Commercial Insurance Best Practices Save You Money

Best Insurance Practices

The following best practices are ways you can save money, avoid towing fraud, lower your out-of-service (OOS) scores, determine if an accident really is a DOT accident, and help stabilize rising insurance premiums.

2021 Insurance Saving Tip #45

Notify your Insurance Company on a claim . . . even if you have already contacted your Attorney

Some companies and organizations keep an attorney on a retainer basis to go over any potential legal issues, including accidents, incidents or potential claims.

Some attorneys simply insist on staying informed of any situations involving potential liability for the business.

And some attorneys may provide their clients with “coverage opinions,” on whether or not the insurance liability claim on their vehicle would be covered. They will review if the policy was in effect, if the claim involves the insured or an additional insured, if there were any exclusions to the policy, and any exceptions to the exclusions, if the terms and conditions of the policy apply, and what is the effect, if any, of the endorsements on the policy.

If you do discuss an incident or claim with an attorney, be sure to also report it to your agent or insurance company.

Says one insurance company, “While we all hope to not have a claim, we know that things happen. The first thing to remember is to report the incident to your insurance company immediately.” (IFG Claims page)

Why do some policyholders delay in reporting a claim?

Some policyholders fear that reporting incidents or claims will result in higher rates, more restrictive policy terms, or even a potential nonrenewal of the policy. It’s a legitimate concern.

Some want to “handle it themselves,” perhaps paying out-of-pocket (think twice before proceeding in this direction—as it can be seen later as a possible “admission of liability”), or they rely on counsel’s opinion that the potential claim “might not be covered.”

Reality check! Delay in reporting an incident or claim can result in forgoing your insurance company’s advice and assistance in resolving the matter. Only the insurance company can make the determination, if they will cover the claim. And to do so, any claim needs to be promptly investigated.

If not notified of a claim within a reasonable time, the insurance company may be relieved of their responsibility to defend, and ultimately pay the claim. This could be costly to your company, as in some claims, the defense tab can exceed the actual claim.

Make sure your workforce reports all incidents and accidents to you, so they get properly and promptly handled.

If you have a concern your premiums will jump because of the number or claims submitted, this could be a cue it might be time to find another insurance company. As one risk manager noted, the same insurance company raising your rates because of the number or claims submitted, is the same insurance company likely to also deny claims submitted. It might be better to pay a little more in premiums in return for better service.

In Summary:

  • Always promptly report any claims to your agent.
  • Don’t merely rely on your counsel to determine, if you are covered under an insurance policy. Let the insurance company make that determination.
  • Don’t pay any claims out of pocket, unless this has been agreed to by the insurance company.

2021 Insurance Saving Tip #46

A Quick Start to Lower Premiums

For some business owners, insurance is kept on the back burner for most of the year, except perhaps in the two or three months before renewals. There is always a lot going on in the business, and this insurance stuff always seems to eat up a lot of time and energy.

Reality Check: The market is firming up. Adopt a longer view, a long-term strategy when dealing with your insurance needs.

A change in mindset on how you approach insurance might be needed.

  • Can you change your structure to lower your insurance costs?
  • How much risk can you retain?
  • Are there other options in the marketplace?

Check with your agent or broker how much your premiums would go down with a higher deductible.


  • A 500 unit fleet, had a $10k deductible. Bumping that up to a $75k or $100k deductible might save them about $80,000 a year, if not more.

Some fleets “stair-step” higher deductibles, for example starting at perhaps $50k, then $75k the next year, and $100k the year after.

  • Even with a higher deductible, the claims process is the same—all claims are still handled by the insurance company.
  • Quick Tip: Retaining more risk (with a higher deductible) opens up the market to getting more quotes back from underwriting!

2021 Insurance Saving Tip #47

Was It an Accident? The Answer Could Affect Your Premiums

The U.S. DOT requires DOT regulated carriers keep an “accident register” or list of accidents with specific data.

All DOT “recordable accidents” should be listed on this required document (involving commercial motor vehicles (CMVs) rated at 10,001 pounds GVWR and greater).
Insurance companies also are interested in this information.

  • For DOT reporting purposes it is irrelevant whether an accident is classified as a “preventable” or “non-preventable” accident.
  • “Fault” does not matter here for recording purposes.
  • So what is an accident?
  • What is the DOT criteria for an accident?
  • Where is it found?

If the federal regulations were put in a book, then Part 390 would be called “Chapter One.”

