Guest Editorial
If you are in the collateral recovery business and familiar at all with the various insurance coverage’s your clients are requiring these two little words could spell doom to your career.
As a (retired) collateral recovery specialist after more than thirty years in the business and as a (not retired) insurance agent since 1991, I feel I can speak with some experience about the problems associated with acquiring and keeping those comprehensive coverage’s that are essential to the operation of your collateral recovery business.
Research shows that presently there are approximately six insurance carriers that write legitimate coverage’s for collateral recovery specialists, and over the past seven years, some 20 carriers have stopped writing those coverage’s….why?
As an insurance agent and expert witness in litigation affecting the collateral recovery industry I am privy to many of the law suits filed in this profession. With the new Uniform Commercial Code (UCC), and the courts across the country ruling that the creditor is liable for the acts of the recovery specialists they hire, lawyers are licking their collective “chops” at the prospects of not only suing your carrier on that million dollar policy but now also being able to also sue your (deep pocket) client.
As a result, insurance carriers who are still writing coverage’s are taking an ever increasing, critical look at their policy holders. And, if you are one of those unfortunate ones who receives that cancellation or non-renewal notice, good luck on finding another carrier that will give you any consideration.
If you wish to keep that coverage it is important to know where most claims originate. Over 50% of all claims (and by far the most expensive ones) involve tow truck claims that occur during the physical act of self-help repossession. Of the six deaths occurring from self-help repossession activity where I have been involved in the litigation, all were the result of tow truck driver error. In all six cases the tow truck operator ran over the debtor, causing their death.
Have your field agents been adequately trained in the proper use and care of the tow trucks they operate? Are you hiring drivers before you have in-depth information on their driving records? Does your field agent “moonlight” by using your tow truck to recover collateral for his/her personal benefit? Does your field agent take along a friend while working assignments? Do you allow your agent to “stash” recovered collateral at a friend’s, relative, wife’s uncle’s house? Naa….I’m not going to have an accident with my girl friend in the truck. Naa…no one is going to spot that car I’ve stashed behind that shopping center.
Over the years I’ve heard it over and over again….naa, not me. And then I get a call from a collateral recovery specialist that has just received his cancellation or notice, desperate to locate other coverage’s before his clients find out and terminate his services. Sorry, you are out of business!
If you are serious about a career in the collateral recovery industry, it is imperative that you take you insurance coverage’s very seriously. Learn what those coverage’s mean, how they apply and how you can manage the risks associated with your business so that you don’t fall into the many traps that can destroy your business.
Talk to your insurance agent….ask them for advice on any questions you may have related to your coverage’s. Always run your business with two things in mind….if your tow truck goes down, you are out of business until it can be returned to service, and if your insurance is cancelled you are out of business until you can locate other coverage’s. And I can tell you from long experience that it is much easier to get that tow truck back into service from a breakdown than it is to locate new coverage’s once you’ve been cancelled or non-renewed.
One last piece of information if you didn’t already know it….those “repo” shows that might tempt you to take that unnecessary risk…. those activities are “staged”. Don’t “fall” for that crap. Such antics invite cancellation.
Be Safe,
Joe Taylor
RISC
Joe’s observation is right on. It also shows the benefit of belonging to a group, like RSIG. RSIG has been around since 1988 to insure the repossession industry. Having continuous coverage for its members due to ongoing education offered as well as vetting of the prospective member. A member does not get cancelled for a loss and rates have not been raised since 1998. While RSIG is insurance first it offers much more such as the ongoing education, a software program second to none and more. Call RSIG at 703-365-0636 to inquire about membership.
Lawsuits can also kill your insurance premiums and ability to be insured in general.