By Samantha Wright
The largest commercial auto claims tend to be the stuff of headlines – single-occurrence accidents with multiple victims, such as a truck driver who hits a van full of family members, a church youth group, or a school bus.
The more injured individuals in any one accident, the greater the potential for a large claim. Some of the biggest claims are not for fatalities, but for people who actually survive and need round-the-clock medical care, perhaps for the rest of their lives.
“Those settlements can be huge. And rightfully so,” said Matt Domitrovich, Vice President - Broker at Worldwide Facilities, LLC, who specializes in excess auto, with a niche in the excess transportation business. “That’s what this type of insurance is for. Nobody means for these things to happen. That’s why it’s called an accident. You don’t want to see it happen. You don’t want to go through it. But if it does happen, you want to make sure you are adequately protected.”
Excess auto liability insurance offers excess coverage over an auto policy held by the insured. Coverage may be provided for owned autos as well as hired and non-owned autos.
While the claims scenarios can be gut-wrenching at times, “one interesting thing about excess is, you sit over the top of so many different carriers, you learn a little bit about everybody,” Domitrovich said. “Excess offers a bird’s-eye view of the commercial auto sector.”
Long-distance truckers for hire are the biggest customers in the excess commercial auto sector, representing more than half of the commercial auto marketplace. Other industries that need the coverage include waste haulers, contractors with large fleets, moving and storage companies, and commercial delivery services such as taxies, busses and airport shuttles.
How much excess coverage an insured needs depends on where they are hauling, what they are hauling, and their safety history.
“We look at every risk differently,” Domitrovich said. “A trucker running loads to a metropolitan area should typically be running more than in rural America where there is less traffic, with less congestion, that could lead to more accidents. No risk is the same; everybody has different needs.”
Even though safety statistics in the transportation industry have gotten continuously better, severity on claims is higher than it’s ever been. That means that almost any fleet out there should have some excess coverage.
“Because of medical costs, legal costs, the economy, and geographical regions where claims may be filed, we are seeing higher payouts than we’ve seen before. – from $1 million (on top of the $1 million claim that the primary has paid) all the way up to $100 million,” Domitrovich said.