What is Social Inflation? It's Impacting Your Truck Insurance Cost

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Jared Flinn [00:00:18]: You're listening to the BulkLoads Podcast, your number one resource for everything bold freight trucking. Tyler Allison [00:00:28]: Hey, guys. Welcome to the Bulk Loads podcast. Today, I have, Fred Padien here with me. Fred Padilla [00:00:35]: Howdy, Tyler. Tyler Allison [00:00:36]: Jared is actually out. He's taking care of some, business in another state. So he was out this week, so we get the honor of, doing this Intro outro here for him, which is great because we get to bring on Fred. Fred has been a, a long time Veteran here at BulkLoads. We call him one of the OGs because he was, he was actually working in Jared's basement whenever he started this. So, Fred's been a part of this for a long time. He actually moved over to, our insurance arm not too long ago. So he's been over there writing some insurance. Tyler Allison [00:01:12]: Fred, do you wanna kinda talk about kinda starting here at BulkLoads? Just give a brief Brief walk through of, just your experience here. Fred Padilla [00:01:19]: Yeah. As far as that goes, I I started, out of Jared's basement. It was just Jared and I working out of the basement. We did that for oh, shoot. It felt like forever, but it was it was a Pretty short lived experience, and we were able to, get our 1st office space, a few years ago. Even then, there was still only a couple of employees coming in and out of the office. Tyler, I know you're one of those employees that stuck around, which is good to see you here still. As far as that goes, we have been moving at a very quick rate. Fred Padilla [00:01:55]: I mean, things blew up, and and, Now we've we've got this beautiful office space that that Jared has provided for. Tyler Allison [00:02:03]: Yeah. Yeah. And, Fred, you've been over at the side, you've been writing a lot of accounts, dealing with a lot of clients on that end, which is is why we wanted to bring you on today because we're actually bringing on, Jared and Larry are bringing on Drew Easton with AmWins on today. Drew has been on the podcast before. I think it was last February, he was on here talking about, some different insurance stuff. But, Fred, you deal with Drew and AmWins quite a bit. Can you kinda what what what really does AmOne's do? They're correct me if I'm wrong, but the way I understand it is, You guys kinda submit, different policies to them, and then they submit it to the underwriter, or they're actually underwriting as well? Fred Padilla [00:02:49]: Sure. So AmWins, in a way, both of the things you said are right. AmWins is a wholesale market. So A lot of times, what we'll do is we'll send a submission over to AmWins. And when we send it to AmWins, then that wholesale retailer will send it out to multiple markets. It's unique what Drew does though because Drew, heads up their, broadened pollution program Tyler Allison [00:03:14]: Oh, okay. Fred Padilla [00:03:15]: External program. So with that being said, Drew is very specific to the market market that he works with, and Drew actually has all the authority to bind and all that. Oh, yeah. It's really nice working with Drew. He has that extensive knowledge on that of the things. Tyler Allison [00:03:30]: Yeah. Drew's been, Man, he's been in the industry for 30 years now, so the dude's just a wealth of knowledge. Today, he's gonna line out a lot of stuff. He's gonna talk more on the environmental Inflation coverages, but he's also going to dive into, what we call a TRS designation and why You if you're not working with an insurance agent that has one of those designations, you need to switch or you need to look for somebody who is. And, Fred, you have your TRS designation. Can you kinda explain what that is? Fred Padilla [00:04:01]: Yes, sir. So the TRS stands for transportation risk specialist. That being said, we went through oh, gosh. It was it was long, long days. Hours and hours of Trucking. Lots of Trucking. But, Honestly, I think I learned more throughout doing this TRS, classes than I did throughout college. I mean, It was just a wealth of knowledge and then actually being able to apply this into the instances that we work with every single day. Fred Padilla [00:04:32]: So these guys with their hopper bottoms and In tankers and all these different divisions that that we're insuring, they break it down in this class or in this course, and they explain Where, you know, the the broadened pollution endorsements come in at, and that's where anytime I've ever had a question about it, I call Drew, he picks up the phone immediately, and he says, what's up? Let's let's get this figured out. And he's always real quick about actually breaking things down with me. Yeah. That's nice. Tyler Allison [00:05:00]: Yeah. That's awesome. Well, we'll kinda leave it at that. Before we jump into the episode, we're actually gonna do a truck feature. One of our bulk loads member, David Bits, Joe is going to throw that picture up on the screen. We wanna highlight him this week. I think we actually did did him on social media as well. So if you go to our Facebook page, you'll see that truck picture, or you can see it on the podcast here. Tyler Allison [00:05:20]: He's out of, Pennsylvania MDB Hauling LLC. I just show showed, you the picture, Fred. He's got a slick setup. It is. He's got that, like, Old school classic look. It is a slick rig. Fred Padilla [00:05:33]: It is a really nice rig. Honestly, if I could Insurance Trucking, we I'd be happy. Tyler Allison [00:05:38]: Well, we may hit up David after this. So Fred Padilla [00:05:40]: I might. Alright. Tyler Allison [00:05:41]: Well, without fur further ado, here is Drew Easton with Amwinds. Larry Hurt [00:05:45]: Hey, guys. Larry here with the BulkLoads podcast. Got Jared with me. Howdy. Got Drew Easton here with me. Special guest today all the way from Indianapolis. So today, we're bringing you guys an episode. Gonna be centered around insurance. Larry Hurt [00:06:01]: We got a lot of new stuff in the works And a lot of good stuff for 2024. So we wanted to bring Drew on today. Drew, I'm gonna let you explain what you do and who you are. We've had you on the Podcast before. For the listeners that haven't heard that podcast, just kinda give us a a a wide scope of who you are and what you do. Drew Easton [00:06:20]: Sure. Well, first of all, let me apologize. I've got a face for radio, So this probably doesn't translate too well, but, I am an underwriter by trade. I've been in the underwriting business for about 30 years, and we are actually a program administrator. So we have extended authority. It's proprietary authority that we have for a program that has a specific appetite that includes a lot of the risk that Well, flows rights. So we're happy to be a part of this. We are actually the underwriter. Drew Easton [00:06:45]: We're the facilitator. We're the pricer. We're all things in between as it relates to the placement of that insurance. Larry Hurt [00:06:51]: Sure. For our for our listeners that don't quite understand the relationship, Here's a quick breakdown. You know, you guys deal with us at Bulk Loads Insurance. We are the retail agent. We actually are not the underwriters. We have contracts with underwriters. Drew administers a program