Protect What Powers You: Inside Starwind Equipment Services

Episode Transcript
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Scott Gordon (00:23):
Welcome to Placing You First, where we bring you
real conversations with industryleaders and insights you can
use right now.
I'm Scott Gordon.

Amanda Knight (00:31):
And I'm Amanda Knight, and today we're talking
about equipment protection.
Specifically, how StarwindEquipment Services is redefining
the landscape with solutionsfor physical damage and extended
service coverage.

And we're thrilled today to be joined by Randy
Glaser, president of StarwindEquipment Services, who will
help walk us through what makesthis program different and a
better option for your clients.

This is the Placing Your First Podcast from
CRC Group.
This podcast features news andinsights from a vast knowledge
base of more than 5,500associates who write more than
30 billion in premium annually.
Plus, we give you the latestinformation on what's happening
at CRC.

It's the Placing Your First Podcast.

And now the host of the podcast, Amanda Knight
and Scott Gordon.
So Randy, um let's start withthe basics.
This is a new program, right?
It's not been out and about forvery long.
So what does Starwind Equipmentoffer?
And what problem are youlooking to solve in the
equipment space?

Randi Glazer (01:36):
Hi Amanda.
At Star Wind Equipment we offerphysical damage insurance, or
PDI coverage, and extendedservice contracts, or ESC, which
contractors equipment at thepoint of sale.
Having more certainty aroundheavy equipment ownership
reduces the burden and anxietyof future repair costs.
Our target customer is anybusiness looking to purchase

(01:57):
construction or materialhandling equipment up to a half
a million dollars or less perpiece of equipment or per
policy.
This generally includes smallto medium-sized contractors or
warehouses or anyone purchasingthis type of equipment.
We run the gamut of types ofconstruction equipment we cover,
with a few exceptions.
We don't write agriculturalequipment, equipment used for

(02:18):
forestry or logging, energyequipment, cranes, recycling
equipment, equipment used forabove or below ground mining, or
equipment that is intended tobe used as rental equipment.
Rental equipment isspecifically excluded from our
policy.
Having a ceiling of a half amillion dollars per piece of
equipment in effect takes us outof the most hazardous types of

(02:38):
construction.
We write policies in the 48contiguous states, except for
California, Oregon, Vermont, andthe state of Washington.
However, because this equipmentis mobile, if a piece of
equipment makes its way to anyof those states, rest assured
the equipment is covered underour policy.
To make sure we are able tosource parts to repair

(02:59):
equipment, we do not writeequipment that will be older
than 20 years at the end of thepolicy.
It should also be noted that wedo not write equipment that is
titled or plated.
The physical damage insurancewould be covered under their
commercial auto policy.

Well, now anyone in this industry doesn't have to
be told that there are lots ofoptions out there.
So, Randy, what makes Starwinddifferent?

Scott, we can offer traditional annual
policies when equipment ispurchased outright.
However, one of our competitiveadvantages is our ability to
offer a multi-year policy onadmitted paper when equipment is
tied to a lease or a loan.
We can write the policy for thelife of the leased alone up to
60 months.
The loss payee is added to thepolicy, which makes finance

(03:42):
companies happy not having totrack down insurance coverage
for as long as our policy is ineffect.
Our policies can be written fornew or used equipment.
If the equipment is financed,we can offer a multi-year policy
and our rates are locked in forthe life of the policy.
The PDI premium can usually berolled into the customer's
financing agreement.

(04:03):
Our policies are paid in fullat policy inception.
This means the policy cannot becanceled by us for non-payment
or for any other reason.
The insured can cancel theirpolicy if they pay off their
lease or their loan early, orthey can keep it in effect.
It really is up to them.
If they sell their equipment,we can prorate the cancellation.

(04:23):
If there's a total loss, we canterminate the policy on behalf
of the insured and offer aprorated return premium.
Just like a lease or a loan,once the financing is closed, so
is our policy.
Nothing can be added to ourpolicy once it is issued.
Another nice feature is weprovide 100% actual cash value
on all equipment.

(04:44):
This is important when writingmulti-year policies.
The limit on the policy day oneshould be sufficient to pay
losses over the life of thepolicy.
This is also good for theinsured considering they receive
their entire claim payment atonce and not in pieces.
Replacement costs is paid intwo phases.
The first phase is the 80%actual cash value piece, and the

(05:07):
remainder of the loss paymentis paid after the claim rep
receives receipt that theequipment has been replaced.
This leads to longer wait timesbetween claim payments and does
not make the insured whole allat once to purchase another
piece of equipment.
We took this into account whendesigning this program.
Our coverage is the broadest inthe multi-year policy space.

