-  Source: Canva/NSTA

Source: Canva/NSTA

Recently, the cost of nearly everything in school bus operations keeps going up, and often this includes your insurance premiums. Unfortunately, the big yellow bus has become a target for insurance claims of all varieties, so operators must be both vigilant and aggressive in managing your insurance needs.

Some insurance agents/companies can try to box you in by giving you an estimate for next year and allowing only 20-30 days - before requiring you to agree to it. This is a common ploy that insurance agents frequently use, as it does not give you enough time to review other proposals and carriers. The truth is that even if you do have time to complete a thorough review, sometimes it is hard to get loss runs from your current insurance company that allows you to shop your coverage.

To combat this, operators must be available to talk with your agent well ahead of your policy expiration date. If you receive feedback from them that your rates may increase more than expected, it becomes wise to start the process to put your insurance out to bid sooner rather than later.

Nuclear or run-away verdicts/settlements continue to make headlines, and the story is usually around the court system being sympathetic to the victims, as well as the employer/insured being at fault.

Though, sometimes it is not the court system being unreasonable, but rather the way the insurance company managed the case. Not being willing to assign counsel until the last minute, because they perceived the case would settle, and some cost savings could possibly accrue.

Another problem can arise when counsel is assigned based on their location or availability, and not based upon whether counsel are experts in this type of incident.

Even though it may not seem to make sense, lesser claims are also an opportunity to take stock of what is happening with your policies. Closed claims cannot grow, but dollars spent are always dollars spent and can have a cumulative effect. Also remember, future premiums are based not only on losses but on frequency of claims, and insurance companies make business decisions around their company needs not yours.

Unfortunately, insurance companies do not see the day-to-day grind of finding drivers and repairing buses like you do. Overall, it is important to remember that insurance companies are interested in their bottom line: if they can settle a claim sooner rather than later it costs them less in labor, and they have an opportunity to increase rates because rates are based on exposure and frequency.

The insurance industry has many reputable agents, claims adjusters, and producers that can be helpful as you navigate this mine field. Remember that these folks are advisers, and they do not incur any of the risks associated with your operation. The insured (you) continues to make the decision to put the bus/driver on the road and taking the operational risk, so perhaps it is better to internalize a little of the exposure. One way to do this would be to increase your deductible and take on some of the risk yourself.

Also, if you encounter an incident or claims situation, do not just completely turn your claim over to the insurance company and expect it to be taken care of adequately. If your company is a large enough operation, consider hiring a claims manager internally to keep track of these complex situations.

If you are not comfortable with risk, become the squeaky wheel and insist on knowing everything about every claim, and making sure you are consulted on all major decisions with the claims. Embolden your safety people and owners to push back on what claims situations may not make sense and ensure all your vehicles are properly accounted for in your policy. Take collision coverage off older vehicles, because if your vehicle is damaged it will more than likely be totaled and the value on the books is negligible.

Overall, remember the yellow bus can become a big yellow target, and there are opportunities, through risk management, where you can control, to an extent, the cost of your insurance premiums.

I welcome your feedback, please reach out to me at president@yellowbuses.org on this topic or anything else that may interest you.

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