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And welcome to another episode of the trucking risk and insurance podcast, where we talk about trucking, trucking risk and trucking insurance. So with that, Mr. John Farquhar, my cohost, take it away. Thanks Chris. I can do it. So we have a special guest today. I don't know if you know who she is. She's she's a nice lady. Her name is Lisa arsenal and she's with Stabler insurance. And interesting enough, Lisa has been in the industry 35 years, but it's only 36 years ago. Mazing. Amazing. I wanted them. I want to know what you're doing. I want to know what you're doing. How do you stay so young, Lisa? You know what filters are wonderful. I'm not going to like this in person meetings when we get back to it. No, no, no, no. So anyway, so we're going to talk about some insurance stuff today. Chris, I was going to say, we've gotten back to in person meetings, Lisa, I saw you just a few weeks ago and then an in person event. And then we had to go play whack. W w I can't say that we had to go play golf. Had to go play golf. Yeah. Well, funny enough, during the pandemic in 2020, and of course this year as well, the only way I got to do anything in person was golf. It was with other insurance colleagues, clients, and prospects. So I think for all of the, the renewal that we'd gone through and everything golf was considered safe. And that's how I did in persons for year and a half. And Hey, it was outdoors. So it was perfect. So You got to do some things, you know, somebody's got to do the hard work Well, because the rest of us are slackers at 35 hours a week. Yeah. That's kind of an insight. If somebody didn't want to plug the cast this morning, you're a lot of casts this morning. That was funny. I seen you work 50 hours, 50, 60 hours. And then you went to work for the church company. It was drilled down to 35 and I'm like, whoa, part-timers Yeah, that's what I was asked to work. And I did it. I don't think there was a week that I actually worked 35. It was always 40 plus, just because, but anyways, we are talking about insurance today and how to game the system. Oh, So close Chris. So close. I liked the better. If, if I was a trucking company, I want to know how to game the system. You don't want to give you a system. If you're a trucking company, even the system has very negative. And why wouldn't I want to game the system? Well, because you gave a system when you gave a system, that means that you're playing outside of the rules, you're coloring outside of the box and that's not what we want for insurance. And unfortunately that's what we're S we have been seeing it's insidious to our industry. And it just seems to have become the norm more so than the exception. And the last few years, which has called for task force task forces to be created like minded colleagues in the industry to, you know, form rinks, to combat this sort of thing. And I'm happy to say that it's, it's moved the needle. Are you going to keep us in suspense or are you going to describe how it moved the needle? So, you know, sometimes when you talk, can you say a lot of words, it's kind of nice to let it rest for going in case other people want to say words I've been told, I've been told, I didn't do that enough stuff, what I'm seeing or what has been happening. And the reasons for the task force was mainly built around the facility association. For those who don't know what it is in Ontario, it's mandatory to have insurance and whenever a government body makes something mandatory, they have to provide a facility for which you can get that thing that they've made mandatory. Hence the name facility association, it is a group of insurers that must contribute to this facility association pool in order to have reserves and available money to pay claims. And it is what we call an insurer of last resort. So if regular market will not take you for any number of reasons, exposure, experience, bad exposure, bad experience, high risk, you will be sent to a facility association because of the mandatory requirement to have insurance. It was originally created more so for private passenger vehicles. And it was originally meant for people who had a history, such as DUIs, where a regular market wouldn't be wanting to offer insurance to somebody who had had it get DUI heads. The last resort you, you know, I mean, it's a good, it's a good place to be. If you need to rehabilitate your reputation, your experience things happen. You know, if you've had three or four accidents in, you know, not terrible catastrophic ones, but too many for a regular market to take you in, you need to have a facility in which to go and get insurance. So that's how it was born out. And it was really, I mean, that was the intended bit, and it was working recently. And I, I, it pains me to say this, but insurance individuals such as brokers and found that commercial trucking can benefit from the facility association in a way that is gaming the system. Now, as we know, facility association, last resort is going to be much higher premiums, three, four or five times what a regular market would offer for cars for private walls. If your vehicles Just before you go ahead, I just want to make sure that everybody heard that three, four, or perhaps five