that we use that's really dedicated for anything that has to do with grain and feed and also fertilizer and hazmat products. Any of the tanker guys out there listening, this product fits specifically into you. Larry Hurt [00:07:20]: Talk a little bit about what makes the program unique compared to other insurance placements. Drew Easton [00:07:25]: Sure. Well, the program has a legacy of being a hazmat program where we're writing placarded loads and what have you. But over the years, We've been able to expand that to complimentary exposures, environmental risks. And what we're really driven by is that pollution component to those loads being hauled. Really doesn't matter what that commodity is. If it ends up at the wrong place, you may have a pollution of that. And so we pride ourselves on recognizing what those exposures are and trying to provide that coverage that will square out and cover those holes or those gaps or even just the generic exposures that risk has. As you mentioned, as a program administrator, think of us really as the Extended underwriting arm of a carrier. Drew Easton [00:08:02]: That's really who we are. The outsourced underwriting. And what we bring is a very unique niche. We're deep and narrow that we write environmental Business. That is it. We're not dealing with your for hire over the road Podcast to coast stuff. While we do dabble in that, and what I mean by that is we'll write a risk that may have a little bit of that exposure, But really what gets us excited are the risks that haul that bulk commodity, that haul that hazardous commodity, then again, if released requires that cleanup, That environmental exposure piece. Sure. Larry Hurt [00:08:32]: Yeah. That's great. I appreciate you clarifying that. One of the one of the main Questions that we get all the time is, you know, is my load hazardous, or why do I need the pollution liability Endorsement. You know, we we see that. We love putting it and endorsing it onto the policy. It's added protection. Can you talk a little bit about what that extra Protection on the pollution endorsement does to the policy? Drew Easton [00:08:56]: Certainly. Well, a couple of things here. When people think of hazmat or they think of environmental, they immediately look at placards. Right? Does this risk have placards? Does it have the little diamond on the side, the scary red writing, whatever the case may be? Well, that doesn't necessarily dictate that it's an environmental exposure. You're talking about recognizing what that commodity is for, first responders to recognize what's in there and respond to that release correctly. Is it foam? Is it, Water, whatever the case may be. But there are other aspects of the motor carrier, operations that create huge exposures for environmental. Specifically, bulk loads, that could be a biohazard. Drew Easton [00:09:34]: And if that's released in the wrong spot, unfortunately, the motor carrier doesn't get to dictate the response. That's gonna come from law enforcement or the 1st responders. And what you may have is thinking you have an innocuous release that now is going to cost dollars to clean up. So that's a big deal. But break it down very basically. If you've got a motor carrier that has the MCS 90 applied, so they're hauling non exempt commodities, They're crossing state lines, some of those other provisions. If they have an MCS 90, they have a pollution exposure built into that coverage form. People think of the MCS 90 as a document's gonna forward pollution coverage. Drew Easton [00:10:08]: It's gonna respond for you. They're kinda right. It will respond, But there's an indemnification clause built into that MCS 90 form that says, guess what? If me as the insurance company have to respond to clean up this event, But you don't have pollution coverage, I've got the ability to go back to the motor carrier and secure those monies, be indemnified for those monies I spent out. So, really, I look at it a couple different ways. Look at the commodity and recognize in any way can that be interpreted as an environmental BulkLoads, And if it's released as required cleanup. And then part 2, does my policy have an MCS 90? And if it does, I've gotta think long and hard if I'm going to ignore that pollution exposure. Larry Hurt [00:10:47]: So making it really simple for our our our listeners. If you're hauling grain and feet, do they need the pollution Liability endorsement? Drew Easton [00:10:55]: Conservative underwriter than I am, absolutely. I don't think there's any question you need that. Again, if that product is dropped in the wrong spot, You're not gonna be the ones dictating the cleanup. Now I can see the other side of it. You drop that in a parking lot. It's not hard to come out with a couple scoop shovels and load the darn thing back up. But can you guarantee that that's where that loss occurs? I can't. Larry Hurt [00:11:15]: That's good. Switching gears here a little bit, you know, you do a lot of of work with the MCEIF. Kind of talk about that a little bit and and, explain that To our our audience and what what that's doing in the trucking insurance world. Drew Easton [00:11:31]: Maybe put a little history on this. As an old school underwriter, I've been doing this for 30 years. When I first got started, immediately, I was thrown into courses. I was thrown into classwork, and those were provided by my in my, employer at the time. We actually had a school. I would go and attend classes and learn the nuances of insurance coverage, the risk transfer process, all of those other fun things that We took for granted back then. Flash forward to today, there aren't many insurance companies that provide that level of education. There aren't many retail agents that can afford to offer that kind of education either because it's a significant expense to have the kind of talent that can provide that level of education. Drew Easton [00:12:08]: So going back several years ago, a gentleman by the name of Tommy Rook, the godfather of truck insurance, also the son of a trucker, Great guy who said, you know what? We've got an an opportunity here to help educate insurance agents About truck insurance. And, oh, by the way, maybe we can educate some truckers about insurance agents too. So him and a couple of, his his Good close friends created the MCIEF, the Motor Carrier Insurance Education Foundation, and it has exploded into the premier provider of truck insurance education. I'm a proud member of the board, and I'm also a participating, speaker as well at a number of events. And I can't say enough about the quality of the education they provide. The talent that they have come in that speaks about insurance and the risk transfer process Is it's second to none. The events they have, it is the who's who of truck insurance. And by who's who, I'm talking motor carriers are there, Insurance agents are there. Drew Easton [00:13:09]: Carriers are there. Program administrators, wholesale Insurance, you name it. Anybody who is in remotely involved in truck insurance Attends these events. They don't wanna be left out. But the key process to that is this is an educational Inflation, so they're providing that education And the end goal is to earn a designation. The TRS, a transportation risk specialist. And in my opinion, humble or not humble, I don't know that