How to avoid big insurance claims
Matthew Amodeo, president of Osprey Underwriters, shares his insights on insurance trends in the trucking industry and what fleets can do to avoid big insurance claims.
Nov 30, 2020
Osprey Underwriters , an insurance underwriter/program administrator based in Greenwich, Conn., offers multiple forms of coverage for the trucking industry, including truckers’ general liability in addition to cargo insurance. Companies can get quotes for cargo insurance through the company's motor truck cargo quoting platform as well as learn more about Motor Truck Cargo by visiting OspreyWatch , a one-stop-shop that provides clients with hassle-free quotes as well as insurance knowledge.
FleetOwner recently spoke with Matthew Amodeo, president of Osprey, who shared his insights on insurance trends in the trucking industry and what fleets can do to avoid big insurance claims.
FleetOwner: How can fleets work to control their insurance rates, and what can they do to find affordable insurance in a tough market?
Matthew Amodeo: To find affordable insurance policies, be well acquainted with your claims history. Stay up to date on claims report at least twice a year, and certainly in advance of the fleet’s policy renewal period. To keep policy prices down, demonstrate that your fleet has a safety program in place, such as driver training, drug-free workplace, and return-to-work programs. While it might not get credits up front, it will pay off over time and reduce claims in the long term.
Insurance is designed for periodic large claims, but the problem is the frequency of smaller claims with the larger ones. So, by reducing the overall frequency, you will keep future costs down.
FO: What advice would you give to fleets when monitoring their insurance policies?
MA: It’s good practice for trucking companies to shop the market for insurance coverage, and to keep tabs on insurance changes. More often than not, I find trucking companies that have a last-minute non-renewal notice, premiums have gone up 100-200%, and they have a week to respond. By monitoring what’s going on with your insurance policies, you are taking care of your fleet. Keep eyes and ears open. Be realistic about business operations based on claims history. If you know your claims history is bad, chances are the insurance company will know too.
FO: What are your thoughts on what is happening with nuclear verdicts in trucking?
MA: I think that – based on the news –the trucking industry is a new target for trial rates. The construction industry has been the main focus for some time, and now the attention has shifted to trucking. Lobbying by the industry is trying to put a cap on claim types. Like anything else, if the lobbying becomes persistent, it will affect the market availability of higher insurance limits. If the prices become too expensive but the cases are still occurring, then the trucking company will be on the hook for those trial costs and could be forced to declare bankruptcy.
Nuclear verdicts are a bigger risk for smaller fleets than larger fleets because larger fleets can afford more expensive policies. Focus on safety now more than ever to reduce the frequency of claims and having one of these runaway juries.
Buy umbrella and buy excess liability insurance. Get involved in the process of claims so you’re not leaving the whole process up to the insurance companies. Insurance companies don’t care whether the claim is $1 million or $10 million because they get the fee whatever happens with the case. By settling cases within the policy limits, fleets could then avoid bankruptcy.
FO: What are some tips to minimize workers’ compensation claims and costs?
MA: At Osprey, we recommend starting off with new driver orientation with another experienced or senior driver for the first few days of training. While having a second driver in the vehicle might be more expensive in the short term, it will be cost effective in the long term.
Having a drug-free workplace program does a lot to reduce claims as well. Aside from marijuana and alcohol, there’s a big problem with prescription drugs, especially with truck drivers. Because they are always sitting and lifting heavy objects, back injuries are very common, and those truck drivers might be taking prescription drugs to treat the injury. This increases risk of incidents. Having a drug-free workplace program creates awareness and protection not only for the employer but for the employees as well.
FO: How have insurance companies been providing support and flexibility for fleets during COVID-19?
MA: In some cases, the biggest impact were the driver changes—having to let drivers go. Some companies didn’t report those changes and were given a higher surcharge. But for the most part, the pandemic mostly increased business where companies only had let drivers go in the beginning, but then brought them back as soon as possible to help keep up with demand.
FO: What tips would you give drivers and fleets to promote safety on the road?
MA: I’ll keep it simple: Don’t speed—especially on roads you’re not familiar with. Stay off your cell phone. Keep the headsets and earbuds off. Think of the jury in a verdict trial. If an incident involves distracted driving, there isn’t going to be much pity from a jury.
By adopting incentive programs to reward for safety, fleets can encourage drivers to stay true to proper driving behavior, in turn, ensuring there will be less incidents on the road and less money to be spent in insurance claims.
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CVSA sets the date, focus for its 2021 International Roadcheck
Set for May 4-6, the 72-hour inspection event will focus on lighting and hours of service compliance. Here's what truck drivers and fleet managers can do now to prepare.