Specifically, in the beginning section of 390.5 Definitions, the term “accident” is defined, as well as other terms and words that make up the definition.
To understand the definition, you need to understand all of it, including the terms as they are defined and used.

An accident . . .involves a CMV . . . on the highway . . . which results in:

  • (i) A fatality;
  • (ii) Bodily injury to a person who, as a result of the injury, immediately receives medical treatment away from the scene of the accident; or
  • (iii) One or more motor vehicles incurring disabling damage as a result of the accident, requiring the motor vehicle(s) to be transported away from the scene by a tow truck or other motor vehicle.

The DOT also excludes from the definition of a recordable accident:

  • Only boarding and alighting from a stationary motor vehicle; or
  • Involving only the loading or unloading of cargo.

Where it happen? A highway “means any road, street, or way, whether on public or private property, open to public travel.”

  • So a DOT accident can happen on any road, any where, if it is “open to public travel.” This could be a parking lot or yard, unless it was gated, guarded, or had some means of controlled access, making it NOT open to public travel. If access to the location was controlled, then it was not a DOT recordable accident.

Was anyone fatally injured?Fatality means any injury which results in the death of a person at the time of the motor vehicle accident or within 30 days of the accident.”

  • The DOT uses a thirty (30) day counting period for accident fatalities. If a person dies as a result of injuries received in a traffic crash with a CMV within thirty days of the date of the crash, that victim is considered a traffic fatality, and the accident is DOT recordable.

Was anyone injured? Bodily injury means injury to the body, sickness, or disease including death resulting from any of these.

  • The classification and type of injury are not important as the timing of the treatment. It must take place “immediately.” DOT says:
  • Guidance:The term ‘‘immediate’’ means without an unreasonable delay. A person immediately receives medical treatment if he or she is transported directly from the scene of an accident to a hospital or other medical facility as soon as it is considered safe and feasible to move the injured person away from the scene of the accident.
  • Question 20:A person involved in an incident discovers that he or she is injured after leaving the scene of the incident and receives medical attention at that time. Does the incident meet the definition of accident in 49 CFR 390.5T?
  • Guidance:No. The incident does not meet the definition of accident in 49 CFR 390.5 because the person did not receive treatment immediately after the incident.
  • Any type of vehicle, privately owned or an ambulance, may be used to transport an injured person from the accident scene to the treatment site, but it must occur immediately after the crash.

Some motor carriers only utilize the information listed on the police accident report. This can be misleading.

  • If there were really any injuries making the accident recordable, further investigation may be necessary to properly determine if any medical treatment was received, or if the person merely had a check up, or went for observations.

Was there any disabling damage requiring towing?

  • Disabling damage means damage which precludes departure of a motor vehicle from the scene of the accident in its usual manner in daylight after simple repairs.
  • (1) Inclusions. Damage to motor vehicles that could have been driven, but would have been further damaged if so driven.
  • (2) Exclusions. (Not DOT Reportable accidents)
  • (i) Damage which can be remedied temporarily at the scene of the accident without special tools or parts. (A mirror or fender can be pulled back into place.)
  • (ii) Tire disablement without other damage even if no spare tire is available. (Flat tire.)
  • (iii) Headlamp or taillight damage.
  • (iv) Damage to turn signals, horn, or windshield wipers which makes them inoperative.

Other nonreportable events would include:

  • A commercial motor vehicle becomes stuck in the median or shoulder, without contact with another vehicle. (Interpretation Question No. 12). A tow in this instance normally does not make this incident into an accident.
  • Other vehicles that leave roadway without contract from motor carrier vehicle (Interpretation Question No. 28)

Be sure to also check the DOT’s Motor Carrier Management Information System (MCMIS), which contains a Crash summary of 4 years, and individual crashes of 1-2 years (from State crash reports).

DOT Accident Summary

  • All accidents are not necessarily DOT accidents. Be sure your required DOT Accident Register reflects only those accidents which meet the criteria for DOT Accidents.
  • Where did they occur (on a highway)? Was there a fatality (within 30 days)? Was there an injury (requiring immediate treatment)? Was there a towed vehicle (due to disabling damage)?
  • Is the DOT’s MCMIS data correct for your company?
  • Have you reviewed your Company Safety Profile in the last year?

