Talking about LUTZ comprehensive transport insurance
ZMPD: Thank you very much for taking the time for this interview. You said beforehand: "Lutz Transport Hull Insurance is a hull insurance policy developed specifically for international carriers that covers many classic, but also special carrier risks." What exactly do you mean by that?
LUTZ: First of all, thank you very much for the invitation. We are very pleased to be able to take this opportunity to present some highlights from this Lutz cover concept, which has been developed over many years.
Now to your question. Lutz Assekuranz has been supporting its customers in the area of CMR and goods transportation insurance in the event of damage to goods throughout the entire processing period until the insurance claim is settled - and has been doing so for many decades. Lutz Assekuranz therefore draws on an immense wealth of experience and knows the problems that customers have with their vehicles and hull insurers in the event of a claim.
Ultimately, this gave rise to the idea of building a comprehensive insurance product that helps the carrier where conventional comprehensive insurance ends.
One example: Many locally available comprehensive policies only allow repairs abroad to a very limited extent (with a few hundred euros as a sub-limit), as higher hourly rates are generally charged there. Customers are encouraged to carry out repairs in their home country wherever possible; full repairs abroad are generally not approved by the insurer. The Lutz policy is different: It allows full repairs to be carried out in the workshop - closest to the scene of the accident - that is capable of doing so; this means massive time savings for the carrier - who usually has a delivery deadline to meet or is on the way to the next loading date - and considerably less organizational effort.
Many locally available comprehensive policies only allow repairs abroad to a very limited extent. The Lutz policy is different: It allows full repairs to be carried out in the workshop - nearest to the accident site - that is capable of doing so; this means massive time savings for the carrier - who usually has a delivery deadline to meet or is on the way to the next loading appointment - and considerably less organizational effort.
ZMPD: Accidents abroad - especially in Western Europe such as Germany, France and the United Kingdom - are a well-known horror scenario for internationally operating freight carriers and can result in particularly cost-intensive recovery operations. Does Lutz have a solution for this?
LUTZ : Vehicles that are unable to move themselves after an accident have to be removed from the scene of the accident at short notice, usually by order of the police. In many cases, you then have to rely on private towing companies, which charge high fees for their services (including for any subsequent space rental), especially if they are used at night. Without a corresponding cash payment, the vehicle and loaded goods are then retained as a deposit - a situation that can lead carriers into massive financial difficulties (running costs of the immobilized vehicle such as insurance, annual inspection, etc.; wage and ancillary costs of the then unoccupied driver; a delivery date that has to be met; perhaps even perishable goods in the hold that have to be constantly cooled; etc.).
Lutz is aware of the problem that towing/recovery services abroad are expensive - which is why the Lutz product does not provide a sub-limit for such costs. Instead, the towing/recovery costs are treated as part of the restoration costs, i.e. towing/recovery costs and the actual repair costs are generally reimbursed up to the replacement value (less wreck value).
An example: Towing costs 15,000; repair costs 10,000; replacement value of the vehicle 50,000; wreck value 15,000; the towing costs and repair costs (together EUR 25,000) are paid in full, as the sum of EUR 35,000 (replacement value less wreck value) was not exceeded. Lutz Assekuranz customers thus get their vehicles back on the road very quickly and avoid massive consequential financial losses.
ZMPD: This is actually very helpful - but not much use if the vehicle has suffered a total loss (e.g. burnt out) or if salvage/repair is uneconomical in view of the replacement value. Does the Lutz police have an answer to this?
LUTZ: We are very pleased that you address this point directly - and it is a good example of the fact that Lutz picks up its customers where other insurance companies leave off. The Lutz policy covers wreck removal costs and wreck destruction costs up to a fixed limit (this is usually a percentage of the NEW price of the vehicle - or, by agreement, up to a fixed lump sum, e.g. EUR 10,000 without any problems) - regardless of whether this is ordered by the authorities or not.
It is not uncommon for Lutz customers to bring their economically totaled vehicle back to their home country and repair it there using the insurance money provided for the repair and other personal funds. This means that even older vehicles with a low replacement value (i.e. where the economic total loss is reached relatively quickly) can be put back on the road.
The Lutz policy thus provides significantly more than the classic comprehensive policy, which as property insurance is primarily aimed at restoring/replacing the insured object.
Lutz Assekuranz offers customers the option of integrating damage due to load displacement and twisting into the comprehensive policy; in individual cases even without a surcharge.
ZMPD: Not bad! At the beginning you mentioned that the Lutz policy is able to cover special risks. What does this mean for readers?
LUTZ: Classic comprehensive insurance is based on the concept of an accident. Literature and case law define an accident as a "sudden, direct external event with mechanical force". This must be distinguished from pure operational damage, which is generally not covered by comprehensive insurance; this is damage that is caused by a risk that is usually associated with the vehicle, taking into account how it is used, and is usually survived.
