What is the Farmers Truck Insurance Exchange?

What is the Farmers Truck Insurance Exchange (TIE), and how does it work? Also, how can you join the Truck Insurance Exchange?

TIE is one of 45 companies in the Farmers Insurance Group (FIG), and TIE is one of FIG’s three inter-insurance exchanges. The other two are Farmers Insurance Exchange and Fire Insurance Exchange.

TIE works like most other car insurance companies, but there are a few differences in how TIE operates. For one thing, members need to pay dues to a third party who can legally facilitate insurance transactions. Also, TIE members can vote for representatives on the exchange’s board of governors.

Read on to know more about the Farmers Truck Insurance Exchange, including its possible costs. You will also find information about TIE’s financial and consumer rankings.

What should you know about TIE’s history?

In 1935, John C. Tyler and Thomas E. Leavey launched the Truck Insurance Exchange in California to specialize in truck insurance. The two had previously founded Farmers Automobile Inter-Insurance Exchange (as it was initially known) in 1928 to provide farmers with cheaper car insurance.

TIE became the second reciprocal insurer Tyler and Thomas created, followed by the Fire Insurance Exchange in 1942. All three exchanges are subject to the California Insurance Code, so members of these insurance entities can exchange policies.

Today, Truck Insurance Exchange operates in all 50 states and the District of Columbia. TIE offers auto, homeowners, and personal umbrella insurance. It also provides some financial services to individuals. Business owners may purchase insurance through Truck Insurance Exchange as well.

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How does the Truck Insurance Exchange work?

When you apply for insurance with the Truck Insurance Exchange, you must sign a Subscription Agreement. That makes you a member (also known as a subscriber).

Like regular insurance companies, the Truck insurance exchange can issue policies, collect payments, and use individual insurance agents to assist policyholders and customers with their insurance needs. But since TIE is an exchange, a member can trade their coverages with another member.

Also, members of an insurance exchange need a third party called an attorney-in-fact (AIF) to administer various processes for a fee. Specifically, the AIF must facilitate a cover exchange.

About Truck Insurance Exchange’s Attorney-in-Fact

For Farmer Insurance’s inter-insurance exchanges, Farmers Group, Inc. (FGI) and two subsidiaries act as AIFs: the Truck Underwriters Association (TUA) and the Fire Underwriters Association (FUA). Of course, TUA acts as the attorney-in-fact for TIE members, as specified in TIE’s Subscription Agreement.

The agreement also specifies that the Truck Underwriters Association can take a fee that amounts to 20% of a subscriber’s insurance rates. However, TUA tends to take less than that. For 2020, TUA’s assessed fee was 14.6% of subscribers’ insurance rates.

How TIE Differs from Mutual Insurance Companies

Truck Insurance Exchange differs from mutual insurance companies in terms of governance.

Mutual insurance policyholders may share in the company by receiving dividends, but they cannot choose governing members. TIE members have actual ownership of the firm, and they can vote for representatives on its governing board.

How TIE Uses Its Fee Revenues

Besides covering an AIF’s costs, TIE’s subscribers’ fees also cover acquisition costs, license fees, losses, and taxes. Additionally, TIE’s board members stress the importance of keeping a surplus to cover future losses that exceed claims payments. Subscribers are not responsible for future losses, however.

What about Truck Insurance Exchange’s rates?

TIE’s subscribers’ monthly rates are a bit of a mystery, but TIE rates might be comparable to those for Farmers car insurance.

Here are Farmers’ car insurance rates compared to top competitors.

Trucker Insurance Exchange: Farmers Car Insurance Rates vs. Top Competition

Note that Farmers insurance owns 21st Century Insurance.

How can TIE members vote for representatives of its Board of Governors?

Truck Insurance exchange members can vote for the firm’s board of governors in one of three ways:

1. Vote in person. Members can attend the annual members meeting at Farmer Insurance Group’s headquarters. The meeting takes place on March 22.
2. Vote via paper proxy. Members can request a paper proxy from the Subscriber Relations Office and submit a completed paper proxy by mail. For votes to count, the office must receive the paper proxies by March 11.
3. Vote online. TIE members must have a Farmers.com account to vote this way, and the voting process is open from January 1 to March 11.

The online voting process is relatively new. In late 2020, Farmers Insurance announced that subscribers would have this option starting in 2021. Also, while paper proxy voting is still an option, TIE subscribers are encouraged to use the online option since it is much easier to do.

If you prefer the paper proxy option, contact the Subscriber Relations Office at [email protected] or the following address, taken from Farmer Insurance’s website:

Subscriber Relations Office

Truck Insurance Exchange

Attn: Corporate Secretary

P.O. Box 4461

Woodland Hills, CA 91365

The in-person vote happens at 6301 Owensmouth Avenue in Woodland Hills, California. You can call TIE at 888-516-5656.

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How good are TIE’s financial and consumer rankings?

Truck Insurance Exchange received an A (Excellent) rating from A.M. Best. On the other hand, TIE is not Better Business Bureau-accredited. TIE has one outstanding complaint with the BBB, so all the others might have been resolved.

TIE has an impressive trend with its National Association of Insurance Commissioners’ complaint index. (Note that an NAIC rating of 1.00 is average.)

Truck Insurance Exchange’s NAIC Complaint Index (2018-2020)

While growing its revenues by nearly $37 million, TIE managed to go a whole year without a complaint with the NAIC.

Should you buy auto insurance from the Truck Insurance Exchange?

Although TIE is a well-known company with impressive earnings, its services or truck insurance rates are not widely known.

In the meantime, here’s a review of Truck Insurance Exchange’s basic information:

• Full Company Name: Truck Insurance Exchange
• Address: 6301 Owensmouth Avenue
• City: Woodland Hills, CA
• ZIP Code: 91367
• Phone Number: 888-516-5656
• Year Founded: 1935
• Financial Rating: A (Excellent)
• NAIC Rating: 0.00

It appears that the Trucking Insurance Exchange has no website of its own. Besides using Farmer Insurance’s website for transactions, like voting for board members, you will need to visit the website for more information about TIE.

We suggest that you ask current members about their satisfaction with Truck Insurance Exchange. Based on the NAIC ratings, most subscribers appear to be satisfied overall. We also suggest that you get some car insurance quotes from various car insurance companies and compare them to any quotes you can get for TIE.

We offer a free quote tool, which you can access below when you are ready to compare rates.

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