Property Not Covered

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Motor Truck CargoLoss Control and Rating
Bruce Dalrymple, President, Marine Solutions
Group Robert Guevara, VP Inland Marine,
AAIS May 25, 2005 Audio Dial 877- 326 -
2337 Conference ID 6767530
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Before We Begin

• Interactive seminar
• View PowerPoint presentation over Internet
• Hear commentary over telephone
• Raise questions verbally or by chat function
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Before We Begin, cont.

• Please adhere to antitrust guidelines
• Observe guidelines at all times
• When communicating by phone
• When using chat function
• Our presenters
• Bruce Dalrymple, president, Marine Solutions
  Group, Acworth, Ga.
• Robert Guevara, vice president for inland marine,
  American Association of Insurance Services

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Loss Control

• TYPE OF AUTHORITY
• Motor Carrier Number (MC)
• - Authorized for hire
• - Exempt for hire
• - Private
• - Freight broker
• - Freight forwarder
• USDOT number

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Loss Control, cont.

• TYPE OF CARRIER
• Truckload
• Less than truckload
• - Shippers load count
• - Driver load count

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Loss Control, cont.

• COMMODITIES TRANSPORTED
• Clothing Electronics
• Tobacco (finished) Pharmaceuticals
• Alcoholic beverages Tires
• Steel Machinery
• Oversized Shipments Automobiles
• Boats Mobile Homes
• Intermodal Shipments Haz Mat, plus others

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Loss Control, cont.

• Application verification
• FMCSA/SAFER verification

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Loss Control, cont.

• AREA OF OPERATION
• Geographic regions
• Cross borders
• - Mexico
• - Canada

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Loss Control, cont.

• AREA OF OPERATION
• High cargo theft/larceny cities
• - Los Angeles - Miami
• - New York City
• Longest haul
• Percentage of shipments over 500 miles

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Loss Control, cont.

• DRIVER INFORMATION
• Company drivers or owner operators
• Does selection process include
• - MVR checks
• - Drug tests
• - Current D.O.T. physical
• - Driving test
• - Reference checks
• - Background checks

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Loss Control, cont.

• DRIVER INFORMATION
• Wages based on
• - Mileage
• - Revenue
• - Salary
• Does driver orientation include
• - Accident reporting
• - Training for commodity transported
• - Review of D.O.T. regulations

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Loss Control, cont.

• VEHICLE INFORMATION
• Number of owner leased vehicles
• - Delivery vans/straight trucks
• - Tractors
• - Trailers

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Loss Control, cont.

• VEHICLE INFORMATION
• Type of Trailers
• - Van
• - Reefer
• - Tanker
• - Flatbed/Lowboy/Gooseneck
• - Auto-Rack

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Loss Control, cont.

• VEHICLE INFORMATION
• Trailer doors
• - Sealed
• - Locked
• GPS equipment
• Engine kill switches

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Loss Control, cont.

• TERMINAL INFORMATION
• Address
• Construction

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Loss Control, cont.

• TERMINAL INFORMATION
• Protection
• - Fire extinguishers
• - Sprinklers
• - Central station alarm
• - Fencing
• - Lighting
• - Security guards
• - Camera surveillance

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Loss Control, cont.

• TERMINAL INFORMATION
• Storage of merchandise in transit
• - Terminal
• - Docks
• - Yard

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Loss Control, cont.

• OTHER INFORMATION
• FMCSA/Safety Compliance Rating
• FMCSA/Safety Evaluation Areas (SEAs)
• Reefer units
• - Manufacturer
• - Maintenance frequency
• - Who performs maintenance
• - Smart reefers

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Loss Control, cont.

• OTHER INFORMATION
• Spotted trailers
• Unattended vehicles
• Tarping
• Load securement procedures
• Tractors have sleepers
• Gross transportation revenues for prior year
• Loss history-5 years

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Loss Control, cont.

