Insured,TPA, Underwriter – these are just a few of the primary titles in the fleet insurance industry. But what do they mean?
There are four key players who have various roles and responsibilities in commercial fleet insurance, but…it’s not as simple as it sounds. So today, we’re defining each role, and how they work together to develop policies for insureds.
Insured/Motor Carrier/Trucking Company/Courier – (Example: Trucking Company AtoZ)
Insureds are responsible for securing insurance coverage, managing drivers, maintaining regulatory compliance, vehicle maintenance and safety training requirements. Insureds work with insurance agents to request new coverage and/or renew a policy that is currently in place. Four traditional commercial transportation insurance lines of coverage are: (1) Commercial Auto Liability; (2) Motor Truck Cargo; (3) Physical Damage; and (4) General Liability.
Insurance Agent – (Example: Bob Anderson, Insurance Agent with Agency XYZ)
Insurance agents can access different insurance companies to help customers (insureds/motor carriers/trucking companies) find the right coverage. Agents can represent one or more insurance companies and sell their policies to insureds. Because they represent insurance companies, they manage the entire process of finding and binding coverage on behalf of the insurance company.
BIND COVERAGE – When your agent “binds a policy,” it means that they, as a representative of the insurance company, confirm that the insurance coverage is in place.
Third-Party Administration (TPA) – (Example: Close Claims TPA)
A Third-Party Administration (TPA) is contracted by the insurance company to process claims filed against the coverage that an insured has bound. For example, if a trucking company had a vehicular accident, they would call their insurance agent to report the claim. Next, the insurance agent would contact the insurance company who would then engage the TPA to make sure the claim is properly paid and closed out.
Underwriter – (Example: Insurance Company ABC)
Underwriters evaluate and analyze the risks involved in insuring drivers, cargo and vehicles. Once a risk is reviewed, the underwriter establishes pricing for accepted insurable risks. They evaluate an insured’s risk level/score before a new policy is established and at the time of policy renewal. They use specialized data-driven software (like ClearConnect Solutions’ risk scoring technology) to determine the likelihood and magnitude of a driver’s risk.
UNDERWRITING – The term underwriting means receiving money/compensation for the willingness to pay a potential risk.
While each commercial transportation insurance role embodies a unique set of responsibilities to the insurer and/or insured, it can be unclear who to consult with about a new or existing policy. We hope today’s post provided you with a more in-depth look into the Key Players in Fleet Insurance.
In our next FLEET INSURANCE 101 post, we’ll discuss “How Does the Commercial Transportation Insurance Process Work?”