Colonial Surety Company has just made an announcement to their customers that they will be non-renewing their freight broker bonds leaving consumers to find a new surety bond carrier.
Like many insurance products, an insurance carrier decides to stop offering a certain product line when it is no longer profitable for them to offer it. The BMC-84 freight broker bond is a tricky surety obligation to navigate for both freight brokers and the insurance carriers which offer them.
If you'd like to replace your freight broker bond policy, you can get a free quote here; otherwise, continue reading on to learn why this is happening.
Why is Colonial Surety Company Cancelling Their Freight Broker Bonds?
Insurance tends to be cyclical in nature. When the freight broker bond was set at $10,000 and increased to $75,000 back on October 1st 2013, JW Surety Bonds was the only company in the country that was able to offer a competitive freight broker bond for the BMC-84 requirement.
A couple years had passed by, and insurance companies decided that they wanted to get in on the premium action. How do they do that exactly? They simply try to copy what we do, but come in at an even cheaper price. This happens time and time again until such a point that the premium is driven down below a place where the insurance company can actually turn a profit.
We are now seeing multiple insurance carriers change their tune on the freight broker bond and are considering discontinuing it from their product line. Those insurance carriers have not figured out the best way to adequately underwrite, and have an effective premium pricing model to keep the insurance companies/freight brokers happy with the price they are they are quoted for an annual premium.
The last issue here is the current state of the transportation industry. We are in a bit of a freight recession, that combined with financial uncertainties rippling across the entire United States has increased the claims activity on freight broker bonds tenfold. When an insurance carrier receives a claim on a bond for which they have backed, they have a duty to investigate that claim to the fullest extent of the law and respond accordingly.
The increase in claims on the freight broker bond has increased the cost to the insurance carrier which needs to investigate each one of these claims independently. Unfortunately, colonial surety insurance company is another one throwing in the towel on this line of business.
How JW Surety Bonds Can Help You
Thankfully, we have all the pieces of the puzzle together, and we are able to independently underwrite and quote your bond within hours for you. Our company writes the freight broker bond with every insurance carrier which is willing to offer it.
We are the dominant force in the entire country as over 4 out of every 10 freight brokers has a bond with JW surety bonds. Do not hesitate to get a free quote from us right away in order to keep your brokerage authority intact with the required FMCSA period.
I am also happy to say that our freight broker bond program has been unchanged for over 10 years straight. We have a consistent underwriting model and premium prices which are competitive.
We have found that if you are simply looking to find the cheapest of the cheap, you tend to get what you pay for. We offer a consistent and reliable service on the freight broker bond which you can be happy with for years.