The biggest road block to success in Hotshot Auto Hauling is obtaining and maintaining affordable commercial insurance. Nothing else can happen until there is an insurance solution for a new driver or company. In the recent past obtaining coverage for a new carrier was a lock through Progressive. They were the “go-to” solution for fast, and affordable coverage. We used to joke that if a driver could “fog-a-mirror” they could get commercial coverage through Progressive. Not so any more.
The shift in Progressive’s appetite for new commercial carriers is not really a surprise. In the last 5-6 years the low cost of entry, and appeal of a light commercial (hotshot) auto hauling set-up, put a lot of non-qualified commercial “cowboys” on the road. Poorly maintained equipment, horrible FMCSA inspection records, and lots moving violations, probably yielded for Progressive a claims ratio that was unacceptable. Many of these drivers got put out of business by significantly increased renewal rates, or in some cases a denial of coverage at their annual policy renewal.
For a new hotshot carrier, there are very few insurance options, and not much competition, so rates are unsustainable, or coverage may be unavailable.
Matchpoint Auto Transport under the new insurance climate changed its operational model from a training and dispatch resource company, back to operating trucks. We now only provide training and dispatch services to drivers operating under our authority as company drivers or Owner Operators.
But the critical issue as a company driver or owner operator working with Matchpoint is still the same. Nothing can happen until there is an affordable insurance solution. So now when the question is asked, “How can I get started with Matchpoint”? The answer always starts with a question from us. “How is your driving record”?
Unfortunately, maintaining affordable commercial insurance for a hotshot trucking fleet requires a lot of discipline, and a “1-strike” and you’re out policy. We wish it weren’t so unforgiving… but with very few insurance options, operating in a dysfunctional culture of uncompliant operators, we can only accept drivers with perfect records. For every 10 potential drivers we talk with, on average only 2-3 will have driving records that qualify. In many cases the applicant doesn’t even know there’s a problem on their driving record. The speeding ticket 2 years ago, the minor accident in a Walmart parking lot, or the stop sign violation all put negatives on a driving record. Even an accident where the driver was not found “at fault” but their insurance company paid out a claim, will disqualify a driver.
We talked to 1 potential driver that claimed his driving record was good, with only a few “minor” issues. The underwriting profile for this driver revealed 2 speeding tickets and an accident in the last 3 years. Adding that driver to our policy with no new equipment would have raised our premiums per year over 80%.
So, the answer to the “How do I get started question?” You don’t, if your driving record in the past 35 months has any sort of blemish on it. Don’t look for equipment, don’t waste your time trying to figure out how much money you can make. The only way to “get started” is to have a perfect driving record, so either have the perfect record, or slow down and be careful, until any issues are at least 35 months back in your rear view mirror.