As most business owners know, their loss history is important information for any insurance company that wishes to provide a competitive insurance quote for their business. We recently obtained loss runs on behalf of a client to quote their commercial auto insurance.
We provided the updated application along with up to date loss runs to multiple carriers for underwriting review and quote. An unusual thing happened–the loss runs included each time the client had called for tow service. He used the tow service option of the same company that provided his commercial auto insurance.
Over a four year period, there were five tows listed on the loss runs. Some were for roadside service; others were for tow service after his vehicle was involved in an accident. The bottom line is that it added to the number of claims during the period, creating an impression of too much accident frequency, even though there were no major claims. Because of the frequency, many carriers declined to quote.
Underwriters from two different major insurers saw the number of tows as an indicator that the client’s vehicle maintenance program was substandard, a factor in the decision not to offer a quote.
Lesson learned: get your tow service coverage from CSAA (California State Auto Association). They are the experts–and it doesn’t show up as a “claim” on your commercial auto loss runs.