I would feel comfortable recommending anybody do business with a retailer for truck insurance that doesn't have that TRS designation. That is critical because not only do they speak your language on the truck side, more importantly, they speak the language of insurance. Drew Easton [00:13:49]: Sure. And they're gonna help guide you. When we talk about the MCS 90, We talk about the CA 9948 pollution endorsement. They're gonna be able to guide that individual risk to recognize what those exposures are and then best address those. Sure. Larry Hurt [00:14:01]: So that t r TRS designation is is important. Drew Easton [00:14:05]: It's key. And I'm telling you, when I get submissions that come in from a number of our partners, I see that on the email. And I can tell you there's a different quality between somebody who sends it in that's got the TRS designation behind their name and somebody who doesn't. Larry Hurt [00:14:19]: Do you See a lot of submissions that come in from agents that don't specialize in trucking? Drew Easton [00:14:26]: Pardon me. We do. However, those don't tend to be really big partners for us because we're such a niche operation. But we do have Occasional submissions that come in from perhaps a larger shop where this actual producer doesn't necessarily have the technical knowledge on the transportation side, Our preference is to get that back through somebody else on the agency side that has that skill set so that we're not teaching a new language. It's not an automatic. No. But I can tell you, it starts to sound like a no pretty quick if they don't have that TRS designation or they're not a transportation specialist. Larry Hurt [00:15:00]: That's good. Truck insurance, you know, we hear all the time. Hey. My insurance renewal is going up. What's going on? I got nonrenewed. My rates are high. Can you kinda give us a little insight into what's currently happening, the current environment, and what Insurance should be expecting at renewal? Drew Easton [00:15:26]: Sure. I think first and foremost, we have to talk about what insurance is. It's the many paying for the losses of a few. We're trying to grab this big pile of money So that when losses occur, we're able to funnel those dollars back out to those folks that have the losses. You know, let's be clear. If we're getting a big pile of money from really bad risks, We better make sure that pile of money is huge because they're gonna have significant losses. But the one thing I think a lot of folks forget about specifically as motor carriers, They think that they're going to be able to dictate what their price is based on their loss experience. They can't dictate it, but they can impact. Drew Easton [00:15:59]: So the way I like to look at it is you've got all risks are on a spectrum. So you've got really good risk and really bad risks of this size in this operation. Those risks that perform well are gonna pay less than those folks that don't. So that's the correction that happens. But let's be honest, in the economy we're in right now, There's nothing that's getting cheaper to buy. Everything's going up. And a couple things that were hidden over the last handful of months that people didn't recognize is that the value of equipment was going up. So guess what? Their insurance rates are gonna go up. Drew Easton [00:16:28]: Right? They're gonna pay a greater dollar amount even though it may be the same rate. The risk that they were Insurance was more expensive to Insurance. Also, when you had losses. You had a vehicle that was down, there was downtime. You have more expensive repair rates. You have mechanics who are charging more. It was difficult with supply chain. It still kind of is to get certain parts. Drew Easton [00:16:47]: So there was a further delay. And, oh, by the way, when you got those parts, they were more expensive. So there was a compounding on all of this. So the one thing we have to recognize is that for as long as I can Can see rates are going to continue to go up. I think the better question is, what can I as a motor carrier do to mitigate that expense? And focus on being safe. Focus on reducing frequency, hiring and retaining quality drivers, educating, developing my drivers, holding them accountable. All those other things are your controllables And allow your retail agent with that TRS designation and your conciliator, your underwriter, work through the problems of the math and make sure they get you that best Premium for the exposures presented. Larry Hurt [00:17:26]: You had mentioned earlier that you would always recommend dash cams. Talk about As it from an underwriter perspective, when you see an opportunity that comes in to quote it, whether they have dash cams versus an opportunity that Agent. And what's your mindset going into that? Drew Easton [00:17:45]: Well, let's break it down first and foremost. I just flew in from Indianapolis, and I guarantee you, I was on Dozens of video cameras on the way in. Right? So the argument that I have always heard about privacy just doesn't exist. Right? I also use the analogy when I hear some Trucking, and I'm on Road Dog Radio with some frequency. When I'm on there and a trucker will call in and say, this is my place of business. I don't want a camera on me. I appreciate that. My office is a glass cube. Drew Easton [00:18:10]: That's my place of business. I don't have any privacy there. And this individual has Only for an 80,000 pound sledgehammer, I think it's appropriate for them to be viewed to some extent. Now that's the inward facing cameras. What we're talking about really are the dash games that are outward facing. My issue is if you're not using those, you're putting yourself in a very bad spot. We on the insurance side simply wanna know the facts. It's that basic. Drew Easton [00:18:38]: And those cameras, the video footage can exonerate Drivers, and we've seen that with great regularity. In fact, go Google some things on YouTube. You'll find that out there. But number 2, on the flip side of that, if we've got a motor carrier who was At fault in that loss, it allows us to mitigate that expense by trying to resolve that claim, settle it as quickly as possible without incurring a great amount of expense. And, you know, let's be clear. When we involve attorneys, things get expensive very quickly. So when we can recognize and memorialize those facts, it allows us to recognize The settlement opportunity or the deniability of that claim. And in certain jurisdictions going forward, you're gonna find that they will allow that video evidence to, Allow for summary disposition, basically Trucking out that claim that was presented against you, that lawsuit, if the video evidence Is clear and concise to prove that you were not at fault for that loss. Drew Easton [00:19:31]: So you're no longer having that interpreted by a jury. Sure. It's a little bit of a different play. So it's critical for those folks who are trying to avoid it. I would encourage you to embrace it. And I can tell you that from an insurance perspective, that question is becoming more and more frequent. And those risks that do embrace the technology, including ELD and all the other stuff that's out there, those are the folks that are gonna be on that spectrum towards the lower end of price. Sure. Larry Hurt [00:19:55]: Yeah. That's really good. Larry Hurt [00:19:58]: Another topic that we wanna cover here real quick because there's a lot of, a lot of, excuse me. There's a lot of media attention around it in the trucking space currently is predatory Trucking, And what's going on with that? Can you touch on that Agent briefly on predatory towing? Can you also touch on, what your program does for towing, and and as far as limits? Drew Easton [00:20:26]: There are a couple things that could put a motor care out of business. 