Looking at Insurance Expenses 2024

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Several months ago, a young gentleman came to ask for my help.  He wanted to get started in the towing business.  At the time, Terrance knew nothing about towing or how it worked. He was educated and had a master’s degree in business.  I pointed him in the right direction to get started and was surprised to discover that in less than three months his business was in the black.  Terrance analyzed every step in building a business.  He bought his 1st truck and worked hard to find accounts to keep that truck busy.  Terrance tried all types of towing.  First it was motor clubs, then body shops, and a few weeks ago, he did his 1st rep.  Now he is considering private property towing.

The point is this.  Terrance uses his analytical skills to determine what type of tows he needs to do to make money.  Two days ago, he called me to discuss business strategies.  After looking at his expenses, his solution was to increase revenue to survive.  There is only one way to make money.  A person lowers expenses or raises revenue.  As Terrance looked at his expenses, he now knows there are some things you need to run your business, such as:

  1. Trucks
  2. Gas
  3. Drivers
  4. Insurance
  5. Equipment for the truck
  6. Marketing

Terrance realized lowering expenses is difficult, so he will concentrate on adding new accounts and adding revenue stream. He looked at every expense and determined they’re not going down anytime soon, so we are trying to figure out how we can address expenses and lower what’s possible.

One expense we are going to look at is insurance.  I talked to a few tow companies, and they told me they pay hundreds of thousands of dollars, have no claims, and their insurance goes up.  I had a friend in Dallas that had a million-dollar claim, and she almost lost her business because she could not find insurance.  No company should lose their business because they cannot find insurance.  You work hard for years to build a good business, and one accident makes it vanish. I am working with Terrance to see how we can lower insurance expenses. Here are a few things insurance companies face that drive up their costs:

  1. Increased Claims Costs – When the insurance company experiences higher than expected payouts for claims, they raise the rates to cover their costs. This could be due to a higher number of claims, or more expensive claims than predicted.
  2. Inflation – The increase in the cost of goods and services, including repair costs, to keep up with these raising costs, the insurance companies could increase your premiums.
  3. Changes in Risk Assessments – Insurance is based on the assessment of risk. The insurance will look at a person or business and determine the risk is higher than expected, and they will raise your premiums.
  4. Regulatory Change – Changes in government regulations can change how insurance companies operate that would increase their costs, they, in turn, pass it on to their customers.
  5. Investment Returns – Insurance invests the premiums they collect to generate revenue. If these revenues do not perform, this could cause a rate increase.
  6. Market Conditions – Competition and demand in the market can change pricing. If a company loses market share, or if the overall cost of providing insurance goes up due to market conditions, it can lead to higher rates.
  7. Reinsurance Costs – Insurance companies often purchase reinsurance to protect themselves from large losses. If the cost of reinsurance goes up it could cause an increase to your premium.
  8. Natural Disasters or Catastrophes – If there is a natural disaster such as a tornado, flood, or a fire these high claims would influence rates.

I want to avoid some of the conditions that impact expenses by self-insuring the towing industry.  My goal is to get 3,000 tow companies to join my company called The Tow Group, and I will provide them with insurance needed to cover any losses they might occur. Here is a little information about me.

In my 30 plus years in the towing industry, I have successfully done the following:

  1. Started a tow company from scratch and sold it seven years later.
  2. Started one of the largest towing associations in the U.S.
  3. Written articles for Tow Times, American Towman, and Tow Professional magazines.
  4. Taught seminars at all the major tow shows.
  5. In 2009, made the cover of American Towman magazine as towman of the year.
  6. Founder of TowTrax, a multi-million-dollar company that provides tow companies with tows.
  7. Wrote a book, Road Map to Success, about how I built my company.

I want to start something that has an impact on the industry.  With the experience and success of starting a new company, I will have 3,000 tow companies that can help but I need your help to get started too.  If you could answer the following questions for me, it would be helpful:

Question 1. Would you consider using this new company?

Question 2. Without telling me the exact amount, how much do you pay in insurance annually?

Question 3. How many claims did you file in 2023?

Question 4. Without telling me the exact amount, about how much in claims did you file in 2023?

If we can self-insure the industry, I feel we can save you thousands in insurance.  If you have an interest in helping me to get started, just let me know.  Send me an email at dan@towtrax.com, or call me at 469-774-0340.  I have a lawyer researching what is required to accomplish this and will keep you posted on the progress.

Thanks for your help and be safe out there.  We don’t want your insurance to increase.