BaltACDGouging is Gouging - no matter the industry. In many cases cheaper insurance results in poorer coverage under the guise of it being the 'same' coverage - problem is no on EVER knows how good or bad the coverage is until it has to be used.
1. The car insurance company had a program to find the highest price they could charge before the customer went to a different company.
2. Here is the customer who found the rates too high: "When I bought two new cars a few years ago I thought the large increase was excessive and went to an insurance agent looking for new coverage. The agent looked at the rate that Allstate wanted and asked if I had multiple accidents or dui's. None of that applied. She found better coverage with another company for less than half the cost."
3. The customer bought better insurance for a lower price.
What's the alternative? I have a product. I developed the product. I want to sell the product and make money for my work. People are willng and able to buy my product for $10. However, because I'm a nice guy, I'll only charge them $7.
York1 John
Wonder about the truck chasing lawyers and the rates going up? Constant parade of "Hit by a truck? Better call Saul!" TV and billboard ads blanketing Atlanta....
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
York1 BaltACD Ah yes - why sell insulin to a diabetic for $50 a month when you can gouge them for $1500 a month - after all it is only life or death for the diabetic - both financial and real life or death. After all it is only business. Really? You're going to compare car insurance, with dozens of companies, each offering dozens of pricing schedules, to life and death insulin? The poster himself said that he went to a different company and got cheaper insurance.
BaltACD Ah yes - why sell insulin to a diabetic for $50 a month when you can gouge them for $1500 a month - after all it is only life or death for the diabetic - both financial and real life or death. After all it is only business.
Really?
You're going to compare car insurance, with dozens of companies, each offering dozens of pricing schedules, to life and death insulin?
The poster himself said that he went to a different company and got cheaper insurance.
Gouging is Gouging - no matter the industry.
In many cases cheaper insurance results in poorer coverage under the guise of it being the 'same' coverage - problem is no on EVER knows how good or bad the coverage is until it has to be used.
Never too old to have a happy childhood!
BaltACDAh yes - why sell insulin to a diabetic for $50 a month when you can gouge them for $1500 a month - after all it is only life or death for the diabetic - both financial and real life or death. After all it is only business.
Shadow the Cats owner Sorry been busy dealing with a FMCSA visit plus a couple other wonderful things called prepping for the end of quarter numbers and other issues. Yes we just got hammered with a 15% increase in our own insurance costs. Now reminder my boss has had ZERO chargable accidents ZERO OOS citiations for drug use ZERO maintaince OOS issues in the last 18 months and ZERO HOS violations for 2 years. The reason given and I asked some of the smaller carriers we help by giving loads to around here when we are strapped for trucks was this the ELD Mandate has actually caused more accidents in the last 2 years than it has prevented. Why drivers have to race their freaking clocks on the computers instead of being able to come up with the time needed to find a space to safely park. Who would have thought that. Also one of the larger insurance companies for OTR carriers stopped insurance policies for OTR carriers meaning there are less companies that will insure companies now than before. Which means they can charge more. Hell if your a hazmat carrier like us we have a choice of 3 nationwide we can pick from unless we self insure and that requires a 100 million dollar bond. So we pay what they require. IIRC the cost for us for this year for 250 trucks was in the neighborhood of 25 Million dollars to cover the fleet. Yet people wonder why carriers are going out of business when they can not get a rate increase to cover their own costs.
Sorry been busy dealing with a FMCSA visit plus a couple other wonderful things called prepping for the end of quarter numbers and other issues. Yes we just got hammered with a 15% increase in our own insurance costs. Now reminder my boss has had ZERO chargable accidents ZERO OOS citiations for drug use ZERO maintaince OOS issues in the last 18 months and ZERO HOS violations for 2 years. The reason given and I asked some of the smaller carriers we help by giving loads to around here when we are strapped for trucks was this the ELD Mandate has actually caused more accidents in the last 2 years than it has prevented. Why drivers have to race their freaking clocks on the computers instead of being able to come up with the time needed to find a space to safely park. Who would have thought that. Also one of the larger insurance companies for OTR carriers stopped insurance policies for OTR carriers meaning there are less companies that will insure companies now than before. Which means they can charge more. Hell if your a hazmat carrier like us we have a choice of 3 nationwide we can pick from unless we self insure and that requires a 100 million dollar bond. So we pay what they require. IIRC the cost for us for this year for 250 trucks was in the neighborhood of 25 Million dollars to cover the fleet. Yet people wonder why carriers are going out of business when they can not get a rate increase to cover their own costs.