1 is cargo coverage or inadequate cargo coverage because we know that's a third party coverage. They're gonna pay their Shipper, their vendor, their. The other one is towing because there are situations where not only where will the towing charge be Significant, but they also may hold the cargo hostage, basically, until you pay that bill. Some states have what's called a replevin action where they'll allow you to post a bond. The insurance carrier basically to post a bond until they negotiate that, The actual amount, so they'll release the load, but a lot of states don't honor that. So now you're stuck as the motor carrier With your insurance carrier trying to figure out how the heck you can get this property released, and, oh, by the way, you're gonna be Underwriting expenses because you're gonna charge your story. Right? All these things can factor into that. Drew Easton [00:21:16]: And recognizing that we live in a just in time world at JIT, Any delay in getting that shipment to the endpoint is critical in the motor carrier's relationship with that shipper. That constant e is tremendous. So back to the comment though, we have seen this for decades that some states are worse than others, Texas, where they will See exorbitant rates for these tows, or they'll show, unnecessary equipment was used at the scene to allegedly write the the units or whatever the case may be. So it's critical back to the cameras or what have you. It's critical to document those scenes when they occur Because often and I'm an old claims guy for back in the day as well. We would get a bill for 20 or 30 people that were out of the load, and they were gonna say they were to, re unload and reload a trailer or what have you. And we had video I'm sorry. It's photographic evidence Of these guys just sitting around. Drew Easton [00:22:09]: They weren't even really working. So we were able to take some of that expense away. But the unfortunate part is it's real. It's out there. You don't get a choice in many cases because they're gonna dispatch some other tow facility. You don't get to choose who that's going to be because law enforcement wants to clear the scene. Right? They wanna get this road back open again. So you are very much in a bad spot when that loss occurs. Drew Easton [00:22:31]: Now we in the industry are trying to make a concerted effort to improve this. There's a lot that's going on right now. It's catching the attention of a lot of people. Atri, that's ATRI, they do a lot for the transportation business. They look at all kinds of things, bottlenecks, nuclear verdicts, etcetera. This is on their agenda item right now. They're and if they either just came out with a report It's coming out. I haven't seen it yet, about predatory towing, so I'm interested to see what their findings are. Drew Easton [00:22:57]: And perhaps they may identify some of these proverbial hell holes that we talk about that that will help educate some of the motor carriers to recognize what their lanes of travel may be. Jared Flinn [00:23:04]: Hey, guys. I wanna take just a quick pause to show you, these books. If you hadn't seen already, I started 5 years ago, creating a collection of children's book called semi Sam. When my boys were little, we could not find any books on trucking. So we went ahead and started our own. These make great books to teach kids, not just about trucking, but about the value of agriculture and a lot of what our clients do. So check out Semi Sam. You can find them on Amazon. Jared Flinn [00:23:31]: Just search Semi Sam or contact us here at Bulk Loads, and we'll be happy to get them in your hands. They make great Christmas gifts, Great birthday gifts. If you have a net niece, nephew, child that, loves books, this is a great one to get to them. Again, Semi Sam, Check it out. There's 3 out on Amazon right now. Thank you. God bless. Larry Hurt [00:23:50]: Can you talk about the second half of that question about, How your program responds to the Trucking and maybe contrast that with, another insurance carrier or or what the standard is in the industry. Drew Easton [00:24:05]: I don't really wanna compare ourselves to other people, but how about if I say this? Towing is extremely important. Agent what we recognize within our program is we will provide reasonable customary tow. Now that leaves a little bit, open for discussion. Pardon me. But that allows folks to, have a better understanding of what that expense is going to be versus a small limit like $2,000 or $5,000. Let's be clear. If you get a predatory towing bill or even just a normal towing bill, It's probably be well north of $5,000. So when you see these limits out there that are rather small, even $10,000, that can easily be absorbed by these towing companies and the storage that's associated with that. Drew Easton [00:24:42]: So we recognize that. We're also very good on the claim side with the carrier, So we try to get things moved quickly. And because of that, we provide that reasonable customary coverage that is not defined as a small number. It's gonna be what's reasonable for that area And what's customer for the expense customer for the expense associated with that tow? Larry Hurt [00:25:01]: So Insurance has a $20,000 tow bill, And you review it, and it's like, that's reasonable for this geographic area. That makes sense. It's getting paid. Drew Easton [00:25:11]: Correct. Right. There's not a limit associated with that. It's reasonable and customary. Now if this this accident occurred in Joplin, Missouri, and they decided to tow it out to Los Angeles, California, I I think it's reasonable nor customary. Right? Sure. So there's limits to this, but it's within reason as defined by the terms. And we don't have issues relative to that. Drew Easton [00:25:30]: We've been working with the program for a long time, and that's never been an issue or a point of contention. Jared Flinn [00:25:36]: Here, you mentioned You're on Road Dog Radio once a month. For our our viewers, and we'll even put this on there. What when are you on there? What time so people could subscribe to that? Because, man, you're 30 years in the industry, you have a wealth of knowledge. And I think the more I I say this all the time. The more we can educate our members and our audience, we're Drew Easton [00:25:54]: all gonna benefit from it. I agree. And and what it is, it's it's on the Mark Willis Show, Road Dog Radio, which is channel 146, I believe, of Sirius Radio. What time and what date? It really fluctuates. Oh, okay. There we go. Ourselves readily available. Jared Flinn [00:26:07]: I think a lot of our guys listen to Road Dogg anyways. They may have already heard you. Drew Easton [00:26:10]: You're gonna hear us right. I'm on there with, you know, Tom and Rick I mentioned from the MCIF, and that's really our entree there. We wanna talk