Typical operational damage in the freight carrier industry is (1) - as a result of a braking maneuver - the displacement of the load, which damages/breaches the inner wall of the trailer; the damaging event does not come from "outside" but from the sphere of the truck (quasi from "inside"). (2) Torsion is also very well known. Example: The truck wants to turn and pushes back, but the driver chooses an angle that is too steep - the vehicle train "buckles" (literally forms the number "1") so that the tractor unit and trailer damage each other. Again, the definition of an accident would not be fulfilled and, in principle, no compensation could be obtained from the comprehensive insurance.
Lutz Assekuranz offers customers the option of integrating damage caused by load displacement and twisting into the hull policy; in individual cases even without a surcharge.
ZMPD: Many of our members have tours to the United Kingdom or Southern Europe and book RORO ferries for this purpose. Now we are seeing more and more shipwrecks in the media. Your product covers so-called "general average" contributions/guarantees - can you please explain this in more detail?
LUTZ : In recent years, the number of ships involved in accidents has actually increased significantly. To name just a few well-known examples from the recent past: Costa Concordia (2012), Evergiven (2021), Euroferry Olympia (2022), Felicity Ace (2022).
As practice shows, the causes of maritime accidents can be very different - fire, clumsy maneuvering, stormy seas, water ingress, etc.
In many cases, rescue measures can be carried out as part of a so-called "general average" - if the ship's captain so orders. This is defined as when, due to extraordinary circumstances, damage or costs are deliberately accepted in order to rescue the ship and cargo from a common danger. Very often this involves losses due to the sacrifice of goods/vehicles and the costs of towing the ship.
These rescue costs are then charged to all parties involved in the maritime transportation in proportion to the rescued assets (vehicles, goods, etc.) - including carriers on the ship. Following the salvage operation, shipowners usually assert their lien on the salvaged assets, i.e. they retain them until the respective party has paid its share of the general average costs or provides a guarantee (e.g. in the form of an insurance policy) for subsequent payment.
The Lutz policy provides exactly these guarantees or general average contributions for all hull-insured vehicles up to the amount of the replacement value of the vehicle; this means that carriers insured through Lutz receive their vehicle immediately after arrival in port and can dispose of it again independently.
An important note at this point: If there are goods in the truck hold, the carrier must ensure that these are also released by the shipping company. This is not a problem with a Lutz CMR or CARGO policy, as these also provide general average cover as standard; otherwise the carrier is advised to ask the shipper for instructions and insist that the shipper or the party interested in the goods makes the necessary general average contributions to the shipping company as quickly as possible so that the transport can continue.
ZMPD: Wonderful - I'm sure many of our members will be delighted. What other benefits do policyholders of this product enjoy and what does the insurance cost?
LUTZ : The standard scope of insurance includes, for example, misappropriation - in other words, if your own employee disappears with the vehicle. In times of a global shortage of drivers and the associated need to hire more newcomers (also from faraway countries), this is a useful thing. Another advantage for our customers is that - after a claim - the sum insured does not have to be topped up again, but remains unchanged without the need to pay additional premiums (i.e. the insurance is actually paid for a second time). In addition, the Lutz policy does not provide for a "new for old" deduction in the event of partial damage - i.e. costs for necessary spare parts are paid out in full and not reduced because the damaged part (e.g. the driver's door that has been pushed in as a result of an accident) was no longer new but already used at the time of the claim. In this way, we want to do something good for all those customers who have reported that they are often unable to fully repair their vehicle with the insurance benefits provided by local insurers. The product also offers other interesting cover elements, but it would go beyond the scope of this article to list them in full.
The actual premium depends on several risk factors that are queried during the consultation process - but in general it can be said that the premium is extremely inexpensive in relation to the cover offered.
ZMPD: That brings us directly to the next question. What documents does an interested party have to send in so that Lutz Assekuranz can make an offer?
LUTZ: We need a current vehicle list with the following data: Vehicle type, model, date of first registration, chassis number, license plate number, any optional extras and desired sum insured. Vehicles should not be significantly older than 10 years, although exceptions are possible depending on the individual case. Photos of the vehicles increase the chance of a more favorable quote. For larger fleets, insurer damage statistics are required in any case.
ZMPD: Perfect. Where can interested parties go if they want more information about the product?
LUTZ: We have placed "Frequently Asked Questions (FAQ)" about Lutz Transport Hull Insurance on our website in various languages. Of course, our customer advisors - at the usual locations, especially in the customer service center at ZMPD - are always available to provide advice and assistance and will be happy to send you the product information sheet and the general terms and conditions of insurance on request.
ZMPD: Thank you very much for talking to us!
LUTZ: Thank you!