How to ask the right insurance questions
Published:Sunday | April 10, 2011 | 12:00 AM
Insurance Helpline, With Cedric Stephens
QUESTION: I recently started to manage two tipper trucks. They are insured with two insurance companies. Because they needed insurance right away I decided not to make any changes until I had the time to shop around. One company collected the premium and gave me a cover note.
I was told that I needed to return with a few things, including a completed driver application form, in order to get the certificate. The form was filled out by the driver. He noted that he had a parking accident last year while driving another vehicle. I was unaware of this. When I returned the form the agent told me that she was not sure that she could accept the application.
After making some enquiries she said that I would have to pay an extra J$10,000. I refused. The driver said that he was under the impression that the accident was settled between the parties. My trucks have never been in any accidents and no claims were made on either company.
It is unfair for me to pay the extra money for something I was not involved in or even aware of. What happens if I am unable to find another driver who has had no accidents?
HELPLINE: Regular readers know the name of my favourite search engine. After reading your email, I googled the words: 'How to ask the right questions'. This was instead of conducting a search in my old-time library to find information about the insurance part of your question.
In 0.22 seconds I learned that my search engine had found 21.4 million results under that heading. The first item - a blog published in Harvard Business Review in May 2009 written by Judith Ross - confirmed my initial suspicions. You have asked the wrong question.
Right questions have certain qualities. Ms Ross says they "pack punch, are usually open-ended, are not looking for specific answers ... set the stage for questioners to discover their own solutions, increase their competence, their confidence, and their ownership of results".
My role in the context of the questions that you should have asked is to explain the insurance issues and link them to additional information to help you to better manage some of the risks associated with the two tipper trucks. The correct question touches subjects other than motor vehicle insurance.
The features of your tipper trucks, their laden weight and the work that they do, how well they are maintained are some of the factors that insurers use to assess risk and decide how much premium to charge truckers.
The driver's age, experience, claims, and insurance history are also important.
driver selection
The things in the last group should not be of sole interest to insurers. The safe operation of your vehicles benefits your customers, all groups of road users, and you. The fact that you only found out about the driver's accident after he completed the insurer's form tells me that you need to improve the way you select drivers.
Do you ask prospective drivers to complete application forms? Are previous employers contacted? Do you examine driver's licences to ensure they are appropriate and valid? Are questions posed about road-traffic violations, the use of alcohol and illegal drugs? Are you aware of the health status of the persons who will operate the vehicles?
These are some of the things that truck operators should know about the persons that they hire, in addition to the questions that insurers ask on driver application forms.
The search engine that I prefer can provide you with samples of application forms that trucking companies overseas use to hire drivers.
formal hiring process
Many of the heavy vehicles that are used by local truckers were made for use in North America.
Federal and state governments have made rules and regulations that govern the use of these vehicles. Drivers of heavy vehicles have to meet certain minimum standards. Selecting persons to drive similar kinds of vehicles on our narrow, winding roads requires a formal hiring process by the truck operator. When this is in place, working with an insurer should become much easier.
Insurers have the right to cancel policies whenever they feel like. When the premium was paid, your insurer conditionally accepted the insurance on your truck. After they found out about the driver's accident, they decided to make an extra charge.
If you continue to refuse to pay the $10,000, they are likely to terminate the contract. Try to compromise the issue. Agree to pay the extra premium in exchange for the two insurers' agreement to suspend coverage on the trucks since they are off the road and give you refunds.
Cedric E. Stephens provides independent information and free advice about the management of risks and insurance.aegis@cwjamaica.comSMS/text message to 812-7233