about insurance for the truckers. We wanna talk about from the insurance side so the truckers understand What we're trying to accomplish. You know? And and and you mentioned, Larry. I mean, how much feedback do you get when, you're presenting a new business or a renewal, And it's all about the rate. Right? Yep. Well, I want folks to be able to look at me and know that I'm one of the guys who causes that. Drew Easton [00:26:34]: Meaning, I'm developing the premium. I didn't cause the rates to go up necessarily, I'm the ones that that's developing the premium, and they have the opportunity to call in and talk about that. But we talk about everything associated with motor carriers and what's going on with them. You guys have talked Jared Flinn [00:26:47]: a lot about insurance, and I'm not an insurance guy. And, you know, I'm coming from a different perspective, but I I do represent a lot of our members and, you know, small town kid group on a farm. I've seen these small, owner operators, I mean, just scraping by to make ends meet. So you get that renewal every year. It's continuing to go up, trying to manage that. But I guess if you I'm gonna frame it this way. Where could the insurance industry have done a better job with trucking? I mean, we know there's a bunch of stuff out there, but, Man, these premiums are going up. These, you know, nuclear verdicts. Jared Flinn [00:27:19]: I mean, these guys are just getting squeezed at the the small guys. I mean, those are the people we represent on our platform. Mhmm. But, like, where, like, where has Insurance come our industry Almost failed the trucking industry for lack of better terms. Drew Easton [00:27:33]: I hate to use the term or or hear the Jared Flinn [00:27:35]: I don't wanna say failed, but couldn't have done a better job. Drew Easton [00:27:37]: But I think that's Accurate. That's the other side of it. I think that there have been some challenges, and I think it starts with the underwriting piece candidly. We have found that Some underwriters define certain risks differently than perhaps they should be. Right? So when we talk about that We're trying to put all this money in there. Then we're also trying to recognize that what money should be allocated for this risk for potential losses, that risk Social losses. The problem is when you have those insurers and motor carriers that have a level of frequency, they really haven't been paying their way. Right? So some of these motor carriers have been getting more out of the insurance industry than they were putting in, and that's part of the problem. Drew Easton [00:28:16]: But let's be real. It's not just about that. We've had unprecedented events. Nuclear verdicts. I hate to talk about that, Jared Flinn [00:28:24]: but it's Drew Easton [00:28:24]: real. As an old claims guy, I'm gonna talk about social inflation. That's the reality. What used to be a $100,000 claim is now a $300,000 claim. That's more important to me because those are everyday claims. Those are happening all the time. It's not about that great big verdict they had in Florida for $1,000,000,000. It's about the 100 to 300,000. Drew Easton [00:28:43]: It's about the $500 to $1500. All those things add up. And those daily claims, that's our working capital in the insurance world. Jared Flinn [00:28:51]: Well, we know this that I mean, The the the trucking insurance industry has suffered. I mean, the they're not coming out on top. I mean, as as these premiums are going up, they're getting paid out Just as fast. So, I mean, I I assume even the frequency of you said claims are going up. I mean, are there more claims today per, I mean, per company than Jared Flinn [00:29:10]: they were than there was 10, 15 years, 20, 30 years ago? Drew Easton [00:29:13]: It depends. We also have to think about the demographics in the operations. Our world in the transportation, what you're referring to is really commercial auto. Yeah. Commercial auto has been in the seller. You know, for every dollar we bring in, we've been paying a dollar 5. Right. And with interest rates as low as they were for a while, We were upside down for a long time. Drew Easton [00:29:29]: Right? But let's talk about the industry. Commercial auto has been redefined. We have these little gray trucks that run through our our, neighborhoods. Right? Delivering everything that we could want. We have last mile disassociated from that. We have a different type of transportation exposure than we had before. So back to your comment or question about frequency. Frequency's up, but it's different. Drew Easton [00:29:50]: Right? So when you have a metro area with a lot of these gray trucks running around, they're gonna bump Once in a while. Right? The good news is that bump use it isn't usually significant. Right? You're not you're not talking about an 80,000 pound vehicle That's Trucking something with heavy speed and force. You're talking about a package van that bumps into a parked car or mailbox or something. So it's a little bit different. But I think what we found is, yeah, the frequency has gone up post COVID. But more importantly, the dollar amounts I don't wanna say severity necessarily because The the the accident and the losses aren't more severe, but the dollars associated with them are. Everybody has a different view of what those dollars look like. Drew Easton [00:30:29]: I've been a part of a number of of cases that have gone to litigation, and you have the jury there, and you never wanna leave things in the the jury box decision. Then after that, you do a postmortem. You're talking to the jurors if they'll allow you to and figure out where their mind was. And sometimes the arbitrary thought process that these jurors have, It's crazed. They just tend to put themselves in the spot of that injured party, and they just make up things. And it's unfortunate, but it's human nature. That's just the way they function. So what we're striving for is talking about cameras, talking about better quality drivers, talking about lower frequency, talking about all those things. Drew Easton [00:31:04]: Let's try to avoid that in the 1st place because that's risk management one zero one is avoids. And if we can avoid that, we put ourselves in a better spot. And that will get back to hopefully, reduces some of that frequency that we have, but I do wanna recognize it's different now than what it was. It's a different kind of frequency. Again, we're talking about low low impact, low speed by comparison to what it was before. We had a lot more over the road exposure. Jared Flinn [00:31:28]: Okay. So I always say sorry, Larry. Like, I always think about it in this sense, and, I mean, this is my Thought process. This isn't factual, but, like, you know, back in the day, I mean, you had, I mean, a lot of your trucking companies are owner operators were farmers. Mhmm. They operated equipment. I mean, these guys I mean, they've been operating equipment since they were, You know, 5 years old. Sure. Jared Flinn [00:31:51]: So by the time they're in a truck going over the road, I mean, they just know those rigs. And it is like, today, I mean, that that that demographic is fading, You know, just with Drew Easton [00:32:00]: It is. And that's a you're touching on a totally different problem that we have. The good news about those guys back