Every day we pick up the newspaper, watch or listen to the news and hear the term “profiling” used. The subject usually revolves around race or terrorism, but we never stop and think that it might pertain to everything that we do. Profiling is used on or against us in every aspect of our lives – from our business transactions to our leisure life. The computer age has your number. Within a millisecond, our entire history is available to anyone that has an interest in you – good or bad.
In our highly-scrutinized society, things like your credit score, your driving record, legal issues and your personal buying habits all impact your ability to function. You cannot even go online without specific ads popping up that are generated specifically for your individual habits and lifestyle. Any information relating to business is instantly available. We no longer have any degree of privacy. Keeping a low profile does not mean that you are invisible to those that are looking. With this huge amount of information, the human decision process has been taken out of the equation. In regards to your insurance, no longer is it up to an individual to accept or deny your risk. If it fits it fits – don’t try to put a square peg into a round hole.
With all of that in mind, the transportation industry is probably one of the most scrutinized industries on the planet. I have said this for years! I have made past assertions, in my column, that underwriting for truck risks is, and will continue to, tighten in the future. I see this in higher rates, as well as the number of declinations that I receive from the various insurance companies I am trying to quote or place new business with. In addition to the usual requested information by underwriters, such as the information that is typically on the application, underwriters are going to other various services and service bureaus that specialize in gathering information on the trucking industry, when making a decision to provide coverage for the submitted risk.
In the past, the most pertinent pieces of information came through the DMV disclosing your driving record, the previous year’s loss history or “Loss Runs” provided by your previous insurance carrier. Now, every new risk is subject to your loss history, provided by your previous insurance company. If you are renewing and/or shopping rates, be prepared to provide this information. Loss Runs have to be requested by you and cannot be requested by the new agent that you are working with. Usually, it takes two to three days to get them. There are some instances that your current broker will be reluctant to provide this information, but Loss Runs cannot be withheld from you. These days, MVRs, credit scores, your DOT (FMCSA) Rating and the Central Analysis Bureau (CAB Report) are all part of the underwriting process – and with all of this information, they now know everything about you.
The Central Analysis Bureau (CAB Report) is the 900-pound gorilla in the room. They are constantly updating this report and reaching out for more sources of information for their insurance clients. The CAB is the central source of collecting information. This information is used by the insurance industry, as a profile, in their decision to provide you with insurance for your trucking activities (or not).
As time goes by, you will be subjected to an ever-increasing number of rules and regulations. Electronic surveillance and monitoring will become even more common. There will be a new industry built around the increased demand for regulation and compliance reporting to the various government entities involved. This will not be in place of current requirements and regulations, but will be in addition to them. Government has a propensity to make things more complicated by increasing our bureaucracy and tightening the grip that it has on the transportation industry (and others, as well).
Mounds of information is gathered by various departments within the governing agencies. The following are just a few of their “devices” used in the collection of information: CSA (Compliance and Safety Accountability), SMS (Safety Measurement System), SFD (Safety Fitness Determination), and VITAL (Vehicle Inspection Tracker And Locator system). The point of all this is to make you aware that everything you do affects your ability to be self-employed and provide for your financial needs through your chosen profession.
AWARENESS ALERT: I am seeing an increase in non-fault accidents involving vehicles that are not insured or are under-insured. Case-in-point: I have an insured that was stopped at a stop sign. The other party, approaching from the opposite direction, ran the stop sign and hit our insured’s tractor/trailer, taking out the drive axles and the trailer’s tandem axles, causing some major damage. California has a minimum insurance requirement for property damage of $5,000. In the above case, the damages were in excess of $30,000. The driver causing the accident had a policy with Property Damage Limits of $10,000. This left our insured $20,000 short, which his insurance had to pick up. To add insult to injury, our insured’s policy had a $1,000 deductible. Now, this is only the start of it. Since there was only $10,000 available for the loss, our insured could not go after down time or loss of revenue from the other parties’ policy.
The reason that I bring this up is because it ties into what I have been talking about in this article. Since our insured’s policy will end up paying out on this claim, that amount will show up on the insured’s Loss Run and go against him. Even though he was not at fault, money was paid out, on his behalf, and that will eventually cost him down the road again. It doesn’t seem fair, does it?
California has an auto insurance program that is available to low income families. This program has a property damage limit of only $3,000, but since this is a state-endorsed program it meets California’s financial responsibility requirement. At some point, California is going to have to increase the required limits for auto insurance. You, as a trucker, have a required limit that you have to have, and there is no reason that every auto on the road should not be adequately insured, as well. If you have a comment or would like to reach me, I can be contacted at California Plus Insurance at 800-699-7101.