THE ONLY ROAD TO TORT REFORM

THERE IS A ROAD TO TORT REFORM…AND WE ARE NOT ON IT.

 

Doug Marcello

WHY IT MATTERS:  We have the power and ability to bring real tort reform by radically changing our approach and flexing our electoral power.

WHY WE ARE FAILING:  Our current course for tort reform is failing.  Aside from isolated success in the very few politically fertile states, our current strategy and procedures are not getting traction.

Continuing to play the same game, the same way is a prescription for failure.  Sure, PACs are necessary.  A necessary….  “Money is the mother’s milk of politics”.

But we will never win that game.  We are, and will be, outspent by those who reinvest in legislation and judicial elections from the 33%-40% they take from widowed and the injured.

We need to pivot to our strength and change the narrative.  Change it from a money game we cannot win to an electoral contest.

THE REAL ROAD TO TORT REFORM:  We have a power that none of the billboard lawyers possess—votes.  We need to flex our electoral power to repel this existential threat.

Trucking related businesses employ 8.4 million people.  This does not even include those who are self-employed. Or their spouses and partners.  Or their children and parents.  Or their friends.

In a time of a divided electorate in which a majority is determined by mere percentage points, trucking votes have power.

Trucking votes can be determinative. Electoral power personified by the mantra, “Truckers Vote”.

“SURE.  BUT HOW?”: Never has it been easier than today’s world of social media.  We can communicate directly to our people unfiltered by media intermediaries.

“Realistic?”  Consider that the death of a Tunisian shopkeeper sent shockwaves via social media that brought down entrenched governments with military force in an “Arab Spring”.  Our challenge pales in comparison.

Our road to real tort reform has four elements:

  1. Educate
  2. Motivate
  3. Flex
  4. Enlist

-EDUCATE:  Our employees and the public.  Of the existential threat of the billboard lawyers.  Jobs.  Consumer costs. Community support.

Of how the billboarders operate—did I say 33%-40% from the widowed and injured?  And then take their expenses from what’s left.  Litigation loans and funding.  Financing campaigns of the judges before whom they appear.

Educate them of our true story.  The lifeblood of America.  Drivers missing birthdays and anniversaries to deliver what we need and what we enjoy.  Million mile safe drivers and billions for safety.  Supporting the communities in which we live.

-MOTIVATE:  Motivation our people to vote for those who will protect and support our industry.  Motivation to vote to turn out those who don’t.

There are two sides—those who are for us and those who are not.  As a Texas politician once said, “the only thing in the middle of the road is yellow stripes and dead armadillos.”

-FLEX:  We need to show our electoral power by turning out and making our voice heard.  Forcefully.

The message needs sent—Truckers Vote.  And we vote for those on their side of the road.

The message that politicians can either be with those with the money or those with the votes.  Politician, its your choice.  And then it is ours.

-ENLIST:  The electoral mass of transportation is mighty but will be amplified by enlisting those in a similar position.  Medical industry.  Insurance.

Anyone in the crosshairs of billboard lawyers are our allies.  Our threat is their threat.  Our cause is their cause.  Our voices are amplified by unity.

“SOUNDS GOOD IN THEORY, BUT…”-Who is going to do it?  Where are you going to get the money?

-WHO?-We already have the infrastructure—National and state trucking organizations.  Starting at the top—ATA, TCA, NPTC,… Individually or, even better, united these organizations are at the vanguard of members and resources.

Then continue with the state organizations.  The grassroot entities closest to the members.

We have the “Who”.  It is just a matter of focused efforts as a unified front.  Educating, mobilizing, and enlisting their members for real action.  Action that can mean the difference between having or losing their business or their job.

A task force of trucking organizations—“Truckers United”—for the preservation of our industry.

“RESOURCES?”-“So who’s going to pay for this?”  “Where is the money coming from?”

First, we are talking about using existing resources focused on the existential threat.  Existing publications, emails, webinars, conferences,… Existing resources to educate as to the threat and motivate the response.

Over the last eighteen months I have given a presentation entitled “The Four Phases of Litigation” to numerous national and state trucking organizations and insurance meetings.  Many attendees were enlightened, if not shocked, by the threat and the strategy of the billboard attorneys. We need to extend the message as to why this is crucial as well as to the merits of our industry.

Second, we are not talking about massive expenditures.  We are not going to out-TV or out-billboard the enemy.  To do so is virtually wasting money.

We are talking about social media.  Generally free as a medium.

Maximized by messaging from the organizations and the allies.  Magnified by providing assets for posting by companies and employees.

Not the same old postings, but creative, captivating graphics and messages.  Why can’t our crucial messages be more impactful than an eighteen year olds stating his college football commitment.