then, yeah, they had of grinding gears. Right? They were running through the transmission. They didn't have cell phones. More importantly, they didn't have 4 wheelers on cell phones. You didn't have the population density even in rural areas that we have now. And back then, it might have been a 55 mile an hour speed limit, so there could be differences there. Drew Easton [00:32:24]: It's totally different, but you're right. I think what you're hitting on or one of the things I think we ought to talk about is how do we find those Lesser experienced drivers and get them in the cab and make sure they recognize this as a career. Right? Yep. That's what we need to think about. And, unfortunately, right now, You guys and a lot of your Insurance in a good spot because if they're exempt, they can get younger drivers holding a CDL, hauling some grain. Right? That's a great training ground. Unfortunately, folks on my side, a lot of insurance companies still don't like that. They think of this as an 18 year old driver. Drew Easton [00:32:54]: This is where I think we can do a lot of good. Yeah. If we use technology for what it's intended, and that can include, you know, driver assistance As well as accountability measures. Great. We need to be thoughtful as insurance providers to help qualify these drivers. We can't have them sit on the bench somewhere until they're 21 Oh, by the way, they need 2 years of experience. So now we're talking 23. Where are they gonna come from? They've already got a career somewhere else. Drew Easton [00:33:18]: Right? So we have to Find ways to do that, and I think we're on the cutting edge of that with technology where we should be having those conversations. Trust me. I am. With every carrier we work with, how can we get Quality, lesser experienced drivers. And I don't wanna use age as the requirement because we do have some drivers that are coming in of age, but they just don't have that experience. We need to get them qualified too, but we also have to recognize it. I'm an old fart, and technology is not my favorite thing. Younger folks, technology is their thing. Drew Easton [00:33:48]: Yeah. They embrace this stuff. They can view and I don't wanna belittle this at all, but they can view driving a tractor as a video game to some sort, And they're successful with it. They can manage this a lot better than some folks like myself. They're embracing the technology. Why won't we take advantage of that? If there's not a day that goes by that I don't have this conversation with somebody, would you rather have an an inexperienced driver who's got Great past performance on his on his, MVR. Has all the tools associated with safety relative to the rig, has good oversight by, the motor carrier in his, supervisor, or would you rather have a 50 year old driver who has all the, season in the world, But can't get from here to there without getting a citation. All the experience you want. Jared Flinn [00:34:36]: Yeah. Drew Easton [00:34:36]: But I think I'd probably lean on technology in that lesser experienced driver. And that's what we're trying to get the insurance industry talked into, and I think the support's there. Jared Flinn [00:34:45]: Yeah. Super good. Larry Hurt [00:34:46]: I wanna take it back here just real quick. Can you what social inflation is. Drew Easton [00:34:52]: Social inflation is a generic term that is, basically blanketing everything out there That can increase costs. So as you talk about medical, right, the cost of medical is not cheaper today than it was before. You talk about, the marketing and the propaganda that occurs with, attorneys. They talk about, I got this big verdict that bad big verdict over here. Folks start to see the value of a dollar being different. Right? Sure. So the value of my dollar is a lot smaller than it was before, but the value that a jury may see a dollar is a lot bigger than it Insurance that injury gets exacerbated and exaggerated. So that's really what we're talking about is a bunch of other things that, circulate around an Agent, cause that event to be viewed differently and greater with a much more significant dollar. Drew Easton [00:35:38]: Sure. Larry Hurt [00:35:39]: No. It's really good. I just wanted to make sure our our audience understood what that was. You know, we talked about a lot of different topics. If you were An owner operator. Mhmm. If you were a small motor carrier, what advice would you give to that person, or or what Would you, in their shoes, be seeking out from your agent or from other resources or from the Internet? What kind of resources would you be putting in your mind and then incorporating into your business if that was you? Drew Easton [00:36:13]: I it's It's a a loaded question, but I I I think the best way to approach this is you've gotta find a key partner. And I know we've spoken about before that In my prior experience, I've had a number of motor carriers even though I wasn't a producer, I was an Underwriting. They would call me up before they made business decisions. And I think that's the thing that These motor carriers have to recognize is that, you know, an Insurance agent is more than just providing insurance. They're providing some of that business acumen that they have as a business owner. You know, they own their own renewals. They own their business. And more importantly, they can help recognize how that can impact their insurance costs. Drew Easton [00:36:48]: Right? And insurance is a huge expense for these motor carriers. They can also help them insulate themselves from loss exposures, and we talk about avoidance. If you're doing this one thing, I'll pick on a motor carrier that, we saw. They were a a grain hauler, but they had a little bit of, livestock exposure. And the key was, oh, we want this. We wanna continue doing this. Well, how much revenue are you generating from that livestock exposure versus guess what? Here's how much more premium I'm gonna charge you because of that livestock exposure. So helping them be educated about that is key, and I think that starts with looking at somebody's email handle. Drew Easton [00:37:19]: Is it TRS? Look at their business card. Is there a TRS designation on there? Because that's gonna help you prequalify that individual. But then again, as the motor carrier, delve deep into that relationship. Be more than just providing me insurance. I wanna know my I wanna know I I know my insurance provider, and I'm not a motor carrier. Yeah. So I would hope that they know that individual so they can give them guidance. The other side of this is, how many motor carriers do you see a day? Be it on the phone, email, in person. Drew Easton [00:37:49]: A lot. A lot. Unfortunately, how many motor carriers does this motor carrier operate today? 