Now, that's on topic.
The over the road (OTR) truckers have a significant cost increase problem at a time when their charges to their own customers are under significant downward pressure. The railroads could, and should, take advantage of this.
The major railroads are, in fact, largely self insured. That means they just cover their own cost for things such as a "Normal" wreck. They will carry insurance for catastrophic losses. But such coverage doesn't kick in until some million dollars of loss.
The rails are largely not covering anyone but themselves. They're in charge of their own fate and are not burdened by being in a loss pool with other carriers who may have lower standards.
This should be a cost advantage vis a vis trucking. And the railroads should use it aggressively. I do not see a return to carload. Except for niches, I see carload as obsolete. But it could boost intermodal. Fewer truck miles = fewer truck insurance claims. And that will reduce the cost of truckers' insurance. So a trucker using intermodal will have an increased cost advantage over an OTR operator.
As to insurance pricing, please know that many insurance "Companies" are non profit mutual pools. State Farm and USAA are but two examples. There are no shareholders. Each policy holder just throws in some money and anyone suffering a loss gets paid out of the pool. They do have to keep some money to effectively manage the pool. Allstate is a for profit company. But it has to be rate competitive with the non profit pools. That should tell you something about the cost of capital.
As far as predicting how much the insurance charges can be increased without loosing the customers, that's just normal. Heck, your local pizza shop does that. In economics it's called "Elasticity".
York1 mvlandsw The state of Pennsylvania claimed that Allstate was using a program to determine how much of a rate increase a customer would tolerate before changing insurance companies. To me, this sounds like good business practice. If you have a product for sale, it would be silly to price it lower than what someone would pay. It's not greed, it's common sense.
mvlandsw The state of Pennsylvania claimed that Allstate was using a program to determine how much of a rate increase a customer would tolerate before changing insurance companies.
To me, this sounds like good business practice.
If you have a product for sale, it would be silly to price it lower than what someone would pay.
It's not greed, it's common sense.
Ah yes - why sell insulin to a diabetic for $50 a month when you can gouge them for $1500 a month - after all it is only life or death for the diabetic - both financial and real life or death. After all it is only business.
mvlandswThe state of Pennsylvania claimed that Allstate was using a program to determine how much of a rate increase a customer would tolerate before changing insurance companies.
SD70Dude greyhounds Please don't tell me about "Greedy" insurance companies. I'm retired from Allstate and I know how insurance prices are set. It's a very competitive line of business and any company that gets "Greedy" will quickly loose its customers. And oil companies don't conspire to keep the price of gasoline high. And utilities have never manipulated the electricity market to raise prices. And the U.S. has the best healthcare system in the world. And Hunter Harrison was a fluffy little bunny who held his employees close to his heart.
greyhounds Please don't tell me about "Greedy" insurance companies. I'm retired from Allstate and I know how insurance prices are set. It's a very competitive line of business and any company that gets "Greedy" will quickly loose its customers.
Please don't tell me about "Greedy" insurance companies. I'm retired from Allstate and I know how insurance prices are set. It's a very competitive line of business and any company that gets "Greedy" will quickly loose its customers.
And oil companies don't conspire to keep the price of gasoline high.
And utilities have never manipulated the electricity market to raise prices.
And the U.S. has the best healthcare system in the world.
And Hunter Harrison was a fluffy little bunny who held his employees close to his heart.
And there's this land in South Florida...
mvlandswThe state of Pennsylvania claimed that Allstate was using a program to determine how much of a rate increase a customer would tolerate before changing insurance companies. Maybe they all do that.
I believe that the concept is known as "the dollar left on the table".
Most Geedy business types try to avoid it.
BaltACDSurprised we have not heard from 'Shadow the cat's Owner'.
I was thinking the same thing, this would be an ideal topic for stco.
I don't think the insurance companies are going to give squat for a credit to single owner-operators based upon a pass-off to rail....because the Trucker isn't going to go home and sit idle once the load has been passed. He's going to go out and find another load to haul and will need coverage for that.
Surprised we have not heard from 'Shadow the cat's Owner'.