times higher than the regular market. Sorry. I just wanted to throw that in there. Well, and see here, here's the conundrum is that you are afforded the facility because it's mandatory and you have to have it and everything, but some people shouldn't be driving. And so if you had three or four accidents or two DUIs and you still have a license you're going to pay, you're going to, you're going to need to pay three, four or five times. If you've been put into a facility facility for other reasons, such as a bad loss experience, or you're going to have to pay double the amount, because you're a dump the risk for them, because you've proven that you have accidents. So, I mean, it's all it's relative. It really is. What is, what is a hardship for some of the commercial operators is, you know, they are first year operators. They have never had a CVR or a level two CVOR or their old authorities. And their only option as an owner-operator is to go to facility because our insurers over the past few years have been bit hard by new businesses coming in. And they're either what we call chameleon accounts, or they're sliding out from a bad, CVOR getting a new one and think of more, I'm going to start fresh again, but it's the same guy. And so our insurers can't really tell the good guys from the bad guys, not on paper. So they made the decision, the business decision to say, if your CVR has not been enforced attached to an insurance policy in the last three years, you're not getting insurance from either. And they had to do that to protect themselves and to protect their capacity, third, their capital and their clients that they have on their own books. So that's where I feel the hardship is. And that's where, where I feel bad is new operators, new owner operators who want to be an entrepreneur. And actually we're the light bread of trucking from the beginning of dereg. And they cannot take it. They have to go into facility. So, and I can cite examples of a fellow Golan ourselves and new CVOR. And he was rated at $68,000 for his tractor, his trailer. Hi guys, how can these guys afford such a premium where we're Complaining And, and that's the thing most of the fellows that come to me and I have to tell them that, that story, or give them that premium. They don't. They decide that my advice then is to lease on with a reputable fleet, with a really good operating record and a great onboarding and all through a mentorship. And all of that kind of get your years there, get you three years. You could still be an owner operator. You could still own your vehicle, your juice leased under fleet, but it's giving you the experience that in three years now, you can say, I've been an owner-operator for three years. I have my own CPLR. I've been using it. It's been dormant, not, you know, tell the truth. However, you've now got your three years as a, up with a CVR. So that's, you know, but, but when we're talking about gaming, the system, those are the good guys. Those are the guys that are doing the things right. When we're talking about gaming the system. Now we're going to, we're going to talk about guys that have trucks in Ontario, which is probably the highest rated facility province in Canada operating. I think being dispatched out of Ontario that have, have been given some bad advice. Some, some advice from, unfortunately, some of my colleagues said, we'll advise them to open a company in another province, which has lower facility rates. Hence the Alberta limited companies, Nova Scotia, new Brunswick. You guys see them all the time. I'm sure when you go in and you're, you're you say, well, why are you registered in Alberta? They don't dispatch out of Alberta. All their, if to show their major models are in Ontario and then south of the border. And, but they've been advised to go there. And then they get rated out of the Alberta facility book, which is totally unfair because they're not traveling in Alberta. They're traveling in Ontario and they should be paying Ontario premiums. So what happened with the task force? Sorry, They're going to say, what are the changes? Cause you've mentioned that there's a task force. Are they tackling this, this issue? What sort of, so as of November, Sorry, can you, what is this task force? Can you explain who it is or Yes. So the facility association would get, gets money it's by other insurers. So under the taskforce are insurers who are paying it to this facility, pool, jurors, brokers, trucking associations, such as the OTA and just like-minded insurance individuals that really push the push, put the push on a facility association. So the association was there, the MTL was there. Like, you know, there's really some really great stakeholders. So what came of it was because before in facility, all you had to do was give a truck ownership and an Astra. You said, and tell them where you went and say, give me insurance. So with the taskforce and all the talking that they did and all the strides that they made November of 2020, now you must submit international field tax returns to show where you go, where your exposure is. You have to give the abstract and last experience from where you come from and your level two CDR. So now facility is acting more like an insurance company does where they're vetting you. So