1. So in many cases, that retail agent has a lot more experience in certain aspects and facets of the operation Agent the motor carrier actually does. So lean on that. Tyler Allison [00:38:03]: Yeah. It's really good. Jared Flinn [00:38:06]: Yeah, dude. I I I love that. I think I I I guess what just keeps stirring in my mind is this Educating our Larry Hurt [00:38:12]: our group because I think some carriers can listen Jared Flinn [00:38:15]: to this and be like and I I've even heard it's like, well, my rates are going up. Who cares? I mean I like that. Yeah. Everybody's you know, if somebody else is gonna you know, the the we're having all this other stuff going on. Like, what I'm doing isn't gonna help Me, because my rates are gonna go up regardless. But you're saying the opposite. I mean, yeah, your rates I mean, the rates are gonna go up because of the group, but you still gotta, Yeah. You still gotta protect your sync. Drew Easton [00:38:39]: Spectrum. Right? Yeah. So do you wanna be on the spectrum of those motor carriers that are like you? Do the similar operation have same number of units? They look similar to you. You guys are gonna pay within this range. Wouldn't you rather pay on that lower range or the higher range? Yeah. And the funny thing is it's some very basic things can impact that premium. I can't tell you how many times we've all heard this that, oh, it's my nephew. I gotta keep him on the policy. Drew Easton [00:39:05]: But do you realize how much that nephew is costing you? Okay. Here's your net profit from that nephew, and here's your insurance premium. Those are real dollars. Are you willing to make that trade? In some cases, it doesn't make sense. In some cases, it does. But it's just those simple decisions sometimes Agent don't seem so simple, and they should be. And I know it's easy for me to say that on the side, but being that pragmatic, you know, partner, like I said, if you have a good Retail agents, that you're working with, an insurance agent, and they can be your conscience? That's huge. Why are you doing this? It's not you know, I'm not accusing you of anything, but explain to me why this makes sense from your seat. Drew Easton [00:39:43]: And so often that's impactful. And having that conversation, Making those decisions are gonna get closer to this end of the spectrum, and I can tell you that's an advantage. When you're paying less for your insurance than this competitor of yours over there, you're probably gonna get better loads. You're probably gonna look better, you know, through the FMCSA lens, which that's probably something we ought to talk about. You talk about Everybody is looking at the FMCSA Inflation on a motor carrier. You have shippers that are looking at that. They're trying to Qualify folks that they wanna give contracts to or loans to based on how they look in the eyes of the government. Because guess what? With vicarious liability, Brokerage exposures, etcetera. Drew Easton [00:40:20]: These folks can get looped in, and they wanna make sure if they're gonna be looped in, they're looped in with a good motor carrier. So we can't hide anymore like we did before. All this is out in the open, and I think those motor carriers that embrace it, that are holding themselves accountable, that are listening to good counsel from their retail Inflation, Those are the folks that are gonna continue to be at that lower end of that premium spectrum. Will the rates go up? Yep. Just not as high. Jared Flinn [00:40:45]: When I worked as a as a shipper, You know, many moons ago, I mean, over 13 years ago. To be honest, dude, we didn't look at Seeing scores. I mean, if they were if they had insurance, they had insurance, we hired them. But I wonder if that's even a selling point a carrier can do when they present to a shipper. I mean, maybe maybe that shipper because in in the grain and chicken, as long as they sent their cert in, you know, and it it it checked out. We filed it away. But Maybe that carry came in and said, hey. I have, you know, a a better safety score than the average or whatever. Jared Flinn [00:41:19]: I mean, I think that could be Pretty beneficial. Drew Easton [00:41:21]: It is. And if you're not bragging on yourself, nobody else is. Yeah. You know, if you're not pointing out the positive, that also is gonna play at the scene with that shipper to say, wait a minute. Maybe I should look at this a little bit more in-depth. Does this person have an adequate score? And it really is a differentiator, and you're right. Sometimes we have to point that out. I can tell you I've seen it numerous times and have that come back from shippers that that was part of the qualification. Drew Easton [00:41:43]: We're also seeing some other things out there. We've got Motor carriers that are being qualified or disqualified based on the limits that they can certificate. So okay. The load may be a 7.50 required load or less. Right? And they may have $1,000,000 filing posted for them, but that shipper may say, you know what? I wanna know that there was an another underwriting that happened, And I wanna see a $2,000,000 limit. So we're seeing things kind of evolve a little bit that everybody is trying to find a short circuit to qualifying. I'm not making this decision on my own. I've got all the available Inflation, not just the best, all the available information to make that decision. Drew Easton [00:42:20]: So it's different. Larry Hurt [00:42:21]: Yeah. Yeah. This is a huge a huge conversation. Yeah. I I think this is a a a great Inflation. This is the call the quality of conversation we wanna bring to our listeners and educate them. As we kinda wrap this up, Drew, if if you would just, give 1 piece of advice, like, hey. This is the one thing. Larry Hurt [00:42:45]: Nice and simple. The one thing we've got a lot of a a lot of different stuff that maybe initiatives that we want to to roll out 24 2024, what is, like, the one initiative as a motor carrier that you would be Jared Flinn [00:42:58]: Andrew, I will I'll ask this. I'll just reframe this a little away. One thing about our podcast, we've developed an ecosystem of a lot of people that are that watches the show that aren't even in trucking, but they're very intrigued about it and people that are wanting to get into it. So speak through that lens as well. Okay. Drew Easton [00:43:13]: I will say very generically, recognize in the lens. Pick your partner. It's much like picking your wife or your spouse or your husband or your girlfriend or whatever. Pick your partner. And I think nothing could be more impactful to your success, your happiness, You name it. It's all driven by picking the right partner. I have seen horrific experiences with, great motor carriers with a bad retail agent. I've seen great retail agents that have bad experience with motor carriers or insurance carriers or what have you. Drew Easton [00:43:46]: So you have to be specific in picking your partner and be thoughtful about it. And what I mean by that, and I'll bring it back to insurance a little bit, it's not always the cheapest price. Tyler Allison [00:43:54]: Yep. Drew Easton [00:43:54]: It's not always the best looking. It's not, You know, whatever the case may be, there's more to it than that. And not to be, funny when I say this, but we're truly in it for the long haul. There's nothing I like more than having a 30 year relationship With a motor carrier, there's nothing more than I like to have a retail agent that calls up and says, I remember we wrote our 1st account 25 years ago or whatever the case may be. That shows the longevity of that Inflation. And it's work. It's give and take. It's all that. Drew Easton [00:44:21]: It's accountability. You name it. It is truly Picking your partner and going into it good, bad, or indifferent. If I've got a problem with somebody, you're damn skipper. You're gonna hear from it For for me