Third, if increased funds are needed, let’s get it.  Like a WWII bond drive, we have noble cause and great need with funds dedicated to a specific use.

BOTTOM LINE:  Real tort reform requires a fundamental change in our attack.  To flex our electoral muscles driven by “Truckers Vote”.  To drive the effort by “Truckers United”  To do otherwise is to accept our fate with minimal progress.

Accident Response Tips

By Alyssa Adams

The moment an accident occurs is not the time to put your company’s accident response plan into place.  Having an accident response plan in place, including training your dispatchers on the policy, will allow you to act as soon as an accident occurs.  The faster you act, the better prepared you can be to prevent a lawsuit or claim, and the better prepared you will be to defend yourself in the event of a lawsuit.  Also, by acting fast and taking a proactive approach, you can potentially save money and litigation fees.  Even if a suit is filed, taking a proactive approach gives you the opportunity to collect evidence from the scene, surveillance, statements, or social media evidence to use in your favor at trial.  Below are the top 5 tips for you to keep in mind when preparing to respond to an accident.

  1. Act Fast and Be Prepared
  • The faster you act, the better you can respond.
  • To effectively respond, you must start well before an accident occurs.

o   The best place to start is by training your dispatchers on how to respond when an accident call comes in.  Train your dispatchers on:

  • What they should be asking the driver,
  • What information to obtain, and
  • What additional individuals, including attorneys or field adjusters, to contact to help with the response.
  1. Do not takes statements from your driver
  • Do not have your driver make any written or recorded statements regarding the accident.
  • Advise your driver not to give any statements to anyone or talk to anyone else about the accident.
  • One thing that you can do to completely protect your driver’s version of events, is to immediately have an attorney speak to the driver.

o   Everything said to the attorney would be confidential and protected by attorney-client privilege and could not be used later against the driver.

  1. Bring in outside help
  • You may want to have an attorney speak with your driver so that it is protected by attorney-client privilege.
  • You will want to hire an independent adjuster to help investigate the accident.

o   Hire an independent adjuster to call the other driver and witnesses to obtain their statement.

o   If you believe that there may be security cameras in the area, from other businesses or entities, you can have the adjuster go out to the scene to try to obtain any videos that have footage of the accident.

o   Hire an independent adjuster to go out to the scene and take photographs.

  • Hire an accident reconstructionist to inspect the vehicle, do a download of the black box of the vehicle, and to review the accident site for to determine how the accident happened.
  1. Social Media
  • Have you or your attorney’s office search for information concerning the accident.

o   Check Facebook and other social media.

  • Family members of the person hurt in the accident may comment on news articles or post about their loved one’s injuries.
  • Have your attorney or independent adjust run a public record search and a social media search for the claimant.

o   Make sure to keep checking on social media to see if they mention their injuries.

  • Usually once the claimant retains an attorney, they will be told to take their social media down, so it is important to find it immediately, if you think there could be future litigation.
  • Social media is very important and can sometimes be the piece of evidence that you need to prove the claimant is not injured. However, you must act fast on this.  If you wait until a lawsuit is filed, it may be too late.
  1. Preservation of evidence
  • Make sure to preserve any evidence from the accident.

o   This would include pulling the driver’s logs for the week before the accident.

  • If a preservation letter is received from the claimant’s attorney, make sure that you save anything that is included in the letter so that you are prepared in case of potential litigation.

o   If not saved, you can be accused of spoliation and may have sanctions issued by the Court.

o   If a preservation letter is received, have counsel send your own preservation letter to have the claimant preserve any evidence they have regarding the accident.

This is not an exhaustive list and assumes accident response measures are planned prior to the happening of the accident. We would be happy to provide accident response packets, forms, and checklists for free – just send an email to Alyssa Adams at aa@saxtonstump.com .

The hidden connection between fleet safety and efficiency

Jim Perkins

The harsh weather of winter months naturally brings fleet safety more into focus.

At face value, fleet safety is keeping drivers out of harm’s way. Beneath the surface, safety is a key factor in boosting efficiency and decreasing total cost of ownership. Simply put, a culture of safety instilled into all facets of a fleet can be good for the bottom line.

Preventing accidents not only protects drivers and others on the road, but also prevents additional expenses. For example, the Network of Employers for Traffic Safety (NETS) reported on-the-job crashes that result in an injury can cost upwards of $75,000.

Ultimately, a safer fleet relies on systems allowing a more seamless and intentional on-the-road process. In the fleet management industry, there are several services that not only provide worthwhile safety features but also increase efficiency. A commitment to reducing potentially dangerous incidents doesn’t mean a sacrifice in profits.

