Commercial Auto
Commercial auto is rated vehicle by vehicle, and the schedule it is rated from is a list somebody last reconciled at binding. Sold trucks, departed drivers and stale garaging territories all keep billing. Koala is not reviewing this line yet.
Koala does not review this line yet, and this page is not an offer to. Everything below describes how the line is rated and where its errors come from; none of it describes a service you can order today. Workers' compensation, in Texas, is the only review Koala performs.
The territory is the address it parks at.
Commercial auto is not rated on your business, it is rated on a list: this unit, this weight, this radius, garaged at this address. Rates move materially between territories, and the territory that applies is where the truck actually sleeps rather than where the policy is mailed. A yard that moved three years ago is still being rated from the old one until somebody says otherwise.
Commercial auto
Liability and physical damage for the vehicles your business owns, hires, or borrows, plus the non-owned exposure created when an employee drives their own car on your behalf.
What the premium is built from
- Vehicle schedule
- The list of covered units, each with a year, make, VIN and stated value. Every rating decision below is made per unit, from this list.
- Weight, use and radius
- How heavy the unit is, what it is used for (service, retail or commercial), and how far from its garage it normally operates. A truck rated for long-haul radius that never leaves the metro is paying for miles it does not drive.
- Garaging territory
- The rating territory of the address the unit is principally parked at, not the address on the policy declarations. Territories carry materially different rates.
- Physical damage symbols
- The comprehensive and collision rating assigned from the unit's original cost new. On an older unit, the premium can approach what the vehicle is worth.
Three ways this number goes wrong.
None of these is fraud, and none of them requires anybody to have behaved badly. They are what happens when a figure is entered once, under time pressure, by somebody who will never see the invoice it produces.
Error 01
The schedule outlives the fleet
Units are added to a vehicle schedule promptly, because a new truck cannot be financed without proof of coverage. They come off slowly or not at all, because nothing stops when a unit is sold. A schedule that has not been reconciled against the asset register in three years is the normal case, not the pathological one.
Error 02
Use and radius describe the business that was bound
Radius and use class are set from what you told the underwriter at binding and are rarely revisited. A fleet whose work moved closer to home, or from commercial hauling to service calls, keeps being rated on the old description until somebody asks for it to be changed.
Error 03
Physical damage keeps running on depreciated units
Comprehensive and collision are rated from original cost new and are not reduced as a unit ages. There is a point on every vehicle where the annual physical damage premium stops being rational against the actual cash value the carrier would pay, and no part of the renewal process is designed to find it.
What you can do about it today
Nothing, from Koala, on this line. What is worth doing regardless is reconciling the vehicle schedule on your declarations page against your own asset register, because units that were sold are the error you can find without any specialist help at all.
The other lines
- Workers' CompLiveYour premium is built from three numbers entered by hand: the class code each worker is filed under, how payroll is split across those codes, and the experience mod carried over from past claims. Koala rebuilds all three from the published rate tables, for employers paying premium in Texas.
- General LiabilityIn developmentGeneral liability is rated on receipts or payroll by classification and trued up at audit, and the single largest line on most contractors' audits is subcontractor cost charged at full rate. Koala is not reviewing this line yet.
- Umbrella / ExcessIn developmentAn umbrella is priced off the policies underneath it, so an overstated exposure on your general liability or auto is charged twice: once on the underlying line, and again in the factor applied on top of it. Koala is not reviewing this line yet.
One line is live. This is not it.
Koala reviews workers' compensation premium in Texas, and nothing else yet. If that is a policy you hold, a review costs nothing to ask about. If it is not, there is nothing here to buy today.