Insurance is too expensive – what a load of rubbish! Insurance is no more expensive these days than it was back in the early 1990s. Back in the 90s yours truly had his own truck insured for $100,000, five years claims free doing general freight and furniture and was paying around $8500 for the insurances on it.
Fast forward to 2020, we (TBI Insurance) have had clients with the same value equipment doing the same type of work and paying a similar amount as to what I was paying 30 years ago.
The only difference with insuring a truck back then is that the average new truck was around $200,000, whereas nowadays you could pay up to $400,000.
The rate your insurance is calculated at has remained the same and is calculated in the same way as it was 30 years ago. Insurance rate multiplied by the dollar value of your truck/trailer = Premium plus any penalties for high $ value or multiple claims – it really is that simple.
The real problem in the transport industry is that it has been raped and pillaged over the last 30-40 years to the point that there is no margin left to make a decent dollar. We agree that the running costs have risen astronomically with things such as rego, parts, maintenance, fuel (crikey we were paying 53 cents a litre in 1990), fines, etc, but we can assure you that the insurance rates have not.
Now that we’ve got that off our chest, let us look at how we can fix the real problem: your running costs and profit margins.
The real issues in the industry are the things that have reduced your profit margins to the point that you are cutting costs in other areas of your business (such as insurance) which could be detrimental. Your concerns should be addressing freight rates, monopolies, driver training, safety, unfair contracts, fatigue laws, over regulation of the transport industry and so on.
“Can’t be done,” you say. Well I say, “What a load of rubbish!”
The answer and solution is a lot simpler than you all may think when you understand that there are an estimated 30,000 owner operators within Australia. If you all work together, you would be one of the most powerful lobby groups in the country, and that means if you move as one you will have the power to ask and if needed, demand change for the better.
Most of the industry associations are dominated by the big end of town, however you already have an owner operators and drivers lobby group that is run by small operators and drivers like you. It’s called the National Road Freighters Association (NRFA), which has been chipping away since 2009 and has gained a seat at many of the discussion tables with the crucial government agencies that rely on your input to be able to make decisions that will be “fair to all concerned” not just the big players.
All you need to do is get behind organisations such as NRFA and support them in their fight for better conditions for you.
As for us at TBI Insurance Services, we do insurance. But we believe in the transport industry and the good people in it, so we would like to do our part to help.
TBI Insurance will pay for the first year’s membership to the NRFA for any owner operators who move their business insurance to us before 1 December 2020. If not, you can join yourself and pay an NRFA membership of $120 per annum at www.nrfa.com.au.
There is no point complaining unless you are prepared to do your bit and help fight the fight – no excuses!
Important: All answers and information contained within this article should be considered as General Advice Only. This advice should only be considered as General in Nature and its intent is only to prompt the readers to investigate their own individual insurances. It has been prepared without taking into account the readers own individual objectives, financial situation or needs. Because of that, before acting on the above advice, the client or any persons should consider its appropriateness (having regard to their objectives, needs and financial situation) and seek further independent advice from their own financial advisor.
Mark Brown is Manager at TBI Insurance Services.