if you have an a, a, an Alberta limited company and all your, if to show your concentrated in miles in Ontario itself, they're going to say, you're going to get rates in Ontario. We have to rate you where your exposure is. Prior to that, there was no exposure rating Yes. And they shouldn't be on it. That taskforce was amazing. Yeah. Can we get a facility insurance, provide coverage, Can the facility association declined coverage? So it's all about the only way to drive it is with the post. Well, and that's it. And I mean, that's basically been a principle of insurance for a long time, right? I mean, you surcharge on different criteria, filed rules and rates, right? So we'll take you if, and we'll charge you this for that. So, but facility is, is like way more. So what, so I believe facilities through over to now, they've really hit, they've really done their job in Alberta. They're moving on to new Brunswick and Nova Scotia. Excellent news. Yeah. And you know, when not even, you don't have to be on the task force. You, you can even just be appropriately says, why am I getting all these calls from guys? And their lost friends are all coming out of Alberta or they're lost friends, all safe facility, Nova Scotia. So then you have a Frank conversation with the insured and say, why? Well, because my broker told me if I'm going out there and get cheaper, but now, and I'm like, so you get caught and you get, And sorry, one negative comment. It's about flipping time. The facility association, Lisa, you're the insurance expert. So if I say this incorrectly, please pipe in and, and do it say it the way it, it truthful. It's my understanding that all the regular market insurance companies pay into the facility market so that the facility can exist. And so if we're abusing the facility market, then all of us who've pay car insurance or commercial trucking insurance, whatever our rates go up to compensate. Well, the insurer has to get the money somewhere, right? I mean, it doesn't grow on trees for them. So everybody it affect everyone is paying. Right. And that's not fair. I'm sorry. No, raise your hands. If you think your car insurance rates are too high, you know, like, Yeah. But when you talk about fair, you have to, you have to think to what's fair to an insurer that hasn't had a loss ratio on your a hundred percent, 10 years. That's not fair, but they stay and they're still here. So you, you know, kind of, they're not, you know, they're not they're in it to make money as well and survive. But honestly, I don't know of any regular business that would constantly break even or lose money for 10 years that stuck around and kept doing the same thing. And our traditional truck guys had done that Well. And what some of our listeners may not appreciate is the fact that insurance companies have shareholders and those investors expect to return on their investment, a positive return. So, you know, they have people to answer to too. And, you know, let the, can we deviate a little bit and talk about, and I don't think this was planned. I know it wasn't planned. I mean, this whole conversation really wasn't planned other than we're talking about facility, but why wouldn't a trucking company go to Manitoba as an example, a province that has government run insurance after all I'm told it's way cheaper. Not anymore. That used to be the old line too, but going to the U S do you remember the guys you started saying, I'm going down to the U S their rates are so cheap. Well, I'm here to tell you they're not the same. You know, I, I have a cup, you know, some fleets that operate terminals out of the U S and I worked very closely with the us brokers. So I see the policies. I see the premiums. They're not much different than ours. Wow. And why wouldn't you go to Manitoba or a government run to keep fruit? No, they're not. And then you have to deal in commercial. You have to deal with their underlying or their primaries with their plate. Then you have to get access because your trucking company, that's doing north south, you're going to need way more than the province can provide. So now you've got another broker. Now you've got another insurer. It's not, it's not really that easy. And it's not cheaper. I understand that Those government run programs through certain provinces, those groups are much more diligent in making sure you have a location in that province other than just plates and a PO box. Well, I mean, again, stories 10 years ago, bunch of I, everybody, Ooh, let's go to Manitoba. You know, let's run out to BC and they all get kicked back to yeah, because if you physically having a PO box, isn't gonna cut it. So then they're like, oh, we've got a terminal. My brother-in-law is the resident there because you have to prove to the government that you're contributing to the, to the community. It was his, brother's a baker. And he goes and picks up mail there once a week. You know, they've got auditors, just like we do at the MTL. And they can show up spot check, and they can not going to turn off nobody's there. I was going to say the shit in his backyard. Doesn't quite make it as a terminal. Hey, Lisa, you used one phrase earlier that I, can you please define it just in case somebody doesn't know what a chameleon fleet is. Good question. Yes. Our