). Our client immediately contacted Rancho Mesa confused by the citation. They have other similar trucks that they have been on the road for many years and never received a citation like this. To avoid a similar situation, it’s essential to understand the MCP and the types of drivers and vehicles that are required to carry one.

The MCP provides proof that the motor carrier is legally operating on California highways. In order to get a MCP, the Department of Motor Vehicles (DMV) verifies that the motor carrier has complied with all the requirements for both registration and insurance.  It includes specific information about the motor carrier (e.g. name, mailing address, USDOT number, California Carrier Identification number (CA #), and effective/expiration dates of the permit. MCP terms only last 12 months, so make sure not to miss the deadline. 

There are many drivers/companies that are required to have MCPs. If your drivers fall under any of these scenarios, they must have a MCP:

• Any person, business or entity who is paid to transport property in their motor vehicle regardless of the vehicle’s size, type or weight. This applies to for-hire carriers.

• Any person, business or entity operating a motor vehicle with Gross Vehicle Weight Rating of 10,001 pounds or more.  This applies to businesses transporting their own property (i.e., private carrier).

• Operators of any vehicle or a combination of vehicles transporting hazardous materials.

• Operators of a combination or a motor truck and trailer, semitrailers, pole or pipe dollies, auxiliary dollies, and logging dollies that exceed forty feet in length when coupled together.  For purposes of an MCP, a “trailer” excludes camp trailers, utility trailers, and trailer coaches.

While there are many scenarios where a MCP is required, there are still some instances where the MCP is not. A MCP is not needed for:

• Vehicles operated by household goods and/or passenger carriers.

• Vehicles operated by household goods carriers to transport used office, store, and institutional furniture, and fixtures when operated under a household goods carrier permit.

• Pickup trucks with gross vehicle weight rating of fewer than 11,500 pounds, an unloaded weight of fewer than 8,001 pounds, and equipped with a box-type bed not going over 9 feet in length when operated in non-commercial circumstances.

• Utility trailers, camp trailers, or trailer coaches.

• Vehicles providing transportation of passengers only, a passenger stage corporation transporting baggage and express upon a passenger vehicle incidental to the transportation of passengers.

• Vehicles used only for personal use and are 10,000 pounds gross vehicle weight rating or less.

• Two-axle daily rental trucks with a gross vehicle weight rating of  than 26,001 pounds when operated in a non-commercial use.

• Vehicles that are exempt from vehicle registration fees. These includes all publicly-owned vehicles, special construction equipment, special mobile equipment, and any other vehicle used primarily off highway and not required to be registered.

• Motor trucks or two-axle truck tractors with a gross vehicle weight of less than 26,001 pounds, when operated singly or when used to tow a camp or utility trailer, a trailer coach, a fifth-wheel travel trailer, or a trailer designed to transport a watercraft, and is never operated commercially.

There are potential fines for not carrying a MCP when its required. If a motor carrier caught operating with a suspended MCP, they could be fined up to $2,500, charged with a misdemeanor and/or receive up to three months in jail. The CHP may also find it necessary to impound the vehicle.

It is important to know the classification of your vehicle prior to purchase in order to determine whether a MCP filing is required. 

Manufactures classify their truck based on the Gross Vehicle Weight Rating government guidelines. The GVWR indicates the maximum truck weight plus what it is able to carry fully loaded. That includes the truck’s own weight plus the fuel, cargo, passengers, and even the trailer tongue. Typically, ¾ and 1 ton trucks are referred to as “heavy duty,” though they are technically classified as light duty vehicles.  MCP’s are typically required when your vehicle falls into the medium classification (GVWR 10,001-26,000). 

Do your due diligence ahead of purchasing the vehicle in order to know the specific licensing and permitting requirements.  Also, consider working closely with an insurance broker who can assist with the required insurance coverages and documents needed during the application process.

Rancho Mesa Insurance has extensive experience helping business owners with fleets of all sizes. If you need assistance with your commercial insurance needs, please contact me at (619) 937-0174 or via email at jhoolihan@ranchomesa.com.