Page three of why you don't want to buy a commercial auto policy from Progressive.
As a professional buying commercial insurance, you’re expected to know what type of business you’re actually in. And, as someone who’s bought commercial (and usually personal auto) insurance, you know one of the steps is to sign an application stating that type of business.
Considering the previous statement, what do you do if an agent so willing and ready to sell you the wrong policy says they only put what YOU told them when questioned why you have a policy for a different type of industry than NEMT? Do you think it’s possible an agent willing to lie to the insurance carrier they represent about your business to earn a few commission dollars is willing to lie in order to cover their backside?
What about the agent who didn’t know what they’re doing and entered the wrong information? Do you think it’s possible and maybe more likely they may not even be an insurance agent anymore at the time of the accident?
Another point to consider is what type of service, help, and advice can you anticipate receiving from either one of the above types of agent? A question every business owner, regardless of the industry, must ask is do you want to surround yourself with the best and most highly qualified advisors and people, or will you settle for incompetent and/or unethical?
I can promise you after over 30 years of working in the business world, and over 10 years as a licensed insurance agent, how you answer the “who do I want to associate with” question greatly influences your odds of success in the long run.
If the idea of working non-stop and struggling for four or five years to build a reputation and business only to have everything vaporize before your eyes is appealing or even an acceptable risk, go ahead and cut corners and see how that works out for you.
Yes, it’s true, you may make it either way, albeit why stack the odds against you with short-sighted cost savings that place your business at risk?
We haven’t even touched on service agreements, contracts and corresponding insurance requirements.
You can anticipate brokers and others wanting a contract with you to present an insurance requirement. While there are many reasons why, and it’s beyond the scope of this article to discuss them all, I’ll briefly touch on the applicability within the context here.
When a clinic, assisted living, or other interested party in the care of one of your passengers contracts with you to transport someone, they have potential liability exposure for what you do. If the broker etc.. doesn’t take reasonable steps to make sure you’re a reasonably safe and appropriate transportation provider, you can bet your bottom dollar a plaintiff’s attorney is going to go after them in a big way, or at least they need to expect such treatment.
That’s one motivation to require they be listed as an additional insured. This helps protect them, and is relatively standard. Technically, many service providers, brokers, and others are sophisticated to know the difference between a Named Additional Insured, and an additional insured.
A named additional insured gets added to any given insurance policy through an endorsement usually and regardless of the mechanism of adding a named additional insured, the carrier must be definition get notified so the additional insured can be added.
As a named additional insured, the broker, contractor, and/or providers get notice if your insurance gets canceled and/or non-renewed, and this is where things really get dicey and full of peril for NEMT providers.
Firstly, most of the brokers and larger players already know fully Progressive doesn’t insure NEMT providers. So if you’re asked to present a certificate of insurance naming the other company as a named additional insured and you proceed to present one with Progressive listed as your auto insurance company, you can expect to have it rejected.
In the meantime from the time you requested the certificate and presenting it to the broker, you also triggered a “look-see” (my term, not an industry one) into why whatever your classified as is adding X as an additional insured when NEMT providers usually only ask to list them.
You can rest assured no carrier, Progressive included, wants to sell you a policy for $5000 when their expected risk and loss ratio expectancy is three times the amount. And even if they know they won’t have to pay out, or expect to pay out, no insurance carrier wants the hassle, expense, and trouble, much less the possible loss of taking on clients the actuary tables clearly state they lose money on. If you think otherwise, I have some ocean front property in Wisconsin for sale going cheap.
All of sudden, your “cheaper” policy just became the most expensive and useless option you could choose from because you paid for something you can’t use.
Along the same lines, if you didn’t enjoy buying NEMT auto insurance the first time when you operated on your own schedule, imagine the fun you’re going to have when you’re one or two steps away from finally making some money and instead you have to get online and/or make calls to find insurance coverage? Think you’re going to get a good deal when you’re hustling to get the first and correct type of insurance coverage you can find?
It actually depends, because here’s where it could go either way. If you call me, yes, you’re likely to have all options available to you to choose from. If you call the wrong agent, one willing to take advantage of you instead of appreciating you, it may turn out very differently.
To be continued….
Robert Weinstein is a husband, dad, stock market junkie, real estate broker, and of course…Insurance agent. Interests include my family, economics, marketing, technology, real estate, finance/investing, history, and Asia.
Robert’s insurance expertise includes having the designation of Certified in Long-Term Care (CLTC) and assist in asset protection for families with members entering retirement.
Robert is also an accomplished syndicated writer whose work can be found in TheStreet, MainStreet, CNBC, Forbes, Yahoo Finance, Seeking Alpha, MSN Money, The Money Show, Stock Saints, Motley Fool, Fidelity, Minyanville, RealMoney Pro, and many national and international newspapers.