Are you trucking company that is wondering at what is loss run in trucking insurance? If YES, here is the meaning of loss run and everything you need to know. Tow truck and transportation insurance rates are a major concern for drivers and business owners. The goal is to get good coverage at a good rate. But to do that, you have to understand what affects your towing or truck insurance rates.
One thing that is a big part of the rates you’ll be able to get is your business’s loss run. So it’s something to pay attention to.
Loss run reports are, more or less, the insurance world’s equivalent to credit scores. Just as a bank would want to see your business’s credit score before offering you a loan, insurers want to see a loss history before offering coverage. This report will reflect on how well your trucking business is operating.
Just as credit scores give banks an idea of whether it is a good idea to give your business a loan or credit card, loss runs can identify the level of risk underwriters could face if they insure your trucking business. Note that the reports give both you and potential insurers a clear picture of your experience and the degree of risk associated with insuring your company.
By reviewing your loss runs reports, insurance companies will evaluate the severity of the losses as well as the frequency with which they occur. This is a critical element of the underwriting process. A loss’s severity can reflect a one-time catastrophe or it could signal an extraordinary hazard that is inherent within your business operations.
Frequent claim activity does send warning signs to underwriters that your maintenance schedule, business practices, or manufacturing process may display weaknesses. Therefore, an explanation of the loss activity is always warranted to prevent the underwriter from making any presumptions.
The report will include the named insured, the policy number, the date of each claim, and the amount paid or on reserve, and it may also include a brief description of the claim. Each claim is listed on its own line. The report will also specify whether each claim is open or closed. If you have had coverage with more than one insurance company, then you will need to request a loss run from each of these providers.
How to Request a Loss Run Report
Note that you may not even need to file any kind of official request. In today’s digital age, since many companies value making things easily accessible, your loss runs may be available for download in an online portal. If your insurer doesn’t provide such a service, you should reach out to your point of contact and ask for a loss runs report.
You will just have to send a letter to either the agent or the insurance company. The letter should include the name the policy is insured under, the policy numbers, and the number of years or policy periods for which you are seeking a history. In most cases, your agent can assist you with this process or provide you with a template letter. In some cases, an agent or company will provide this by way of e-mail or phone call. In most states a company is legally required to provide your loss runs within ten business days.
If you are being asked for a loss runs report by a new insurer you’re considering, you will likely be given a timeframe they want reported on (3 years, 5 years, etc). Make sure to give yourself enough time to pass along your information; loss run reports can take anywhere from a day to a week or more to generate. Your state may have regulations in place that require your insurer to respond to your request and generate a report within a given time frame. Stay up to date on the expectations you have a rightful claim to.
Loss runs are reports that provide a history of claims made on a commercial truck insurance policy. Typically, an insurance company will request up to five years of history, or for however long coverage has been provided. A claims history is one of a number of factors that are taken into consideration when your application is being underwritten. If an application is approved, it can also have an effect on the premium, either with credits or surcharges, depending on the history. Loss runs are important when it comes to your tow truck insurance or truck insurance.