Let's get right to it - What happens if you wreck your tool truck?

Here's the situation: you wreck your truck, or a tree falls on it, or someone steals it and it's burnt, or a speeding train hits you and you live to tell about it (true - we'll share the rest of the story sometime) whatever...anyway, you're pretty sure it's a total loss. It's pretty badly damaged, you can tell. Most body shops aren't equipped to repair a commercial truck, a body, and a custom interior (Rule of thumb: Double the initial estimate and triple the time they tell you, because they really have no idea what is under the carpeted or pegboard walls, and that's where things get complicated). You resign yourself to the fact that you'll have to work out of your pickup for a while until it's all sorted out. So you grab your insurance policy, and you call the number for claims, and...nothing happens. You get a voice mail, or someone says they'll get back to you, and they don't. Or they call back, but nothing is happening at the speed you need it to. Don't they know every day off your truck is missed sales? That you can't sell if you're not there? That your truck is your store? Well, Insurance ID # 4563ter63, they probably DON'T know.

The sad fact is, if you bought your insurance through your own agent, or a commercial agent who doesn't know what a tool truck is (but had lower rates), you are likely to experience some, and possibly major, frustration if you have a claim. Your agent may be the greatest guy in the world, and he may have insured your house and your car and your boat, and you may have known him for 20 years, but that's not helpful - He isn't the one who is going to handle your claim. He isn't the adjustor. You are probably going to call an 800# somewhere, and will be assigned a claim number, and an adjustor in your area will call you - maybe right away, maybe in a few days - and set up an appointment. Unfortunately what's fast in the consumer world is turtle slow when you're in need of your truck. They may have a policy of responding to claims within 72 hours - 3 days! - or even longer, even brag about it in their sales brochures. 72 hours may be perfectly acceptable if you wrecked your Taurus and they send you to Enterprise for a rental car while you wait. Everyone knows what a Taurus is, but you will be extremely lucky when they come over if they know what a tool truck is (a tool truck? My ex-brother-in-laws cousin used to sell tools...). So he comes to your truck. Commercial adjustors are used to seeing dump trucks, or cargo vans, and they have books for that. They use Black Book Guide and online resources to assess the fair market value. Problem is, these value guides are for the TRUCK only, not the interior, and usually not the body. You paid $90,000 for it, it's 3 years old, you owe $65,000, and he says it's worth $22,000. You say, "Whaaaaat?". "That's right", he says, "$22,000. Look, here it is in the book". That's impossible you say, a new one today would cost me $110,000, look again. Your adjustor at this point realizes he has to call in some help, and did he mention it will be another week? What can you do about this? Call the truck builders, ask them to put a value on it? Fine, good to know, but the insurance company still has the final word. Send them to ToolTrucks.com current ads and Sold pages, to see real world values? Yes, great, but the adjustor still has to be willing to look at these things, and they have procedures to follow. They may be trying to help you in every possible way, but company rules say we do this, and this, in this order. So you go back and forth, getting frustrated, making calls, looking for something to drive, as your business sags. Are you sweating yet? We know of one case where a distributor was without his truck for 8 weeks because they wouldn't total it even though he needed a new body and interior (Double the estimate, triple the time...). The other case in the last month was a distributor from Arkansas whose truck really was totalled, and he had to argue the settlement value up from the initial $20,000 offer to cover his $55,000 payoff, and it took a long time to do it.

Whew! Could this have been avoided? The wrecks, no, but the claim process would have gone a lot smoother if their insurance was through a tool company recommended agency. These agents go to great trouble to become a preferred vendor for a tool company. They offer special rates, complete coverage, one stop call center for the US, and promise fast settlement of claims, in exchange for a lot of business. When something happens, they know if they don't jump right on it, they could get a call from the corporate office wanting to know what is going on. They don't want to risk all that business over clumsy handling of your claim, so they take the time to educate the adjustors, and they are always on the phone (or should be), checking on the progress of the claim. They have a vested interest in making sure you are satisified, and they know you can complain to someone with power to do something about it, and this gives you leverage. Sure, the annual premium may be a little higher than your family agent, but that is probably the result of having the right insurance coverage on your truck. You might not know you need it, or want to pay for it, until you need it. So our advice to you, based on real world situations, is consider carefully your tool company preferred insurance agency, because you have their help if something bad happens. Hopefully you will never have a claim. But two or three weeks of downtime wipe out the savings from a lower premium in a hurry.

So we don't forget...our third example was insured through a familiar insurance agency, the Crane Agency. They made a couple of calls, the right adjustor got on it, and the claim is already settled. You saw the truck on our website earlier - a tornado hit it. A whole lot of things could have been a lot worse, but the truck situation was settled quickly, as it should have been. Thanks for reading our article!

Insurance 101 continued

The right insurance coverage for your tool truck is very important. We’re truck people, not insurance experts, so please check with your insurance agent for more information. We’ll cover the basics here, and point out a few things to consider when buying insurance. A magazine such as Consumer Reports is an excellent resource when selecting coverage and an insurance company, and naturally there are differences in price, or premium, for identical coverage through different companies. We also suggest you listen carefully to the recommendation of your tool company for a good insurance provider.

Truck insurance does not absolve you from legal responsibility for an accident involving your vehicle. Its role is to relieve you of the financial burden up to the limits of your policy. If your vehicle is financed, your bank or leasing company has minimum coverage requirements you must maintain as a condition of your contract.

