Question
It is not uncommon to see a motor carrier with 5 to 10 power units only insuring one power unit. Recently a broker called concerned a particular vehicle wasn't listed on a motor carrier's insurance policy. The broker was informed the "DOT" number was insured regardless of whether or not a vehicle is listed on the policy.
The FMCSR mandates an insurance carrier settle any judgements against a insurance policy covering a US DOT number. The insurance company then has to take the carrier to court to retreive funds the insurance providers feels they shouldn't have had to pay:
There are insurance companies that sell carriers a million dollars of insurance but only issue the MCS Form 90 for $750,000. It is not uncommon for a carrier to have to request a copy of the MCS Form 90 once the DOT arrives. Some insurance companies make the MCS Form 90 part of the insurance portfolio. Others do not.
Since the insurance provider is responsible for any accident that occurs when a vehicle displays a carrier's US DOT number why isn't the insurance industry ensuring all of their providers verify the size of a fleet. I find it aggrivating that those of us who are honest and buy insurance are paying the price for the insurance industry not ensuring the burden is equally distributed.
After a carrier is in business for one year the insurance provider should pull a carrier's profile for $23 to see how many vehicles were inspected in one year. Any person with a credit card can get any carrier's information from www.safersys.org while a carrier's OOS violations are listed for free on http://ai.volpe.dot.gov/ all of a carrier's inspections can be purchased from www.safersys.org
The thing about the carriers' profiles, the more you buy the less expensive the profiles are. You can subscribe to the www.safersys.org and order 1 - 2 - 10 - 100 - 1,000 - or ????? the more you prepay for the less expensive each report is. The report will list EVERY roadside inspection a carrier has ever had allowing a viewer an additional tool in determining the size of a carrier's fleet.
IFTA reports may better represnt a carrier's actual mileage. Thereby revealing additional vehicles in the fleet. By using a common dominator of 140,000 per vehicle for carriers with solo drivers insurance providers can use fuel reports to determine the size of a fleet. Do insurance agents request IFTA reports?
How about it Connie, what precautions do you take when issuing or renewing a policy to ensure the entire fleet is insured? I recently heard part of a bribery scandal a couple of years ago involved the carrier trying to have the size of the fleet miss represented by reporting fewer vehicles in the fleet.
Be safe."If men were angels...No government would be necessary."
51st Federalist Papers
"Nichols' Fourth Law says, "Avoid any action with an unacceptable outcome"
Answer
John Q.
This is a great question and speaking from an agent's position, let me tell you what I do.
Before I provide a quotation, I gather information. I will ask all the basic questions and thensome. I have had people refuse to provide specific information, at which point I will gracefully refuse to go any further. Sometimes questions are phrased in different ways, for example:
1. How many vehicles do you own?
2. How many vehicles will be operating under this authority? (If the answer to #2 is less than #1, I start the "inquisition").
3. Will you have any owner-operators leased to you?
4. Is this all the equipment that will be operating under your authority?
5. Is this all the equipment you own?
6. How many vehicles are titled in your name?
7. How many vehicles are titled in the business name?
If the prospect already has a motor carrier number I will check Safersys and Safestat. We do ask for IFTA reports, prior loss history, vehicle schedules, driver schedules, MVR's etc.
Then I submit the information to the insurance company for a quotation. After the insurance company has scrutinized the information, they may come back with additional questions or request additional information. When they are satisfied, they will provide a quotation.
When the client signs the application, he/she signs a fraud statement that everything on the application is true and correct.
Insurance companies want to be paid for the exposure, so it's not like their just "letting" themselves be cheated out of the money.
But, let's take this to another side and that being insurance agents. Yes, my colleagues. I like to believe that most people are honest. But, in my 30 years of truck insurance, I have lost accounts because I would not lie to the insurance company for the client. I have been told that "so and so agent said he could do it".... then go to so and so agent and get it done. I't's not going to happen here. "But, I don't particularly like him." Why, because he's willing to lie for you? Are you worried that he may lie to you? Well, go figure!
I have had my quotes "lowballed" by another agent. Same insurance company, but just slight changes in coverage. Just enough to make the bottomline look better than mine. Then I get a call a month later from the customer saying the agent made an "error" and it's going to be this or that and now they need to come up with more money and blah, blah, blah.
The fraud that exists in insurance is not strictly limited to the policy holder, insurance compay or agents. This problem is at epidemic proportions throughout society. It's a people problem and it boils down to greed. Everyone wants something for nothing. It's just a matter of how far are you willing to go for how much.
All any of us can do, is to maintain our own integrity.