Tony
09-16-2010, 10:31 AM
Progressive has been known for low premiums which in turn is VERY inviting to start-up companies. However, a few notes and warnings are in order.
Progressive likes to utilize STATED VALUE on their comprehensive coverages. This means that if you bind comprehensive coverage on your equipment, the maximum that they will cover is capped at the stated amount(typically minus the deductible). This can be very harmful if you have a loan on your equipment. You actual loan payoff will be higher than the amount you actually paid for your equipment due to interest, etc. Verify with your bank when electing coverage with a stated value. Make sure that the value is high enough to cover the loan at the very least.
What hurts the most in this scenario is the financial position of the purchaser. Typically when starting a new business venture, a buyer is often able to qualify for a loan for the vehicle. But after operating a short time, they are no longer qualified for an equipment loan due to lacking job history. The typical owner-operator no longer has a job history while building their new company. When an incident occurs, insurance may cover the loan on the equipment but this leaves the owner unable to replace it.
Progressive (through experiences) is typically very straightforward on cargo claims when a large scale incident occurs. For example, a recent pileup with their insured directly in the middle, was covered 100% on the cargo end. The damaged/totaled cargo vehicles were covered completely and the owners were compensated completely.
Their performance on the liability spectrum is yet undetermined at this point. Typically liability claims can take years to sort out. They normally fall to a point where all of the insurance companys "meet" to discuss an amicable agreement on claims per company. At this time, there is no opinion in this area.
Typical limitations seem by prospective purchasers of Progressive Insurance policies:
* Limitations on distance: 500 miles for startup operations. Some have seen 'unlimited' radius, but the standard offering is within a 500 mile radius of the base address.
* Cargo coverage limits: $100,000 cargo is the current maximum that an operation can be covered. Most large-scale brokers are now requiring $150,000 in cargo coverage for multi-car carriers. Supplemental (additional-) cargo coverage can typically be bound by Essex.
* Inappropriate classifications. since most of the commercial sales representatives are unfamiliar with this type of operation, they tend to quote/bind 'On-Hook' coverage. This will end with you being uncovered! This type of insurance is strictly for Tow Trucks which 'Hook' the vehicle itself. Since you will be pulling a trailer and carrying the vehicles as cargo, any claims will be denied! Verify that you have traditional "Trucking" insurance and are not being quoted Tow Truck insurance.
Start-up companies have seen some low rates on Progressive Insurance policies. They typically have some of the lowest payment plans in order to get their policy bound. VERIFY ALL COVERAGES! The low down payment typically points to something lacking on the policy itself.
OVERALL RATING (1 to 10): 5
Progressive likes to utilize STATED VALUE on their comprehensive coverages. This means that if you bind comprehensive coverage on your equipment, the maximum that they will cover is capped at the stated amount(typically minus the deductible). This can be very harmful if you have a loan on your equipment. You actual loan payoff will be higher than the amount you actually paid for your equipment due to interest, etc. Verify with your bank when electing coverage with a stated value. Make sure that the value is high enough to cover the loan at the very least.
What hurts the most in this scenario is the financial position of the purchaser. Typically when starting a new business venture, a buyer is often able to qualify for a loan for the vehicle. But after operating a short time, they are no longer qualified for an equipment loan due to lacking job history. The typical owner-operator no longer has a job history while building their new company. When an incident occurs, insurance may cover the loan on the equipment but this leaves the owner unable to replace it.
Progressive (through experiences) is typically very straightforward on cargo claims when a large scale incident occurs. For example, a recent pileup with their insured directly in the middle, was covered 100% on the cargo end. The damaged/totaled cargo vehicles were covered completely and the owners were compensated completely.
Their performance on the liability spectrum is yet undetermined at this point. Typically liability claims can take years to sort out. They normally fall to a point where all of the insurance companys "meet" to discuss an amicable agreement on claims per company. At this time, there is no opinion in this area.
Typical limitations seem by prospective purchasers of Progressive Insurance policies:
* Limitations on distance: 500 miles for startup operations. Some have seen 'unlimited' radius, but the standard offering is within a 500 mile radius of the base address.
* Cargo coverage limits: $100,000 cargo is the current maximum that an operation can be covered. Most large-scale brokers are now requiring $150,000 in cargo coverage for multi-car carriers. Supplemental (additional-) cargo coverage can typically be bound by Essex.
* Inappropriate classifications. since most of the commercial sales representatives are unfamiliar with this type of operation, they tend to quote/bind 'On-Hook' coverage. This will end with you being uncovered! This type of insurance is strictly for Tow Trucks which 'Hook' the vehicle itself. Since you will be pulling a trailer and carrying the vehicles as cargo, any claims will be denied! Verify that you have traditional "Trucking" insurance and are not being quoted Tow Truck insurance.
Start-up companies have seen some low rates on Progressive Insurance policies. They typically have some of the lowest payment plans in order to get their policy bound. VERIFY ALL COVERAGES! The low down payment typically points to something lacking on the policy itself.
OVERALL RATING (1 to 10): 5