Are the good times really over for good?

jason6541 · Jan 14, 2014

redforeman said: ↑

here's the lowdown on progressive. They aggressively ramped up their commercial vehicle market starting in 2008 or so. Their original strategy was to go after local and regional fleets (thus the radius limits that get talked about so much), thinking they'd avoid what they saw as higher risk with the otr market. A case of the guys in suits making decisions without real good, real world input.

What happened was that they ended up selling a lot of coverage to that otr market that they didn't count on. Salesmen will sell to anyone that's willing to buy. Agents will make it work for anyone. A lot of guys buying a 500 mi radius and running nationwide anyway. Some (me for example) making the radius work, sometimes grinding them for an increase in radius. They do offer unlimited mileage in some markets to some exceptionally low risk carriers.

At the same time, they also did not rate new carriers like the more established commercial insurers. They picked up a ton of new carriers with no experience or loss run history. I guess they figured they could make it work on big numbers. Around the beginning of 2012, they started aggressively increasing rates. Seems all those new customers were racking up a lot more claims than they expected. At that point, they also started cracking down on safety violations as well. What they're doing now is un-doing the high risk profile they've built over the past several years. Exorbitant premiums for new businesses. Dropping coverage on two oos violations, no matter what they are. Becoming less of an insurer of last resort.

To compound all of that, is the way progressive does business. Most insurance companies do not make all their profit on premiums minus claims. The oversimplification is: They take all their premium money into investments. Claims are an offset against investment income, not just incoming premiums. What you have at the end of all that is reduced premiums since the profit model is not entirely dependent upon them.

Progressive and very few others don't do that. They actually do offset claims directly against premiums. That makes the premiums higher and more volatile to the risk pool.

One other thing that i'll throw out there at the risk of getting this thread bounced to the political forum: In my opinion, the affordable healthcare act will be driving any and all insurance rates higher. You don't get something for nothing just because there's a law for it. These companies are in business to make a profit. If a piece of legislation forces them to offer premium service at a discount in one sector of their market, you are incredibly naïve if you think they are just going to do that without recovering their losses on other lines of insurance. Even if progressive does not offer aha legislated service, you can bet that they will be moving with market pressure created by others.
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couldn't agree more with your statement!. So very true i'm afraid, more rate increases to come. Bend over and get ready for it!.

BAYOU · Jan 14, 2014

That's one of the main reasons I switched to progressive in feb of 2008 they quoted me a rate of half what I've paid years leading up to this. My agent told me that progressive dropped him as an agent because he was running at a 65% loss for claims, even with five trucks I was only paying $32,000 a year

rank · Jan 14, 2014

BigBadBill said: ↑

I am also seeing that just like trucking companies are fighting for drivers with clean records, insurance companies are fighting for the carriers with low claims history. I was stunned at how low some qoutes came in this year.
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Yes I was stunned also when Old Republic quoted us $7,000 vs $12,000 to $14,000 that we were paying with Markell. Agent told me that Markell rates you based on your claims and tickets. Claims will jack your rates into the stratosphere plus 3 tickets in a 12 month period and they won't renew you no matter how trivial the offense....to them a ticket is a ticket. I had four in a 12 month period and three of those were in a company pickup truck for seat belt and not having the valid insurance slip (it was expired). The canceled me for that even though I was claim free and accident free.

Whereas Old Republic doesn't care so much about minor infractions so long as you don't have a claim. Hence I went from being canceled at Markell to $7,000 with the lowest rate at Old Republic. Weird.

Ridingsxrs · Jan 14, 2014

Just called progressive my 2014 insurance is 7600 for one truck one driver

BAYOU · Jan 14, 2014

Ridingsxrs said: ↑

Just called progressive my 2014 insurance is 7600 for one truck one driver
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Tell me more, your not going to get the coverage I have for that trust me.

i have a million $100,k cargo $86,000 in comp $100,k uninsured or under insured NO MILEAGE RESTRICTION!!!

I was giving a price today of $6,860 a year from lancer after doing some home work they don't right policies over 200 miles they go thru owner operator direct after calling to double check the price the first price did not have uninsured and only had a 200 mile radius.

Ridingsxrs · Jan 14, 2014

BAYOU HOTSHOT said: ↑

Tell me more, your not going to get the coverage I have for that trust me.

i have a million $100,k cargo $86,000 in comp $100,k uninsured or under insured NO MILEAGE RESTRICTION!!!

I was giving a price today of $6,860 a year from lancer after doing some home work they don't right policies over 200 miles they go thru owner operator direct after calling to double check the price the first price did not have uninsured and only had a 200 mile radius.
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Million liability, 100k cargo, 30 k in comp/collision, 100k in underinsured. Unlimited mileage. Im in kentucky and ky is a state progressive provides unlimited in

rank · Jan 14, 2014

Ridingsxrs said: ↑

Million liability, 100k cargo, 30 k in comp/collision, 100k in underinsured. Unlimited mileage. Im in kentucky and ky is a state progressive provides unlimited in
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Interesting. Is the solution as simple as changing your jurisdiction and getting a mail forwarding service?

Ridingsxrs · Jan 14, 2014

rank said: ↑

Interesting. Is the solution as simple as changing your jurisdiction and getting a mail forwarding service?
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Lol im sure you could. But i live here so i dont have to worry about it. Maybe i could rent you my address...

BAYOU · Jan 14, 2014

rank said: ↑

Interesting. Is the solution as simple as changing your jurisdiction and getting a mail forwarding service?
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That's a new one on me never heard of a mail forwarder.

Ridingsxrs · Jan 14, 2014

BAYOU HOTSHOT said: ↑

That's a new one on me never heard of a mail forwarder.
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Maybe he meant po box

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