(05:28):
Besides offering 100% actualcash value, our PDI policy is
designed to cover equipmentlisted on the policy if damage
is due to an unforeseen accidentdirectly resulting from a
collision, earthquake, fire,flood, hail, hurricane, loading
and unloading, mudslides,rollover or overturn, theft,

(05:53):
tornado, transit, terrorism,vandalism, vermin infestation,
or while on location or at a jobsite.
We also provide extendedservice contracts at the point
of sale.
An extended service contract isnot an insurance policy.
However, the contracts arebacked by a contractual
liability insurance policy, alsoknown as a clip.

(06:15):
Our ESC covers unexpectedcovered repairs to equipment in
the case of a mechanicalfailure.
Sometimes these plans arereferred to as extended
warranties.
However, only manufacturers canprovide warranties on products.
A warranty is included in thepurchase price by the
manufacturer for assets such asconstruction equipment,

(06:37):
automobiles, or laptops, to namea few.
Extended warranties can also beprovided by the manufacturer at
an additional cost.
An ESC acts just like anextended warranty, however,
because it's not provided by themanufacturer, it cannot be
called an extended warranty.
An ESC plan is an agreement topay for failure to recovered

(06:58):
component on covered equipment.
Just like other extendedservice contracts, Darwin's
equipment's ESC becomeseffective when the original
manufacturer's base warrantyexpires.
Although an ESC does not coverwear and tear to equipment,
depending on the plan purchased,our ESC may provide protection
for the equipment's powertrain,hydraulic system, electrical

(07:20):
system, air conditioning system,as well as many other
components according to ourmaster part schedule in
accordance with the terms andconditions.
Our equipment eligibilitymirrors our PDI appetite, except
we only write ESC on newequipment still on the dealer
lot.
Once the equipment leaves thedealer's lot, we are unable to
offer ESC.

(07:41):
We offer comprehensive masterpart schedules for our ESC plans
with options up to 5,000 hoursand 16 months with three plan
choices.
Superior, which has thebroadest coverage, Powertrain
and Hydraulics, this is ascaled-down version of Superior,
and Powertrain, which onlycovers those parts.

That all sounds amazing, Randy, but one thing
that is always on my mind whenit comes to insurance products
is the deductible I have to pay.
So talk to us a little bitabout the deductible for this
ESC plan.

Amanda, I couldn't agree more.
I'm always looking at my owndeductibles as well.
So a helpful feature of our ESCplans is they don't have a
deductible.
This helps the customer save onout-of-pocket costs.
Most finance companies willfinance the ESC into their lease
or loan.
Offering an ESC to yourcustomer can help them finance
the repairs as a way to plan forthe long-term cost of heavy

(08:39):
equipment ownership.
The primary cost that drives upprices is labor, followed by
other overhead such asutilities.
Given the rising labor costs,locking in future costs at
today's dollars makes sense forsmall to medium-sized
contractors.
And PDI and ESC can worktogether to cover claims.
Another competitive advantageand one that is unique to

(09:01):
Starwind is we utilize one claimadjuster for both products
simultaneously.
Even though we offer twoproducts at the time of a loss
of repair, we have one claimadjuster to make sure the
insured or customer is receivingthe highest level of service by
using both the policy and theplan together.

Is that unusual, Randy?

It's very unusual.
It does not happen today.
No other insurance competitoris coordinating claim payments
between an ESC plan and a PDIpolicy.
We are the very first tocoordinate these, and as we go
along, we will have data that noother insurer has access to.
How it works in real life isquite differently than how it

(09:41):
should work.
All other carriers have ESCrepairs submitted after the
repair is completed, while a PDIclaim is submitted at the time
the equipment is brought to thedealer for repair, generally
right after a claim ensues.
This is a real life example Icame across that made me
reevaluate how contractors'equipment claims should be
handled.
A very large piece of equipmentwas being hauled when it hit a

(10:05):
bump and severed the frame,rendering the equipment unable
to be towed.
A crane had to be brought in tomove the equipment off the road
to protect it.
In the meantime, a flatbed wasen route to the equipment and
another crane had to be broughtin to put it on the flatbed and
take it to the dealer.
The cost to the insured was$16,000 out of pocket.