Greetings from Alberta
-an Articulate Malcontent
greyhounds said
"Please don't tell me about "Geedy" insurance companies. I'm retired from Allstate and I know how insurance prices are set. It's a very competitive line of business and any company that gets "Greedy" will quickly loose its customers."
My experience with Allstate seems to indicate greed. I had Allstate auto insurance since I started to drive, over 50 years ago. Every year there were small increases which I accepted.When I bought two new cars a few years ago I thought the large increase was excessive and went to an insurance agent looking for new coverage. The agent looked at the rate that Allstate wanted and asked if I had multiple accidents or dui's. None of that applied. She found better coverage with another company for less than half the cost.
The state of Pennsylvania claimed that Allstate was using a program to determine how much of a rate increase a customer would tolerate before changing insurance companies. Maybe they all do that. Their business is to make money. It's been said that the best way for customers to hold their costs down is to switch insurers every few years. They all seem to offer better rates for new customers.
Success in business is much less about keeping costs down and more about one's ability to pass those costs on to the customer. Insurance rates are going up for everyone.. even if you're a good operator the cost is going up. So we pass them along, and in three months from now Joe/Jane Consumer will be paying more at Walmart. Not a big deal.
Thinking further about it, there are so many keen minds already working the intermodal pool, I doubt they have overlooked insurance cost assignment.
Probably already a form that some clerk fills out to make it all official. At least for the large outfits that do this sort of thing regularly.
Not sure if "Joe Owner-Operator" has the same option.
Question: would the railroads even want to work with small owner/operator outfits? Probably have to work through an intermediary like TnT or similar.
Convicted OneSo (I'm playing my hand here) I doubt they would want to surrender a truly proportionate share as a savings to the poor trucker.
I'm sure they would not.
On the other hand, if the "reason" for higher nominal rates includes risk from on-road operation (or driver responsibility) the recognition of different risk when the load is running intermodal may involve lower premium amounts, perhaps quite substantial for companies with 'higher risk' of having unskilled drivers, operating on-road in trouble areas, etc.
The real question is 'how competitive the market will actually be' for trucking companies. If via tacit collusion everyone's "market" rate goes up substantially, how far can you gouge before the threat of re-regulation gets traction? (I suspect, given the reaction to fuel surcharges, the answer is in real terms 'quite a bit'.)
In a perfect world, an insurer would look at a given company's track record of claims. If indeed the intermodal operation results in a lower share of claims, or lower absolute claims, then a rate-adjustment program "might" be an option for business generation ... the problem being that the first insurer through that door stampedes everyone into lower rates, which is a war no insurer probably wants.
If the subrogation process for railborne claims is immediate and positive, the same review process may apply even if the relative number of claims should be high for a given period, for any reason beyond the trucking company's control. This might further lead to mandatory TOFC/COFC routings to avoid 'problem' carriers or areas, even if the overall tariff should be higher.
OvermodSuspect this would be handled via subrogation, where the trucker's insurance company may pay a claim but immediately goes after the railroad's insurer for compensation and costs.
I agree with you completely there. The thought process I was going through at the time, however, was more along the lines that the fact that the truck was under the umbrella of the railroad (during their portion of the trip) would not excuse the truck from the need for coverage on his payload.
So, whatever formula was devised to determine how much the trucker is to save on his premium (by using a program such as is proposed), will be more complex than just a straight proportionate share calculation.
Still, and foremost,....I'm wondering how any such savings is to be determined and applied in such a way that the truckers insurance company feels good about making the credit?
Based upon my own experiences moving state to state that required me to terminate policies earlier than full term, I recall the Geedy insurance company wanted more than just a proportionate share of the premium for the time elapsed while under their coverage.
So (I'm playing my hand here) I doubt they would want to surrender a truly proportionate share as a savings to the poor trucker.
How does the trucker communicate "well, these 50 loads traveled 100% by highway, while these other 75 loads traveled 90% by train AND 10% by highway in such a way that the insurance company accepts it and feels good about issuing a credit?
Convicted OneObviously the trucker is still going to have to maintain some form of coverage for his payload even during the time it is in transit with the railroad, to protect him from "Geedy" lawyers that might be working for his customers?
