Loss Run Lollapuzzoola

loss run

A Harvest of Sorrows

A motor carrier’s loss run report can say a lot about where they are at when it comes to safety. A loss run is a report that offers a history of claims that have been made on a commercial insurance policy.

Here are a few incidents from a loss run I recently viewed . . .

1.) Description of Collision: The tractor-trailer was turning right when the driver realized he did not have enough space to execute the turn, so he backed up in the turning lane and backed into the vehicle in line behind him.

Claims for injuries, as a result of this collision, were presented and the insurance company settled for $100,000.

2.) Description of Collision: Tractor-trailer was making a right and misjudged the turn and said he had to back up to make it. The vehicle behind was slightly bumped while the truck was backing.

The other vehicle left the scene and no police report made.

3.) Description of Collision: The  tractor-trailer missed its turn, stopped and reversed without looking, striking the left front of the other vehicle.

The insurance company paid $6,600 in damages.

4.) Description of Incident: After pulling the loaded trailer from the dock, the driver could not find an empty parking space to drop the trailer. He dropped the trailer on side of driveway where other trailers and rigs had previously parked. After he pulled out from under trailer and went around to pick up an empty, he witnessed the trailer tip over onto its right side. Ground under right landing gear was soft.

The insurance company paid $3,200 in damages to the trailer and the freight, for unloading the trailer, and for tow trucks.

5.) Description of Incident: The driver was backing under trailer. He did not realize the trailer was too high. Damage resulted to the bunk extenders and brackets.

The insurance company paid $6,440 for repairs.

The driver said, "“I didn’t see nothing," after backing into this $250k Ferrari FF.

The driver said, “I didn’t see nothing,” after backing into this $250k Ferrari FF.

Analysis

One thing that can stand out on a loss run report is the fact that some of the same drivers keep having “bad luck.” About ten percent of a fleet’s “high-risk” drivers can result in one third of all claims, according to some studies.

This is why it pays to investigate each and every accident and incident and have an accident preventability program in place and “score” each and every safety event. Was it really a case of the driver being in the wrong place at the wrong time? Or was it simply the bad judgment of the driver that resulted in the collision or incident? We know driver error is responsible for most collisions.

  • Backing in traffic is a major no-no. There is simply no excuse for it. Having a number of these same incidents over time tells me this mid-sized carrier does not care about training or safety (as was the case).
  • Backing under a trailer and ramming the back of the cab is . . . dumb. The driver rolled the dice on that one . . . and lost.
  • Sure . . . they might drop empties along the driveway . . . not fully loaded trailers. Why didn’t the driver find a plank to put under the landing gear if he wanted to set a loaded trailer on bare earth? Why not indeed . . .

In final analysis, in my opinion, this carrier wants to keep expanding, but doesn’t want to bother with investing in safety. They don’t determine accident preventability. They don’t have safety meetings. Their next loss run most likely will be much like their last one . . . if they can find a risk partner to underwrite their losses . . .

Thank you for reading this.

Should Congress Raise Truck Insurance Requirements? Will you be ready?

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Truck Insurance Will Likely Increase

Motor carriers should plan for an eventual increase in truck and bus (including school buses) insurance requirements. In April 2014 the FMCSA issued a report calling for higher truck insurance limits. On July 10, 2015, Sen. Cory Booker (D-NJ), introduced The Truck Safety Act, requiring, among other things, that motor carriers have at least $1.5 million in insurance.

While that bill won’t become law, on Nov. 13, Jami Jones of Landline Magazine (the official Publication of the Owner-Operator Independent Drives Association — which runs its own truck insurance operation) reported (Battle over attempts to increase trucking insurance heats up) that efforts to raise truck insurance continue — by a push of some Senators to remove the provisions in the current in the House version of the highway bill (Sections 5501 and 5503) that require the FMCSA to justify any increases before raising the minimum insurance requirements. The article recommends immediately contacting specific Congressional Representatives and Senators by phone via the Capitol switchboard or their websites, to show support for keeping motor carrier insurance requirements at their current levels.

The April 2014 FMCSA Report, required under MAP-21, says that motor carrier insurance is inadequate in about 1% of claims (catastrophic claims) due, mostly, to higher medical costs and should be raised — based on the consumer price index — from 1985 levels. Truck insurance based on the CPI would go from the current $750,000 level to $1,623,771. The report says the FMCSA has no data on the projected costs of the increased insurance requirements.

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How to Control Vehicle Insurance Costs

In these days of increasing costs, insurance is a growing, but often overlooked, expense area. As such, not much consideration is given to controlling the expense. Here are a few things that best-in-class organizations do to control insurance costs:

(1.) Assign responsibility to someone in the organization to control the expense. This does not have to be a full time Risk Management job. But any cost area not reviewed or controlled tends to grow over time.

(2.) Get help from the insurance company. Top insurance agents and brokers are always eager to meet with clients to help control their costs — some even on a quarterly basis. Many small business people do not realize that insurance companies have what is known as a loss-control department whose only function is to help businesses reduce claims.

(3.) Make sure your firm or organization has the right amount of insurance. The right amount of insurance may be higher than the statutory or legal requirements. The right amount of insurance may change when operations change. Your agent is happy to help in this area.

(4.) Invest in safety.

  • Do you have a solid safety program?  The primary aim of a health and safety program is to ensure workforce well-being and business continuity. Many times safety training is an automatic boost to productivity, which in turn boosts profitability.
  • Do you assess and deploy new safety technologies? Check out if your insurance company has any discounts available for safety technology.

(5.) Avoid collisions and claims.

  • Do you have written cell-phone, safety belt, passenger, and vehicle-use policies? Many small companies I talk to, do not, assuming employees “know better,” or even admitting they believe there is little the employer can do in these areas. Do everything possible to limit the chances of driver distraction.
  • Do you have a strong vehicle inspection and maintenance program?
  • Are employees vetted for their background and experience? Are all new driver-employees given a road-test? Are more experienced drivers given safety check rides?
  • Do you conduct a post-collision analysis of any crash?  Was the driver following too closely? Was the driver distracted? Was the driver fatigued? Was the driver in a rush because of a deadline? Did poor road, weather, lighting or equipment conditions affect the driver’s ability to drive safely?  Were there any other factors that may have caused the collision — remote (occurring well before the collision) or — direct (occurring immediately before or during the collision). If the answer is “yes” to any of these questions, then examine why the condition existed, to drill down to the root cause of the crash.

In future blogs we’ll review other proven strategies and tactics to better reduce risks and protect assets while lowering overall cost.

“What we truly need to do is often what we most feel like avoiding.” — David Allen

Thank you for reading this.

Disclaimer: Reference to any specific product, process, or service by trade name, trademark, manufacturer, company name or otherwise does not constitute or imply its endorsement, recommendation, or favoring by the author or a guarantee of any specific results. This blog is for informational purposes only. Thank you. 

Other related posts . . .

If Insurance is the Flower, Is Loss Control the Weed?

Automated Braking Systems