Feb 04, 2021
The Commercial Vehicle Safety Alliance (CVSA) has set the date for its 2021 International Roadcheck, the 72-hour blitz of commercial vehicle inspections across North America. From May 4-6, law enforcement officers will focus on lighting and hours of service (HOS).
The results of the 2020 International Roadcheck showed that HOS was the top driver out-of-service violation, accounting for 34.7% of all driver out-of-service conditions. According to the Federal Motor Carrier Safety Administration, the lighting violation “lamps inoperable” was the number one vehicle violation in fiscal 2020, accounting for approximately 12.24% of all vehicle violations found.
Fred Fakkema, vice president of safety and compliance at Zonar Systems – and a former state patrol officer for over 25 years and a graduate of the FBI National Academy – shared his thoughts on the upcoming blitz and how drivers and fleet managers can best prepare.
According to Fakkema, “lamps inoperable” refers to all lighting devices, reflectors, and electrical equipment on the vehicle. There are minor violations such as a broken reflector on a trailer, but if a commercial vehicle is operating with a headlight or turn signal out, the violation is more serious and more dangerous to both the driver and those around him or her.
“If a driver can’t see or other occupants of the road don’t know when a truck is switching lanes or turning, things can quickly turn dangerous. Another example is if brake lamps are not operating correctly, this could lead to a “rear end” collision,” Fakkema added. “Also think about how an inspector chooses a vehicle to stop, the lamps inoperable is low hanging fruit for enforcement, a clear visible and easy reason to stop the vehicle which then starts the inspection. A proper pre- and post-trip inspection can help eliminate this and most violations.”
During the 2020 International Roadcheck, more than 1,100 commercial vehicles were placed out of service due to HOS violations, while the top five vehicle violations were related to brake systems, tire, lights, brake adjustment, and cargo securement .
“It is essential to understand the HOS regulations and abide by them. An adjustment to the HOS rule was put into effect at the end of September and further changes aren’t expected,” Fakkema explained. “That said, in addition to knowing the rules, partner with your ELD provider so that you and your drivers understand how to use their devices and what law enforcement will expect from your device at roadside.”
On Jan. 13, CVSA announced the appointment of Jake Elovirta as its new director of enforcement programs. As Vermont’s first laser speed operator, instructor, and trainer, Elovirta – who also graduated from the FBI National Academy – will manage CVSA’s Human Trafficking Enforcement program and the Operation Safe Driver program, including Operation Safe Driver Week, in addition to International Roadcheck.
“As we continue to advance the goals of the Alliance, we are devoting even more resources to traffic enforcement and public safety education initiatives,” said CVSA Executive Director Collin Mooney. “This new position further demonstrates our commitment to reducing roadway deaths and injuries attributable to driver behaviors, the leading cause of crashes.”
Last year’s Roadcheck event focused on speeding. According to Fakkema, the COVID-19 pandemic drew millions of people off of the road, allowing for an increase in speeding violations as the roads were more open and congestion significantly decreased. For 2021, things may be looking up, but safety should still be top priority.
“More passenger cars will return to the road as things return to ‘normal’ and everybody will have to adjust and be cautious. Commercial vehicle drivers will likely need to slow down and get used to more heavy traffic conditions,” Fakkema said. “And while driving your car may seem intuitive, many people haven’t been doing it regularly, let alone in a commute type situation in some time. They will need to be patient and remember that commercial vehicles don’t stop and maneuver like cars – those trucks need more space and the drivers appreciate you taking caution too.”
As COVID-19 vaccines are continuing to be shipped across the country, CVSA announced in an Inspection Bulletin on Jan. 8 that truck drivers transporting COVID-19 vaccine shipments will not be held up for inspection, unless it is determined there is a serious violation that is an imminent hazard to the public.
“As was the case last year, in consideration of COVID-19, law enforcement personnel will conduct inspections following their departments’ health and safety protocols during 2021 International Roadcheck,” CVSA added.
To best prepare for the safety blitz, Fakkema shared some recommendations for both fleet managers and drivers.
“Fleet managers need to ensure that their drivers are prepared with proper documentation and records, know how their ELDs work, act professionally as well as do proper pre-and post-trip inspections so that they are more likely to get back on the road as soon as possible,” Fakkema said.
Fakkema added that drivers should keep a checklist of what they’ll need while on the road and stay on top of expiration dates by scheduling necessary renewals in advance.
Required documentation and devices include:
Roadside view ready ELD