Wow.

It was a lot.
That's a lot.
It was a lot.
When the equipment was broughtat the dealer shop, the dealer
knew right away the damage tothe frame was a known
manufacturer's defect and wouldbe covered under the ESC plan.
However, the dealer didn't knowabout the crane and flatbed
costs to help to protect theequipment, which would have been
covered under the PDI policy.

(10:46):
Once the repair was complete,the dealer notified the ESC
claim rep, but it was too lateto turn to access the PDI policy
since more than 60 days hadpassed.
If repair is taking longer thanexpected, for example, waiting
on a part to come in, we're ableto pay for any labor costs that
had been incurred up until thatpoint.
There's no reason for a dealerto be sitting on, say, 10 hours

(11:09):
of labor when they could paywhen we could pay that and wait
for any additional receipts tosettle the repair of the claim.
We understand our customersneed their equipment back as
quickly as possible so they cancontinue making money for their
business.
Every day they're at withouttheir equipment costs them time
and money.
We have made the claim processmore streamlined with less

(11:30):
friction for our insureds anddealers and more cost effective
for us.
Setting up the both claims atthe onset of any repair speeds
up the claim process by up to aminimum of two weeks or more,
thus making it easier on thedealer to release the equipment
back to their customer.
Our job is to make the customerand the dealer happy.

This sounds like a a great way to do that.
I mean, I know even just normalcar repairs seem to take longer
and longer as you know, theremay be a part that you're
waiting to be shipped or that isout of stock.
I can only imagine that formassive equipment like this,
that that may even be more of acompounded issue.

(12:10):
I would assume in someinstances it can be really hard
to get the parts or even themechanic you need to work on
that kind of equipment.

Oh my God, Amanda, that has never been more true
than right now.
The reason I started thisprogram was because I saw
firsthand small to medium-sizedcontractors getting cheated.
I personally called theinsurance carrier when those
craned flatbed receipts came inand could not be paid.
I begged the carrier to make anexception for a claim not being
reported in a timely mannerbecause the dealer did not

(12:40):
advise us of the repair.
After my initial call, thecarrier never spoke with me
again.
I got tired of the smallbusiness owner being treated
unfairly by people who meantwell but didn't provide what the
customer paid them to do.
At the time, I advocated forthe company to adjust their
claim handling in favor of amore customer-centric model, but

(13:00):
they wanted nothing to do withit, which is when I put my
business plan together for thisprogram.
Construction is the backbone ofthis country.
Small businesses drive oureconomy.
Nothing moves in Americawithout insurance.
We as the insurance communityneed to do a better job of not
only being an advocate for oursmall insureds, but also looking
out for them at a vulnerabletime when there's a claim.

(13:23):
A lot of small contractors relyon their ESC and PDI claim reps
to do the best job they can.
Since this is a totally newconcept in claim handling, I
have personally trained ourclaim reps on how to handle
claims.
Offering multi-year plans andpolicies for equipment tied to a
leaser alone, coupled withcomprehensive claim review

(13:43):
across both products, issomething we want every small
and medium-sized contractor tohave access to.
As I mentioned previously,having more certainty around
heavy equipment ownershipreduces the burden and anxiety
of future repair costs.

This sounds like a great way to get everything
you need done at one time andyou know the most efficient uh
way possible.
So kudos to you for developingthis, Randy.
Are you seeing success at thispoint?
I know you just got started.

We have been seeing success.
We have been onboarding uhproducers, and it's an engine
that takes a little bit of timeto get going because of how uh
we don't work with P and Clicensed folks, we work with
limited lines credit licenses.
It's a whole differentcategory.
I will say Starwin and CRC havebeen wonderful.
They have been incrediblysupportive.

(14:34):
I couldn't have asked for abetter partner, and I am so
excited to bring this tocontractors and small businesses
out there.
I totally agree with you aboutautomobiles.
If I can find a way to do thiswith automobiles and their ESC
and PDI policies, I wouldabsolutely do that.
I've been thinking about thatfor truckers and things like
that.
I just got to get my littlepiece up and running.

Right.
Well, we'll keep our eyes outfor more things to come from you
then down the road.

Yeah, that large equipment, though.
I mean, bigger equipment,bigger bells, those things are
enormous.
All I can think of when we'retalking about these things are
the giant wheels and the guysstand in front of those giant
earth mover things.
When I think of big equipment,that's just what I think of.