The following is a list of fleet management tools that not only increase safety, but fleet efficiency as well. Working together in tandem or individually, they can help save fleets money and help reduce costly incidents.

Telematics

The offerings in transportation mobility technology continue to evolve. Telematics solutions emphasize efficiency via safety perhaps more than any other fleet management tool, but also help boost fuel economy and reduce fuel costs. The amount of data available through telematics, increasingly complex safety systems and advanced analytics continue to grow in importance and add to more standard telematics offerings.

According to analysts at Frost & Sullivan, telematics helps fleets save about 20% to 25% on fuel expenses through the promotion of better driving practices, including the reduction of speeding, harsh acceleration and hard braking. Optimizing routes is one of the most used features of telematics. In doing so, drivers are more likely to remain on-task and reduce mileage that could lead to further wear and tear on vehicles.

Telematics also help manage work hours and improve schedules that can help reduce fatigue – a major reason for accidents. Using data effectively can help fleet managers increase productivity by 10 to 15% and reduce overtime by 10 to 15%, decreasing daily driving time by 20 to 30 minutes based on the previously mentioned Frost & Sullivan analysis.

Telematics and in-vehicle cameras can reconstruct accidents, allowing fleet managers to build safety training programs for drivers.  Additionally, monitoring driving behavior is a safety-added value that helps prevent on-the-job incidents.

Fleet vehicles can be put through great stress and strain over time. Breakdowns and unplanned maintenance can impact efficiency, and place drivers in dangerous situations. Telematics can alert fleet managers to needed vehicle maintenance, helping keep fleet vehicles safe and ready for the road. In turn, this helps avoid even more expensive repairs or accidents that can occur from inconsistent upkeep.

Fleet cards

Implementing a fleet card program is an easy and popular way to save money on everyday fuel purchases. However, most overlook that safety is built into most fleet cards. For drivers, it eliminates the need to carry cash or personal credit cards to fill up fleet vehicles and helps drivers avoid the need to collect cumbersome paper receipts.

Fleet cards and their software platforms can help avoid fleet fraud, with the ability to track exact fuel spend and set limits on fuel purchases. The ability to quickly activate cards or cancel them at a moment’s notice if lost or stolen is another convenient safety feature. Driver ID technology helps to monitor expenditures for each vehicle driver.

Mobile fueling

Mobile fueling services deliver a variety of fuel options to fleets with trained technicians filling vehicles on site during downtime. This service, in addition to helping save on costs via bulk fuel purchasing, removes the need for drivers to carry cash or personal credit cards to fill up.

Requiring drivers to fill-up vehicles frequently can reduce productivity. According to Geotab, drivers are diverted about two miles out of the way to get gas, spending about 8 minutes at the gas station each time they stop for fuel on average. A fueling trip adds more than 20 minutes to a driver’s shift. Mobile fueling drastically reduces driver fill-ups at gas stations, helping save over 3,000 hours of fueling and over 20,000 miles of fueling trips for a fleet of 100.

For those fleets utilizing the service, safety starts before the first truck delivers a drop of fuel on-site. A mobile fueling provider, such as Shell TapUp walks fleets through the required permitting and guidelines approvals, establishing safety procedures from the onset. Fueling technicians follow strict adherence to safety procedures and protocols on- and off-site, even leading local officials and fleet staff through on-site fueling demonstrations designed to help prevent safety incidents.

Electric vehicles and EV charging

Safety is also an important element among EV fleets. More fleets are turning to electric vehicles (EVs) with each passing year, largely due to their long-term cost savings, federal and local policy, incentives and the push to decarbonize. Safety comes into play when a fleet is assessing EV implementation which also helps fleet operators run a more efficient fleet. Technical and commercial proposals are shared between teams before installation, and technicians follow high safety and security standards on charging station installation days. Following that, online platforms are used to monitor efficiency, and dedicated teams provide ongoing support to answer day-to-day inquiries and keep equipment running.

 

Pennsylvania Lawyer Employs Creative Strategy in Crash Case

Eric Miller

The crash occurred on a chilly morning in Bensalem Township, Pa., between a tractor-trailer and a passenger vehicle traveling at what witnesses described as a “relatively fast speed.” The truck driver wasn’t injured, but the driver of the passenger car was killed. After a thorough investigation, police determined fault for the accident was shared between the two.

That determination provided trucking defense attorney Doug Marcello of Carlisle, Pa., with an opportunity to deploy a little-used legal strategy to protect Gypsum Express Ltd. — the motor carrier in the crash and his client — from the potential for a multimillion-dollar “nuclear” verdict.

