I love a great deal. Who doesn’t? Most of us feel good when we’ve saved money on a purchase.

Buying at the lowest price works when you’re purchasing something that has the same value no matter who’s selling it – like diesel fuel for your trucks. Diesel fuel is diesel fuel just about anywhere you buy it.

However, buying trucking insurance only on the basis of price doesn’t make sense. What you pay for in insurance and what you get back in value can differ significantly from one insurance company to another. As a result, what initially seems like a fantastic price could actually cost you more than you bargained for.

Poor claims service

When you make an insurance claim, you’re likely operating for a time without the equipment involved in the claim – equipment that’s vital to your business. For many, that’s a stressful situation. Insurance is supposed to provide peace of mind that your situation is only temporary and that you will quickly continue operating as you did before making that claim.The last thing you need is an insurer that creates uncertainty.

An insurer that pitches its product solely on price is often a provider that focuses only on general commodity types of insurance, such as homes and cars, and then gets lured to trucking insurance by its relatively higher premiums. As general commodity insurers, these inexperienced trucking insurers tend to take a cookie-cutter approach and are not focused on your true business needs, such as avoiding downtime and getting your vehicles back on the road quickly. The cost to you in uncertainty and lost revenue can have real implications on your operations and your bottom line.

Bad lawsuit management

When one of your drivers gets into an accident, especially in the U.S., chances are you’re going to get sued. One of the most important things to you in your trucking insurer is its ability to fight those lawsuits and defend you effectively.

Not surprisingly, insurers without adequate experience in managing U.S. trucking claims tend to manage these lawsuits poorly, often paying out settlements at unnecessarily high levels. Keep in mind that this unnecessarily large loss goes on your record and will follow you around for years to come – a loss that could have otherwise been a much lower, fair value settlement if handled by a trucking insurance specialist. This bigger loss can subsequently make you look like a riskier client, and subject you to a higher insurance price in the future – something that can adversely affect your bottom line.

Helping you to avoid claims in the first place

Insurance companies that specialize in trucking also know what you can do operationally to reduce your losses. Gaining access to this information is an important return on your insurance dollar.

Loss control and safety strategies implemented with the help of an experienced, knowledgeable trucking insurance company can identify problems and prevent losses before they happen. The benefits of an effective loss control and safety program – longer equipment lifetime, less equipment downtime, improved driver retention, uninterrupted service for your shipping customers – have far-reaching effects on your bottom line.

Inexperienced insurers looking to gain quick market share typically don’t specialize in trucking, so they can’t provide these services to help you reduce losses. To do so requires outsourcing to safety and maintenance consultants – something you have to add on to your total costs.

Price matters – but only to a point

A low trucking insurance quote can sound good on the surface. But when you consider the costs of poor claims service, the lack of proactive loss control measures and a poor loss record that will follow you around for years to come, it actually ends up costing you much more in the end.

This is not to say that price doesn’t matter – it does. As a fixed cost of doing business, insurance clearly affects your bottom line.

This makes it all the more important to know the value your business is getting from what you invest in insurance premiums. It’s not just about the upfront costs. It may seem tempting to buy trucking insurance on price alone. After all, many people purchase car and home insurance that way, as the differences between one auto insurer and another are much more subtle than in trucking insurance.

However, insurance for your trucking business is entirely different. The quality of your trucking insurance can make the difference between a consistently well-run, profitable operation today and in the future and a short-term upfront price break that can lead to bottom line losses for years to come.

– Mark J. Ram is president and CEO of Markel Insurance. Please send your questions, feedback and commentary about this column to letstalk@markel.ca. For more information visit www.markel.ca.