It's funny because the things people think of uh
of total losses.
Let's say there's a flood.
This isn't a total loss.
You're gonna take thehydraulics out, you're gonna
drive them out, you're gonna putthem back in.
It's not a total loss.
But those are things, so it'sreally opened my eyes to a lot
of things because I've alwaysbeen on the insurance side, and
then I was working for a companywho does a lot of these, and

(15:38):
I'm thinking to myself, why arewe doing it this way?
Like, don't you?
I the ESC manager, the claimsmanager, I'm like, don't you
know what the insurance policysays?
No.
The insurance people, so it'stwo different things.
And I'm looking at this from a30,000-foot view and saying, we
can do this so much better.
And when I brought it up tothem, they thought I was nuts.
Don't touch it, don't changeit, we get commissioned, don't

(16:00):
do anything.
And I'm like, Well, don't youcare about the small guy?
And when I started pitchingthis to some reinsurers and
insurance carriers, they'relike, How come we're not doing
it now?
I said, I don't know, I wasn'tthere to tell them about it.
Yeah, but it was kind of funny,and I'm very passionate about
this because I feel like this isI this is one of my missions.

(16:21):
This is something I want tobring.
After 35 years of doinginsurance, we can do a better
job in the insurance industry.
We can add, we should have donebetter during COVID.
We could do a better, a muchbetter job.
I don't want people to be like,oh, I have an ESC policy.
Oh, look, it's covered.
It's not a lot, not it's not alottery ticket.
We shouldn't treat it like alottery ticket.

Right.

We know that people don't read their
policies, we know people don'tread their plans.
That's why we're gonna do itfor them.
We're gonna help them.

Well, that kind of rapid fire thinking can only
lead to rapid fire, our our ourlittle question game that we
play.
And this is just, Randy, justanswer off the top of your head.
So our first question is if youweren't in insurance, thank God
you are, but if you weren't ininsurance, what would you be

(17:10):
doing?

Oh God, I would have been a I was gonna go into
psychopharmacology, which iskind of uh esoteric, but it's to
determine, you know, uh SSRIsand how they affect the brain
and things like that.
I don't know why I wanted toget into it.
It was the first thing I everthought that I would do.
But my dad wanted me to get abusiness degree.
And since he offered to pay formy degree, the golden rule

(17:33):
applies, which is the one withthe gold makes the rules.
So I got a bachelor in a degreein economics.

Well uh and that leads perfectly into the second
question, which is what's thebest business advice you've ever
received?
Was that it?

No, best not to get a business degree.
Well, that would be good.
But honestly, the my I love mydad to death.
He was such a very fair man,and I've gotten a lot of my uh
business sense from him.
But he told me as I was anunderwriter trainee, he says,
Randy, this is not a personalitycontest.
Not everyone's going to likeyou, but they need to respect
you.

(18:07):
And I've given that advice tomany others starting out in the
business world.

I love that, I love that description of your
father.
He was a fair man.
I I no one says that abouttheir butt they're always like,
oh, he's my hero or somethingvague.
But that I I like that.
That's a I would I would loveto be described that way, yeah.

There's a very fair man, and I I've as an
underwriter, I've gone back toproducers over the years where
they didn't like my decision,but they thought it was a fair
decision.
Right.
And that's all you can everhear me out, and then we'll go
from there.
But he was a very fair man.

Nice.
And our our th our third andfinal question is coffee or tea?

Tea with honey, please.
Okay.
I'm kind of neither one,actually, unless it's cold
coffee.

I'm I'm neither one either.

Oh, after all these years, Scott.

I know.
I'm the only graphic designerI've ever met that doesn't drink
coffee.

I don't I'm not a coffee drinker either.
I don't like hot things.
Make me feel like I'm boilingon the inside.

I even cool off my hot cocoa.

Same.
Just give me talking about it.
Skip it.
Well, uh, Randy, thank you somuch for joining us today.
Your insights uh and and howStarwind Equipment is raising
the bar.
Truly uh valuable for all ofour listeners today.

Yeah, and for more information or to explore, you
know, how Starwind EquipmentServices can help your clients,
reach out to your CRC specialtybroker or visit the Starwind
Equipment website atStarwindequipment.com.

Thanks for joining us, Randy.
My pleasure.
And thanks for listening toPlacingE First to all of our
listeners out there.
We'll see you next time.

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