• MARINE SOLUTIONS GROUP
• Major Reduction of Internal Expense spending
• - Cost Per Survey 150 to 275
• - Cost Per Supplement 75
• Reduction of Loss Ratio
• Application Verification
• Expertise
• IMUA Transportation Committee Membership

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Loss Control, cont.

• SAMPLE SURVEY FORMS
• AVAILABLE UPON REQUEST

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Loss Control, cont.

• Survey forms provided in Inland Marine Guide
• AAIS Inland Marine Guide
• Policy forms, rating procedures, underwriting
  guidelines
• Construction, transportation, EDP, DIC, and more
• Traditionally nonfiled classes materials filed
  where required
• Includes materials for MTC liability and
  shippers cargo
• MTC phone survey
• Word document with macros
• Word document without macros

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Rating

• MTC RATING
• Revised Rating Procedures
• New Rating Worksheets
• New Electronic Rating Worksheets

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Rating Procedure

• REVISED RATING PROCEDURE
• Rating Steps For New Coverages
• Additional Risk Modifications
• Expanded Risk Characteristics

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Rating Procedure, cont.

• PREMIUM DETERMINATION
• Per Vehicle Rating
• - Receipts 500,000 or less or
• - Less than 10 power units

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Rating Procedure, cont.

• PREMIUM DETERMINATION
• Gross Receipts Rating
• - Receipts over 500,000 or
• - More than 10 power units

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Rating Procedure, cont.

• NEW PREMIUM DETERMINATION
• Mobile Equipment, Moving Equipment, Electronic
  Equipment, And Personal Property
• Trailer Coverage

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Rating Procedure, cont.

• EQUIPMENT AND PROPERTY RATING
• Load 1.00-1.25 (per 100)
• Risk Characteristics
• - Theft Potential
• - Vehicle Protection
• - Radius Of Operations

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Rating Procedure, cont.

• TRAILER RATING
• Load .50-1.00 (per100)
• Risk Characteristics
• - Theft Potential
• - Vehicle Protection
• - Radius Of Operations

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Rating Procedure, cont.

• CURRENT RISK MODIFICATIONS
• Refrigeration Breakdown Load
• Target/Hazardous Cargo Modification
• Named Perils Modification

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Rating Procedure, cont.

• CONTINGENT COVERAGE MODIFICATION
• Mod .90-1.25 (Basic Load)
• Risk Characteristics
• - Shipments Via Subcontractors
• - Insured As Addl Named Insured
• - Written Brokerage Agreement
• - Length Of Relationship With Subcontractors

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Rating Procedure, cont.

• MODIFICATION FOR RADIUS OF OPERATIONS
• Mod .05-.50 (Premium)
• Risk Characteristics
• - Distance
• - Vehicle Data
• - Hours Driven

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Rating Procedure, cont.

• ADDITIONAL TERMINAL MODIFICATION
• Mod .05-.30 (Premium)
• Risk Characteristics
• - Construction
• - Terminal Limit
• - Occupancy Exposures
• - Disaster Exposures

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Rating Procedure, cont.

• DEDUCTIBLE MODIFICATION
• 500 1.10
• 2,500 .90
• 5,000 .80

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Rating Procedure, cont.

• RISK CHARACTERISTICS
• Good
• Average
• Bad

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Rating Procedure, cont.

• BASIC LOAD
• Radius of operations
• - Local (within 5o miles)
• - Intermediate (51 to 200 miles)
• - Long Haul (over 200 miles)

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Rating Procedure, cont.

• REFRIGERATION BREAKDOWN LOADS
• Temperature Alarms
• - Alarms Installed On Vehicles
• - No Installed Alarms

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Rating Worksheets

• NEW RATING WORKSHEETS
• Per Vehicle Rating
• Gross Receipts Rating
• Equipment/Property Rating
• Trailer Rating

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Questions?

• Use phone or chat room
• For additional questions at AAIS . . .
• BobG_at_AAISonline.com
• AlmaG_at_AAISonline.com
• SheilaM_at_AAISonline.com
• LauraS_at_AAISonline.com
• . . . and at Marine Solutions Group
• bdalrymple_at_marinesolutionsgroup.com