Rancho Mesa's Alyssa Burley and Vice President of the Landscape Group, Drew Garcia, discuss optimizing landscapers’ commercial auto insurance.

Show Notes: ⁠⁠Subscribe to Rancho Mesa's Newsletter

Director/Host: ⁠⁠Alyssa Burley⁠⁠

Guest: ⁠⁠Drew Garcia⁠⁠

Producer/Editor: Megan Lockhart

Music: "Home" by JHS Pedals, “News Room News” by Spence

© Copyright 2024. Rancho Mesa Insurance Services, Inc. All rights reserved.

Transcript

Alyssa Burley: Hi, this is Alyssa Burley with Rancho Mesa's Media Communications and Client Services Department. Thank you for listening to today's top Rancho Mesa News. Brought to you by our Safety and Risk Management Network, StudioOne. Welcome back, everyone. My guest is Drew Garcia, vice president and landscape group leader with Rancho Mesa. Today, we're going to talk about optimizing landscapers commercial auto insurance. Drew, welcome to the show.

Drew Garcia: Alyssa, thanks for having me.

AB: Of course. So lawn and landscape professionals across the country have seen the direct impact of a very difficult and challenging commercial auto market. In particular, these green industry businesses who specialize in service and maintenance, which require a large fleet, have felt more of the direct market pressure. How are the large employers across the country dealing with the increase in commercial auto premiums?

DG: So couple of qualifiers for the audience, right now. When we talk about large employers from an insurance perspective, we're talking about businesses whose annual property and casualty premiums exceed about a million and a half dollars. So that would be considered a large, large employer. And we're going to be talking more about policy purchasing and policy structure versus, you know, training and GPS and telematics. So more about the policy side of things and, you know, traditionally larger employers are those ones paying over a million and a half annually and their property and casualty insurance, there's more options for them within the market so that it helps them navigate tough market conditions. So they might not be having the claims, but the market is pressing for rates to increase. The way that they offset those market swings is by taking on more upfront risk. Via a large deductible, a large self-insured retention that allows them to kind of maintain and bevel that premium increase. And, you know, obviously they've got more skin in the game from the upfront, but it provides that level and that layer so that the carrier can, you know, manage the rates a little bit easier. So from a policy side, that's how those larger employers have been able to do that. And then basically with that savings, that upfront savings, they're able to reinvest back into their safety programs and kind of double down on trying to mitigate injuries and claims in auto accidents like we're talking about today from happening in the future.

AB: Yeah. So are there similar options for midsize employers who are looking to kind of optimize their auto insurance and maybe do something similar?

DG: So and that's what we're on the hunt for. And so Rancho Mesa, our landscape and lawn care and tree care division, we focus on that middle market, which we consider 200,000 and annualized premiums, up to about a million and a half. And traditionally, no, there's been no options for businesses within that that range when it comes to how do I offset these market conditions in these increases that are being pressed upon me because the market isn't performing well, not me individually, but the market's pressing my premiums up. And fortunately, through select carriers, we've been able to kind of navigate some different policy structure to help provide some of that relief, but at the end of the day, not risk the business. You know what? If I have one big claim, am I just going to be upside down and concerned for the stability of my business? And we're not putting anybody into that position, but we want to provide options and allow somebody to become flexible with their policy purchasing and maybe take on a little bit more risk without obviously risking the entire business. But the nuance to that is to qualify, really, you're probably going to need at least more than 60 vehicles for things to start to play out and make sense.

AB: Okay.

DG: But there are options and we're trying to find more and create more opportunity for the middle market.

AB: And when you say that you're trying to create more opportunities, that's because you specialize in landscape, you specialize in the green industry. And I think that that focus, because you're so focused on that you were recently invited to present a webinar in conjunction with Wilson360, which you were addressing and the contributing factors to the rising costs of commercial auto insurance and some solutions. So what did you discuss in that webinar? Because I know that it was really popular.

DG: Exactly. So it's a pressing issue for everyone in landscape company across the country. We're not talking about a specific state or a region. We're talking about this as an issue. It's everywhere. And basically what we talked about on that webinar was why am I seeing these increases if I'm not having these claims or if I'm having these claims, why are my increases so significant? So just kind of lay out the insurance market and why carriers are needing to take these justified rate increases. And then I was providing the listeners the ability to kind of baseline their cost. How do I track my premiums and how do I know how much my auto premium increased? Because my fleet might vary year to year. We took on a huge contract. I added 12 - 15 vehicles while last year's premium was based on 10 - 12 vehicles less. So how do I really know outside of, you know, my premium increased really what is my true cost? So we provided a tool for the listeners to use and then kind of got into a little bit of the leading and lagging indicators that can contribute to auto losses and auto claims. So we highlighted a few that businesses could pass on to their safety and fleet managers to hopefully start to track some of these underlying issues to ultimately mitigate the claims from happening. And then at the very end and we kind of talked about this earlier in the podcast, some things to consider when you're evaluating your auto insurance policy, you know, are there different deductible levels I can look at? How about physical damage? Is there something I can do there with these deductibles? How old are my vehicles? Can I weigh that option on physical damage? And there are things that you can talk about with your insurance professional at renewal to try to optimize the policy. And that's a word we like to use, because traditionally I feel like the renewal is what it is and it's the same deductibles I've had for the last 15 years. Well, things have changed. And like I said, there's new opportunities within the market and those continue to emerge. So we're trying to provide those different options to our customers when it makes sense and have those conversations.

AB: You know, that's wonderful. I think a lot of our listeners are going to want to watch that webinar, so we'll put a link in the episode notes where listeners can watch the webinar on demand. So whenever they're ready to dive deep into that. Drew If listeners have questions about their commercial insurance, what's the best way to get in touch with you?

DG: Easiest way to get in touch with me is through email, and that's drewgarcia@ranchomesa.com

AB: All right. Well, Drew, thank you so much for joining me in StudioOne.

DG: Thanks again, Alyssa. Appreciate it.

AB: This is Alyssa Burley with Rancho Mesa. Thanks for tuning into our latest episode produced by StudioOne. For more information, visit us at ranchomesa.com and subscribe to our weekly newsletter.