Insurance Saving Tip #48

Understanding Towing Insurance Fraud

  • The illegal towing and recovery of commercial vehicles has become an issue for some fleets.
  • Towing operations are regulated by state or local jurisdictions, so performance can vary from area to area.
  • Some jurisdictions require a separate tow bill for a trailer, thereby doubling the bill for a combination unit.
  • While most towing operators are honest, a small number has been criticized for sharp business practices, including exorbitant fees or holding equipment and cargo hostage. Prevention of towing insurance fraud is always your best defense.

One area drawing attention recently is towing insurance fraud:

  • Non-consensual towing* of vehicles without the owner’s or operator’s consent.
  • Vehicles that are towed at the direction of law enforcement without the prior consent of the vehicle’s owner or operator
  • Towing by an unauthorized tow operator
  • Unreasonable storage and access fees
  • Towing insurance fraud can directly affect your insurance premiums.

*Non-consensual towing occurs when a wrecker makes a tow without the driver’s consent, or at the direction of law enforcement, in the interest of clearing the roadway.

Tips to avoid towing insurance fraud:

  • Ensure drivers do not park a truck on private property, then leave the premises, without an authorization to park there.
  • Become familiar with the laws governing towing in the jurisdiction of the tow.
  • Follow the TMC’s recommended practices RP 527A Vendor Selection Guidelines for Towing and Recovery
  • Carefully review towing and storage bills for inflated items or services not rendered.
  • Ask the towing company to always mail you a copy of the itemized bill.
  • File a complaint with the law enforcement unit responsible for managing the rotation wrecker list, if issues cannot be resolved.
  • Is the towing company properly licensed and adequately insured?
  • Ensure drivers are on the lookout for “runners” or “chasers” showing up offering their tow services at the scene of an accident without being requested by law enforcement or any parties.
  • Make sure you have adequate tow insurance in your policy.
  • If a towing company indicates at an accident scene that they are authorized by the insurance company to be there, verify this information with the insurance company.
  • Ensure drivers know not to sign a “consent to tow” form.
  • Drivers should photograph any tow equipment involved in a tow or recovery.

2021 Insurance Saving Tip #49

Lower Your “Out-of-Service Scores” for Lower Truck Insurance Premiums

The Out-of-Service (OOS) status reflects one or more OOS violations in a single inspection, for either the vehicle or the driver, and, if any hazardous materials were present, for any hazmat violations.

  • The OOS percentage is duly noted by Underwriters

Your Out-of-Service (OOS) Scores reflect certain roadside inspection data over the last two years, based on the number of inspections.

Out of Service Score

There are five levels of DOT roadside inspections:

  • Level 1 – a complete inspection
  • Level 2 – a walk-around inspection
  • Level 3 – a driver-only inspection
  • Level 4 – an inspection for a special study
  • Level 5 – a vehicle-only inspection
  • Level 6 – Level 1 inspection plus additional examination of Radioactive Material

The OOS scores are calculated based on the following types of roadside inspections:

  • Vehicle Inspection
  • Levels 1+2+5+6
  • Driver Inspection
  • Levels 1+2+3+6
  • Hazmat Inspection
  • Levels 1+2+3+4+5+6 (when Hazmat is present)
  • The National Average % is the percentage of all inspections conducted in the USA that resulted in an “Out of Service” status.

National Average

This carrier has about 3,000 units and is well below the national averages. This is where you want to be!

  • The fewer OOS violations found on roadside inspections, the lower the OOS percentages.

Are percentages near the National Average % acceptable?

  • Short answer—Yes. Few insurance companies will expect you to be better than “average.” Slightly below is a good goal.
  • Long answer: If you are in the long game, do everything you can to keep your vehicle and driver inspections with as few OOS violations as possible for the best possible insurance premiums.

How can we improve our OOS percentages?

  • Take advantage of every opportunity to accrue “clean” roadside inspections.
  • Remember the three Fs: Find it. Fix it. But don’t Forget it.
  • Ensure drivers are always physically and medically qualified to drive a CMV (Parts 383 and 391, especially Subpart E of Part 391).
  • Vehicles must meet the inspection and maintenance standards (Parts 392, 393 and 396).
  • If you are not a hazmat hauler, make sure drivers can identify any loads containing hazardous materials, and they always check in, if they have questions on what they are hauling.
  • If you do haul hazardous materials—Follow the standards in Part 397 and U.S. Department of Transportation HM regulations Parts 171, 172, 173, 177, 178, 179 & 180.
  • Over-communicate: Keep drivers current on what they need to know.

Make sure drivers are aware of how they can be placed Out-of-Service, and what they can do to eliminate potential violations. ■

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