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Truckers take refuge in insurance payment relief, flexible load types amid pandemic

Image: Jim Allen (FreightWaves)

March was anything but routine for truckers as the COVID-19 pandemic placed roadblocks in the paths of many trucking companies and freight brokerages. Like most sectors of the U.S. economy, the trucking industry continues to cautiously navigate a fragile economic landscape.

Amid the rising insurance rates that have plagued the industry in recent years, trucking companies have found temporary comfort in the form of insurance grace periods. 

“COVID-19 is pushing state insurance regulators to issue moratoriums on cancellations due to nonpayment,” said Reliance Partners COO Laura Ann Howell.

Numerous states and insurance companies have temporarily extended payment grace periods or issued moratoriums on policy cancellations in response to the pandemic. Many insurers are even allowing truckers to suspend their policies or defer premium payments temporarily if they agree not to operate during the designated time frame.

Howell noted Louisiana specifically, which has issued Emergency Rule 40, placing a moratorium on policy cancellations and nonrenewals for policyholders within the state through May 12.

Howell clarified that these moratoriums are exclusively to prevent cancellations for nonpayment of premiums. She noted that other factors, such as a change in risk type, can still result in the cancellation of coverage per normal.

“We think the market will start to loosen up heading into late Q3, early Q4,” Howell said. “We think that a lot of these deferrals of premiums and moratoriums on cancellations will have a long-lasting impact on the insurance economy. It’s going to be interesting to see how insurance companies will be affected in the long run.”

Regulatory and financial relief in the form of insurance waivers as well as the Coronavirus Aid, Relief and Economic Security (CARES) Act and emergency declarations issued by the Federal Motor Carrier Safety Administration (FMCSA) have given hard-pressed motor carriers room to breathe, for the time being. These forms of assistance, however, are merely Band-Aids for truckers whose businesses are severely wounded by a standstill economy.

The COVID-19 outbreak has disrupted numerous trucking sectors disproportionately. Drivers in certain sectors have found their once-fruitful industries drying up. According to Howell, fuel and auto haulers are experiencing notable declines in business as fuel consumption continues to dip and automobile manufacturing comes to a halt.

Truckers in futile sectors are now leaping toward more profitable load types to decrease their risk. Reefer volumes have risen as refrigerated goods such as groceries and other items deemed essential are currently in high demand. Howell suggests that switching trailer types and mix of freight may be a smart option for those looking to adapt to an ever-changing freight marketplace.

“We’re seeing a lot of motor carriers and freight brokers pivot towards the essential-haul sector by finding commodities that are a bit more insulated from the effects of COVID-19,” Howell said. “We’re encouraging that type of open-mindedness and flexibility if it’s an option.”

If it’s not, Howell recommends reaching out to Reliance Partners for guidance on finding a policy that best equips your company to navigate these uncertain times.

Reliance Partners is one of the nation’s fastest-growing insurance companies specializing in risk management solutions for the transportation and logistics sectors. Founded in 2009, the Chattanooga, Tennessee-based insurance brokerage and consultancy also serves the hospitality and manufacturing industries.

“Our responsibility is to educate our clients and to let them know what resources are available to them,” Howell said. “For instance, we keep our clients up to speed on programs like the Paycheck Protection Program (PPP) so they know how to leverage the tools that are being issued to their specific company sizes.”

Reliance Partners President Chad Eichelberger also addressed COVID-19’s effects on insurance markets in a recent interview with FreightWaves. He recommended that trucking companies carefully consider their strategies for the coming months and suggests companies with upcoming policy renewals consider options most suitable to the fluctuating market conditions.

“Reliance Partners is happy to give anyone feedback on the policy that they’re on,” Eichelberger said. “When we calculate risk, we look at the size and growth of your fleet, your radius of operation, where you’re domiciled, and of course safety factors.”

“Generally speaking, we can look at an account in a few seconds and have a good idea of whether you’re in the market with the most appropriate fit or the most flexible from a financial standpoint.”

Jack Glenn

Jack Glenn is a sponsored content writer for FreightWaves and lives in Chattanooga, TN with his golden retriever, Beau. He is a graduate of the University of Georgia's Terry College of Business.