There are three primary components to insurance coverage: comprehensive, collision, and liability/property damage. Comprehensive, or “comp”, is the component that covers incidents such as glass breakage and theft. Collision is called upon to pay for physical damage to your truck. You can purchase comp and collision with different deductibles, deductible meaning the portion you pay before your coverage takes over. The higher your deductible, the lower your premium, because you are bearing more of the cost of a repair and therefore, the risk. Liability coverage protects you from claims made by others for medical expenses and property damage to their person and assets. Liability insurance does not pay you for your damages, it's for the "other guy".

Regarding liability, most financial institutions want you to have at least $1 million in liability protection, and more is better in today’s lawsuit-oriented society. As we mentioned, liability insurance helps you pay for things that happen to the other driver. Coverage includes medical payments per person and per accident, and property damage to the other party’s property. Rather than spelling out minimum coverage for each component, most banks and leasing companies require what is called "combined single limit" liability coverage, or "CSL". Carrying $1 million in CSL liability coverage means that if you are involved in an accident, your insurance will pay up to a total of $1 million toward medical payments and property damage, however it is distributed. For example, your truck runs a red light and crashes into a $300,000 parked Ferrari, totally destroying it and breaking the driver’s arm. Your insurance provides a $300,000 check for property damage to the car and $2,000 in medical payments for the hospital bill. This situation could just as easily been reversed, but the protection would have been identical. Running a red light later in the day, your truck breaks off a $2,000 Rolls Royce emblem and the driver has to undergo a series of operations on his broken arm costing a total of $250,000, while a passenger requires $50,000 in treatment. Your insurance still pays out a total of $302,000 but for different reasons. If the total damage was $1.3 million, you are covered for up to $1 million and the remaining $300,000 is out of your pocket. Buy as much liability coverage as you can reasonably afford. Liability is the least costly coverage component of your policy. Increases in coverage add less proportionally to your premium than reducing your collision deductible.

How much does proper insurance coverage cost? Premiums are based upon such things as your driving history, cost and make of vehicle, and where you live. For example, insurance costs more in NY City than it does in rural Illinois because there are more opportunities for accidents, more traffic, and a higher crime rate. One of the best ways to determine you are not paying too much is simply to ask around. Ask the dealers in your field group, ask other distributors in your region, and ask your competition.

What about tool-company approved insurance companies? Yes, please consider their offerings carefully. We have found these are generally best for several reasons. First, because of the large group your tool company represents, approved insurance vendors will more than likely have the lowest rates for the correct coverage. Notice we write, "correct" coverage. There are certain things you need for a business vehicle, such as higher liability limits, that aren't required on a personal policy. Commercial insurance coverage is going to be written to look out for the various pitfalls that have befallen other business people in the past. Experienced commercial agents know what kind of ceverages you really need, and in what amount. It may be more expensive to purchase. It’s probably true that your personal insurance agent can offer you a lower premium, especially if you have been a customer for a long time, but take the time to look closely at the coverage. Non-commercial agents may quote you as if you’re insuring the family Suburban, not a 16,000 lb. commercial vehicle driven all day, 5 days a week. Compare apples to apples when looking at a difference in the premium.

Second, the tool company recommended insurance company is going to offer the right protection and coverage limits for your commercial environment. When they met with your tool company, the first criteria they looked at was proper and complete protection for the company’s distributors. Your tool company was able to share some of the past situations its dealers have encountered over the years, and the insurance policy was designed to protect its dealers in the event history repeats itself. Commercial insurance requirements are generally more encompassing, and unfortunately more necessary, than personal insurance coverage. Some people who see the tool company logo on the side of your truck are going to assume that if they sue you, with the "deep pockets" of a major corporation as shown in the logo on the side of your truck, the money to pay them will be there. Most people don't realize you are an independent or franchise distributor for the tool company.

Third, and the main reason we give the nod to the insurance companies your tool company recommends: they know your business. Not only do you not have to explain what a tool truck is every time you call, they will also be a big help to you if your truck is wrecked, stolen, or totaled in an accident. Your insurance agent will consider you part of a large and valuable account, and this gives you extra clout in times of need. Because of the high volume of tool dealer business, in the event pressure is needed, your agent carries more weight than an agent who has only one or two tool trucks on the books. Why is this important? One, let’s say you are involved in an accident and call an adjustor. Your truck is down and without a truck, you are temporarily out of business. The tool insurance company knows this and will probably rush the request (if not, the agent is there to push it through the system). The “outside” insurance company handles it like any other claim, which can mean waiting 24 – 72 hours before an adjustor calls or shows up. That’s considered fast enough in the consumer auto world, but not fast enough for you if you are sitting there watching your competitors gobble up your sales that should have been yours, IF you had been there. Second, there is no wholesale price guide for a tool truck. Insurance adjustors use these daily when looking at wrecked vehicles. This means your 5-year old step van, for which you paid $65,000, is going to be evaluated as if it were an empty truck with no interior, which is all that shows up in the price guides. Your truck might be worth $35,000 in the tool market but only $9,000 in the outside world. Your tool company referred and approved insurance carrier should know what your truck is really worth and make its offer accordingly, and do it quickly. Sidenote: if your truck is ever totalled, please refer your insurance company to the Sold pages of ToolTrucks.com for real world truck values.

Here's hoping you always have the right insurance coverage and never have to use it!

For more information on tool truck insurance, please visit:

www.tooltruckinsurance.com