Suspect this would be handled via subrogation, where the trucker's insurance company may pay a claim but immediately goes after the railroad's insurer for compensation and costs. Presumably the railroad insurer would be consulted before any 'settlement' were reached, and given the right to participate in a suit rather than settlement on terms if they disagreed on fault or amount.
greyhoundsSo possibly a trucker could save money by railing the load and reducing his/her own liability along with the insurance carrier's liability. (If the train has an incident it's on the railroad, not the trucker.) This should lead to lower insurance costs for the trucker.
What type of mechanism do you propose that would confirm to the truckers insurance company that the railroads insurance company has assumed the risk (per trip)?
I'm assuming that the trucker will pay annual or biannual premiums, yet there needs to be a way to accurately measure and confirm the conveyance of liability to the railroad in order to give the trucker's insurance company the comfort it requires to make some form of rebate or credit.
Obviously the trucker is still going to have to maintain some form of coverage for his payload even during the time it is in transit with the railroad, to protect him from Geedy lawyers that might be working for his customers?
EuclidSo what percentage of truck freight will substitute to rail transport if truck insurance prices truck freight out of business?
No amount of truck-insurance price increase will 'price truck freight out of business'. The cost will be passed along to those consumers who have no alternative to truck freight -- essentially including all last-mile delivery service or container drayage for railborne TOFC/COFC. For a model, see the way fuel price surcharges were imposed several years ago.
If you look carefully at what he actually said, there might be savings for that portion of an intermodal trip covered by the railroad's, rather than a truck line's, insurance, and this might be an incentive for increased use of intermodal moves. What is left unsaid and unimplied is whether railroad insurance cost for intermodal may not be increasing also, something I have not yet looked into.
Another problem not discussed is that many of the service and performance issues with part-rail moves are not strictly cost-associated, and merely increasing the insurance cost as passed to customers may not cause them to switch modes.
I would expect only a small percentage of overall 'truck customers' to switch to pure rail (e.g. from siding to siding with minimal drayage) although a section of the industry that might acquire an advantage would be cross-dock facilities like the one we were discussing on CRandIC last week.
Agree, although I recall my father studied this provocative 1936 book in his UofC MBA program way back in the 40s: "Life Insurance, a Legalized Racket"
greyhounds Please don't tell me about "Geedy" insurance companies. I'm retired from Allstate and I know how insurance prices are set. It's a very competitive line of business and any company that gets "Greedy" will quickly loose its customers.
Please don't tell me about "Geedy" insurance companies. I'm retired from Allstate and I know how insurance prices are set. It's a very competitive line of business and any company that gets "Greedy" will quickly loose its customers.
Insurance may be competitive industry, however, I think the Allstate you worked for and the Allstate of today are totally different organizations. We are living in the age of the gouge and collusion. Jack up the rates and profit from it and your comptition will seek those same levels of profit and jack up their rates so no one is left out on a island.
The business world we worked in has changed and not for the better.
I have to wonder if today's culture of "everyone is a winner" might also be contributing to the issue. After all, that accident had to be someone else's fault, right? Especially if it was that big, bad truck (and it's company, with the deep pockets).
I'm sure the cost issues in the medical side of things aren't helping either. A "precautionary" trip to the hospital after a collision will definitely run four figures, and possibly five, as the docs make sure that they can't be sued for missing something. People don't take two aspirins and "call me in the morning" any more. They want to be fixed now...
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
I found this article about the cause of the skyrocketing rates. It does not sound like it will be letting up soon.
https://www.truckinginfo.com/157754/why-insurance-costs-are-sky-high
This is an article from the Wall Street Journal about how truckers' insurance rates are skyrocketing. It's behind a paywall.
https://www.wsj.com/articles/surging-truck-insurance-rates-hit-freight-operators-1157893483
So possibly a trucker could save money by railing the load and reducing his/her own liability along with the insurance carrier's liability. (If the train has an incident it's on the railroad, not the trucker.) This should lead to lower insurance costs for the trucker. And truckers are in dire need of lower costs.
And, another thing.
On another site there was a picture of some Hub Group reefer containers. They were of the new high cube type made possible by a new Thermo King design. So Hub Group has joined the reefer parade. That's a big change. Hub Group was founded Phill Yeager, who, I was told, "Hated" reefers. He's with God now, and the acquisition of reefer containers by Hub is a good change. There's a whole lot of business out there to be gained by the railroads, so don't be all doom and gloom.
We've got to see opportunities as much as we see problems.
Our community is FREE to join. To participate you must either login or register for an account.