about it, and I hope they do the same with me. And that's what the partnership is. And I I can't leave without saying this. If you're a motor carrier looking for a partner, look for the TRS designation. Drew Easton [00:44:43]: That's a big start. You know it's somewhat prequalified, If that makes sense. Larry Hurt [00:44:47]: It's good for you. For those of you that don't know, about half of our agency is TRS qualified. The other half are currently going through the designation. So we're big proponents of it. We love it. It has helped us excel Our business greatly because we know that we're providing quality resources to our motor carriers, and that's what we're all about. Real quick, TRS stands for? Transportation risk specialist. Yep. Larry Hurt [00:45:12]: So look for that designation. If you do business with us, you'll see it in our emails. Again, Drew, I can't thank you enough for coming here. You've been a great partner for us, and we're looking forward to our future together. You've been great for our insureds, and that's always our our focus is making sure they have The best coverage at the most affordable price that the marketplace has to offer, and and we're accomplishing that. So thank you again. Drew Easton [00:45:35]: Yep. Thanks for the partnership. Jared Flinn [00:45:37]: Thank you, Drew. Tyler Allison [00:45:38]: Fred, what I loved about this episode is that Drew was, he was talking a lot about why people's premiums are going up, and he was using the term, Social inflation and just describing that sometimes inflation causes your premium to go up, and sometimes there's nothing you can do about it. But A lot of times, he was saying, is people don't realize that they can, lower their premiums by doing stuff, for their for their trucking company, like, looking at, the different, loss runs and the citations, kind of trying to keep those down. So I thought that was very interesting. He also said that a lot of the reasons why people, their premium was going up is simply because the value over the past couple years, the value of their, equipment was going up, which is in turn makes their, insurance premiums go up. From my standpoint, that would annoy me. I mean, it's It's good it's good that the value of the equipment is going up, but, I mean, it it I don't know. I just making everything else and your payments go up, that would kind of annoy me. But Fred Padilla [00:46:43]: That is the value of having an agent that works with drugs specifically because we can sit down with you and figure out the values. Tyler Allison [00:46:51]: Do you guys go I'm not super familiar with your his process. Do you guys do a lot of that sit down with the client and actually run through All of their, like, cap reports and say, hey. This is what we can do to help you clean up your record to get you a better premium. Are you guys doing a lot of that? Fred Padilla [00:47:07]: We do a lot of that. And then a lot of times, you know, these truckers that have gotten in the market during the COVID era, their equipment's Very highly valued. Yep. If we can adjust values to where they reflect more of what today's market looks like, which I've done a lot of that here recently, We can actually reduce premiums in a healthy way. You know, we don't wanna water down coverages. Tyler Allison [00:47:33]: Yeah. Fred Padilla [00:47:33]: But in this case, we can actually ensure Your company for what is true versus just Tyler Allison [00:47:38]: the Fred Padilla [00:47:38]: inflated balance. Tyler Allison [00:47:39]: Well, that helps. I know premiums are high high nowadays. So With that being said, we'll we'll kinda wrap up the episode piece of it here. Drew mentioned again, You know, you gotta be with an agent who has that TRS designation. Fred, as I mentioned, you do have that certification. And, basically, that means that, You're just specialized to do trucking, and you're kind of an expert in that trucking insurance side of things. So how do if somebody's watching this podcast, how do they get in contact with you? And even if they just have questions for you or just wanna send send their policy and say, hey. Can you save me any money here? Fred Padilla [00:48:13]: Yeah. So there's a couple ways. I know some guys are different, but You can either email me. My email is [email protected], or you could hit my cell phone. My cell phone number is 417 2326 055. Nice. Tyler Allison [00:48:30]: Very nice. So With that, we have, calendars, guys. We are actually we actually ran out of calendars. There's so much, traction with those. We underestimated the popularity, but we are going to place another order of calendars. So here in a couple weeks, we're getting a new shipment in. So if you have not got a 2020 For bulk loads calendars, let us know. I think Joe's gonna put the link in the description again. Tyler Allison [00:48:54]: You can click there, and you can sign up for a calendar. We'll send it Completely for free there. Also, we'll be at the Iowa Ag Expo, January 30th through the through February 1st, in Des Moines, they have a big ag expo. We'll we're sending in a couple guys. We don't actually have a booth this year, unfortunately, but we'll we'll send a couple up there. So we'd love to meet up with you. If you guys are going, attending, gonna be there, let us know so we can meet up with you. We have some swag, some exclusive items that we'll take up there to give away. Tyler Allison [00:49:26]: So excited for that. And then also, of course, Bulk Freight Conference 2024 It's coming up April 24th through 26th. Go to Bolt Freight Conference.com to get your tickets. I think the early bird is on sale until the end of this month. So after the end of this month, they are going to go up in price, unfortunately. But, Fred, you were at the conference. You were you helped work it last year. What'd you think overall? Fred Padilla [00:49:49]: Honestly, man, it was it was awesome to see all of our customers, especially the ones that I've worked with since I'd first started. Yeah. BulkLoads just come together. In the amount of times that I heard customers say, I've done business with you for 20 years, and I've never met you. It was insane. So seeing everybody build their build on their relationship was huge as far as on my end of things goes. I learned a lot myself that Yeah. Tyler Allison [00:50:12]: Me too. Knew, but I didn't Yeah. Fred Padilla [00:50:14]: You know? So That's refreshing. Tyler Allison [00:50:16]: Yeah. And this year, we're kicking it up a notch. It's gonna be, like, 5 times bigger. We'll have more educational, pieces to it. But, yeah, definitely go out and get your tickets. Other than that, I will let you know guys, we take prayer very seriously here at Bulk Loads. So if you guys have any prayer requests, if you're going through something, if your if your company is going through something, Or if you have a family member who is in need of some prayers, please email us prayer at bulk woods.com. We have some team members who pray over those, constantly and consistently, so let us know, and we'd be happy to do that for you. Tyler Allison [00:50:46]: Also, if you could, just like and subscribe. Share this podcast. It really helps us out. It helps, us get this content in front of people, who need to see it and who wants to see it. So if you could, just subscribe Podcast,