SIRs work by making the motor carrier responsible for the first 25, 50, 75, or 100K of each claim. This puts some “skin in the game” for you as a carrier. Since you are taking a significant risk off the insurance company’s table you receive a large discount on your monthly premiums. Here is a real world example.

Carrier X had a yearly premium on their fleet of $278,000 for first dollar coverage. We decided to present an SIR option of 25k (which means they pay the first 25K of each claim). Their SIR premium came to $168,000 for the year, which is over $100,000 in savings for the year. The bet the carrier made was that they would have less than four claims during the year that were over 25K.

One question we get is what happens when a claim goes over $25K? The insurance carrier pays for every dollar over 25K.

How are claims handled? The insurance carrier adjusts and handles all claims from the first dollar so you are not responsible for trying to settle anything yourself. Your only responsibility is to hold the 25K in an account in case it is needed.