lovely chameleon cameras. It's derived. It's derived from exactly the chameleon who changes its colors to suit its surroundings. So what they will do is I have ABC trucking. I run my, my level two up to 94%. I have no safeties in place. My SMS has got alerts all over the place. My ISS is 90. I got to get away from this. I've got to get away from this, from the name, from the history, from the, from the scores. So then he gets brother, uncle, daddy, or whoever to go in and write their CBR test, go on the articles and corporation as a director or secretary. And they are the front of the company. However, management hasn't changed vehicles, haven't changed and culture hasn't changed. So there's, our little chameleon was once a bright purple little penny over here is now a little green penny over here, but nothing's changed. And he's going to do that again. So when you're combating that as well, we'll shoot her. And I mean, and you've heard the saying, I got to see if you are your level two in my back pocket, just in case you need it. And guys, guys have to behave like that for years. Yeah. But here's the thing. The MTO now cross references bins plates. And I mean, this'll get out and then they'll get new plate. And then they'll, you know, get a different truck traded there for same model for the bits, different, like that'll happen. I'm sure. But for now we combating it through cross referencing. Cause I can tell you now our little purple penny who goes to get a CVR and there's little green penny and they compare bins or addresses or phone numbers. And they had a conditional under 94% safety violation rate, their new little green penny gets a conditional off the hop. And as we know, insurers, won't take a new venture with a conditional CPR. Right. Right. So we're to work for following the breadcrumbs and we're trying to, you know, pick them up as fast as we can and then put Smarties Dale for their next little, No, the, the MTO I think has done a great job in reducing those chameleon fleets. Cause they're watching, as you say, the trucks, the trailers, even the drivers, like when they all move from one CVR to another, that raises a flag at the MTO. And so they've done a great job in helping reduce that. I don't know that it's eliminated. Although I have to say in the last five years, I really haven't seen it anymore. No, because they diligently like, yeah, because it got word got out. If you're going to get a conditional brand new shiny with a conditional, what's the point, what's it. Why go through it now? You know what our next step is, honestly, our next step, it MTO talking to finance if done, because as you know, we're, self-reporting when it comes to Kyla metric travel, which is another gaming of the system. So we up our killer metric travel to lower our violation rate. Right. I hope I'm not teaching anybody, anything. I hope this is pretty much common knowledge, but <inaudible> but anyway, so We're going to get phone calls now. Geez. How do you do that? What did you mean by that again? No, but if we could have, if D talking to MTO, there'd be no self-reporting MTO metric travel right from the FTS. Not everybody uses it though. Those who stay in Ontario for instance, would however what's coming next year, ELD For Ontario only companies. And so it'll be interesting to see if during an MTO audit, for instance, they get those reports and start comparing those reports to, I strongly suspect they will obviously, And also to that, but we're, we're, we're starting, the discussion has been starting to go sharing data. So if, if our, if our guys would share data with their insurers, well, it's only a of time before the MTL asked for data to be shared as well. You can read that the private passenger vehicles w oddly, and, you know, pay what you need to Liberty, just pay for what you need. And we're not far off from that. And that's data sharing. Yeah. I think you're going to see that come quickly to the commercial industry. If you are truly operating a good fleet, and this is going to help reduce your insurance, why wouldn't you? Oh, for sure. Oh, absolutely. I just, I just went through a renewal where we reverse fuel and one of my fleet shared their screen and Pete speed gauge where it shows the heartbreaking, the hard left turns, all that kind of, and he was sharing the videos with my insurer partner and they were just like, wow. Like I would love to get my hands on that. And he's like, and telling me about it. The sad part is it sounds like it's a lot of effort on behalf of the motor carrier to gain the system here where if they invested half that effort into putting into place with safety programs, training processes, and managing the risk on a regular basis, they do a lot better. It would be much better. It's more up front work. It's more diligent. It's more of a responsibility, but gaming, the system is called it's all about shortcuts and Instagram suffocation as in revenue. So when you do all the things that you just talked about Yep. But it's a constant process to keep that going. Whereas if we implement good controls and best practices and just maintain that it's a lot less work down the road. Absolutely. Absolutely. And now the chameleon and it caught more and more often, and the conditional CVRs are being