Fleet owners drive to keep insurance costs down

REGION – Insuring multiple vehicles is a necessary cost of doing business for contractors, service trades and numerous other companies that sell product or deliver merchandise. Tack on the highest gas prices in years and business owners in the Grand Traverse region are making sure they don't overlook a penny when it comes to getting the best insurance rates possible.

Currently, the business insurance market is soft, meaning premiums are actually decreasing a bit on the general liability side.

"It's been pretty stable," said Justin Looyenga, CEO of Larkin Insurance in Traverse City. "It would be very unlikely to see a large increase."

But Tom Hopkins, owner/president of Honor, Frankfort and Onekama Building Supply in Benzie and Manistee counties, isn't taking any chances. He annually shops around for the lowest business insurance and checks his drivers' licenses for violations.

"A bad driver can't drive or insurance costs go up," said Hopkins. "We haven't had any trouble with that for a couple of years."

Hopkins said his company raised deductibles on its 20-vehicle fleet three years ago and dropped some optional coverage to keep his costs in check.

In Grand Traverse County, D&W Mechanical, a plumbing, heating and cooling contractor, insures 35 vehicles and is currently insured by one carrier offering an umbrella for its liability, property and fleet coverage, according to Kathy Bowski, office manager/ accountant. D&W's insurance costs, on the whole, have actually gone down, so it hasn't had to make changes to its current coverage.

"The owners look at (our rates) two to three times per year, but they haven't seen anything out of the norm for the economic climate," Bowski said.

D&W's fleet insurance costs have not risen appreciably, which Bowski attributes to the quality of people it hires and the fact that a majority of its 50 employees have been with them a long time. The company has also been fortunate to hire safe drivers who avoid accidents-with the "occasional deer or slippery road" exception.

Max's Service in Traverse City puts 15 vehicles on the road for repair service and new deliveries. Third-generation owner Jeff Owens said his company needs box trucks with lift gates in addition to pickups and vans. Like D&W, Max's has given its business to the same insurance agency "forever," which shops rates for them each year.

"We believe in staying loyal," Owens said. "If we treat them right, they'll treat us right."

During its last policy review, Max's kept the same insurance coverage and deductibles in place for the fleet.

To keep the risk of future claims to a minimum, the company checks the licenses of the drivers it hires to avoid employing those with violations or accidents that could raise insurance rates. Once hired, drivers are given safety suggestions for a variety of situations, Owens said, and are encouraged to call headquarters with any questions.

In Leelanau County, Nathan Kalchik, a third-generation owner of 50-year-old KAL Excavating of Omena, operates six heavy-use trucks ("dump trucks are our main vehicle for transportation") and 12 pickup trucks. In the winter months, the company offers snowplowing and sanding services, which helps it retain employees and pay equipment and insurance expenses incurred throughout the year. Though the same insurance agency has checked rates annually for KAL, this year a second agency has been asked to shop for rates among different carriers.

"You want to find companies that cater to our work: construction," Kalchik said. "We want to make sure we're still getting the best rate (for the coverage)."

KAL's fleet insurance is part of its larger business insurance package. Kalchik said his company has raised its deductibles. Some of its vehicles are older, and its accident rate for drivers is "typically pretty low." Steps the company takes to reduce risk: employing two staff mechanics to keep the trucks in good working order, promoting employee attendance at safety programs for liability and workers' compensation and reminding the big-truck drivers to "watch out for the other guy."

"Our drivers are more aware of what's going on out there," Kalchik said. "They know they've got to be looking out for that other guy and keeping a (safe) stopping distance. Our drivers in heavy trucks can't stop on a dime."

Larkin's Looyenga said that insurance carriers don't generally offer safety training sessions for the vehicle side of business insurance as they do for workers' compensation and liability. Still, there's one more thing companies with multiple vehicles can do to keep costs to a minimum.

"Look at association memberships. Our own, great Traverse City Chamber provides an 8-14 percent (insurance) discount." BN

To reduce costs:

1. Consider insuring with one carrier to receive multi-policy discounts.

2. Make sure vehicles have the proper valuation.

3. Review deductible limits which can run $100-$5,000 or greater, depending on a vehicle's rating. Vehicles costing $50,000-$80,000 might warrant higher deductibles, if the company can afford to pay the larger deductible amount in the event of a claim.

4. Compare costs of regular or basic collision coverage (the deductible always applies) to broad collision (deductible only applies if you are substantially at fault)

5. Check driving records of new hires and keep records updated.

Source: Justin Looyenga, Larkin Insurance