issued. They're going to see that I can't keep doing this because guys have done it 3, 4, 5 times before they're actually shut out. Right. That's not happening now. Stick can maybe do it two or three times, but why do it at all? And I get your point, John. I really do. I agree. And so they'll get there, you know, five times, three times, two times let's just do it. Right. Well, especially if I say three to five times more for insurance or facility, if I just clean up my ad, I could have saved a ton of money if not made money. Exactly. It's the long play. Yeah. And let's, let's be honest. They could have hired one of us, John, to help put money in our pocket And add more money. Exactly. Yeah. So, and a broker like Lisa, they could have got highly educated in this whole process. So there you go. The three here, three Should be just be hired by these patients regularly. Oh my God. I'm so glad we didn't rehearse anything because I wouldn't let that, I value the soul. We're not gaming the system. We're No, we don't want to game the system. We want to work within it. And we want everybody to do the same thing because for the 60% that are working in the system, the 40, or making it that much more expensive and harder for the 60 to go and do their day to day. Right. Yeah. Is that just an example, like, did you just pull those numbers out of the air 60, 40? Or is that a true, no ratio? It's not a statistic in my experience. I believe that it's not far off. Oh, you've shocked me in that only 60% are doing it the way it should be done. I would thought quite honestly, would have been like 80 and then the 10 or 20% were no hope. So I would, I used to be like that, Chris, honestly, you would get, you know, the renegades that thought, you know, I'm smarter than I'm the smartest person in the room and I'll never get caught and I can do this. And it used to be few and far between it used to be the exception. That's true, but unfortunately, word of mouth and being taught, like for an example, think about this even in my industry. So a broker is a seasoned broker and they've been in the business for 30 years and they are, they are tasked with mentoring and bringing up new producers. So they're working on a 21 beef fleet and they say that the shell fell out. Hold on. What's the 21 B just in case somebody doesn't know, Sorry, sorry. So they're working on a fleet basis where they don't have to report each and every driver or tractor throughout the truck, they have a fleet, but now they do have to report to their insurers, say on a quarterly basis. So say this fleet has 200 trucks. And the seasoned broker says to the younger fellow coming up, listen, when they send you their list of vehicles and drivers take off the bottom 20, the newly, the newest I'd take off the bottom 20. Then you send that into the insurance company. So the young fella believes he's being taught an SOP standard operating procedure, right? So it doesn't know any different cause, cause he's being mentored. He's being brought up, I guarantee. And from fact my own experience, I know it's being done and that's terrifying to me and that's hiding units to save premium. And when I see the 60 40 count, that's a lot of it. Hmm. Well, that's unfortunately kind of a, an approach that we've seen with mentoring, new drivers shortcut, make it quick, get him on the road as quick as possible. Give him what he needs to know just to get going and get the keys to this down the road. He goes, It's so true. So the onus is on us who have been in the industry where the right doers, the right fighters, the right thinkers. We're the ones that should be, you know, we're and we do our, I have two mentees working with me right now. And that's like, here's, I'm going to tell you what we do. And I'm going to tell you, here's what you're going to hear that other, because I mean, there's a young brokers network. They talk to each other. I do not want my mentees listening to any of that. And having that creep in to their day to day. But the younger mentees that are working for that broker, that's giving them this information. Like it's a shame for them. They don't know. They don't know what they don't know. Oh. As you say, if they are taught that way, they think it's the norm and the correct way to do it. So, you know, Lisa last word, it we're heading up on 30 minutes already. I can't believe it. She talks a lot. You can hit him later. I know you're not in the same room, but it's coming soon that I save it up. My last words would be you play games, you work a system. You don't do both. Thank you so much. Awesome. Johnny, you want to wrap this one up? You know, what do it the right way? And the return on investment will pay for itself. It'll it'll come back tenfold, but you just gotta pay it. Cheaters always, always lose. Thank you Johnny. And that's it for this week on the trucking risk and insurance podcast. Thank you to our guest, Lisa stealer insurance. Thanks Lisa. Appreciate your time. Appreciate you. And a huge thank you to our guests, Lisa Arsenault and my cohost, Mr. Johnny <inaudible>. Thanks for tuning in John of summit risk solutions. That's it for this week. If you're getting value, please like, and subscribe because it really does help the channel so much a safety dogs out. See you next week.