The pre-emptive tactic, which he dubbed a “sue them first” strategy, was applicable since fault was shared and there was the potential for a liability dispute — in this case, damages to the truck or cargo. This accident, while tragic, provided an opportunity for the strategy.

In the October 2014 crash, the truck was stopped at a traffic signal to make a left turn. As the light changed and the truck began its turn, a Honda Civic traveling in the cross street and driven by the victim, 23-year-old Michael Baronofsky, ran the red light and collided with the truck.

Typically, in a case where a truck driver bears any portion of the blame in a fatal crash, the motor carrier and its insurance company could face a large jury verdict or out-of-court settlement.

Choosing against waiting for the Baronofsky estate to file a lawsuit against his client, Marcello filed a civil lawsuit against the estate seeking to recover $50,000 in damages to Gypsum’s truck. According to the lawsuit, Baronofsky operated his vehicle carelessly and recklessly, failed to obey a traffic signal, was speeding and a host of other allegations.

“If this was a rear-end accident caused by a driver, we’re probably not going to be able to do it,” Marcello said. “If at least partial fault could not be attributed to the other party, it wouldn’t be a good tactic. You wouldn’t use it if the accident is only blamed on your driver or your company.”

“In this time of nuclear verdicts, we must be innovative and aggressive,” Marcello wrote in an essay on the subject. “One of the tactics we frequently use is to sue the car driver. We do this before they sue our client.”

Marcello stressed that, in the case of a fatal accident, the family of a victim should be compensated fairly. In this instance, the strategy — one that is admittedly used sparingly ­— resulted in a $300,000 settlement with Baronofsky’s estate.

Gypsum received $19,000 from the opposing side’s insurance company for repairs to the truck.

Marcello believes filing the case in the local jurisdiction of Bucks County, Pa., gave him a better shot of a trial in a jurisdiction more advantageous to the motor carrier.

“Once we file it there, the action starts in that court,” he said. “It not only locks in the jurisdiction, but it also gives us a jump on discovery.” In legal terms, discovery is the formal process of exchanging information between parties about the evidence and witnesses that will be presented in the event of a trial, and could include depositions and/or subpoenas.

Marcello was convinced the estate’s Philadelphia attorney would have preferred a trial in his own backyard. For years, Philadelphia has earned infamous recognition as either being on the American Tort Reform Foundation’s Judicial Hellholes list, or on its watch list. “It’s a place one plaintiff’s attorney referred to with a smile as ‘that magical place,’ ” Marcello said.

Jeffrey Oster, a transportation attorney with the Philadelphia law firm of Vaughan Baio & Partners, noted the benefits of securing the right jurisdiction. “In Pennsylvania, I would much rather try a case before a jury in relatively conservative Dauphin County, near Harrisburg, over uber-liberal Philadelphia County because, statistically, any award potentially entered against my client would be lower in Dauphin County.”

While Marcello is not alone in using the strategy, he wants trucking defense attorneys to know that the tactic can help reduce financial exposure in some cases, including those where fault is either shared or unknown, and where trucks or cargo have been damaged. Unlike plaintiff attorneys, trucking attorneys generally don’t widely share legal tactics, according to Marcello.

“We lament the fact that these billboard attorneys are targeting trucks,” he said. “But while we may lament that, we have an advantage none of them have: We know about the accident before they do. If we aren’t prepared and don’t act immediately, we will squander our greatest advantage — immediacy.”

“I’ve used the tactic in limited ways,” said Ted Perryman of the St. Louis law firm of Roberts Perryman. “I’ve probably had a handful of these cases, but we always talk about it on every case. If I had a trucking company that had my headquarters situated in a judicial hellhole, and I had an accident out of state, I would certainly give the strategy some serious consideration.”

“With the exception of the optics, which are never good, the tactic can help lower the cost of the case to the motor carrier,” Perryman said. “Ninety-five percent of these cases get settled.”

But, as he noted, it may not look good.

You’re suing the family,” said Rob Moseley, a trucking attorney with Moseley Marcinak Law Group in Greenville, S.C. Not necessarily the most empathetic of parties.”

Moseley added, “You never can tell just how it’s going to go. It could have the effect of galvanizing the other party when you’re suing [a] widow. And you can’t unring the bell when you do it. Once you do it, you could make them really mad and they’ll settle for nothing but putting your company out of business.”

“The situation is a regrettable and unfortunate one that we’ve got to address,” Marcello acknowledged. “[But] what you lose in optics more than makes up in terms of the jurisdictional benefits.”

“I think it’s something that might work in some jurisdictions where the judicial system moves with some expediency,” said Bradford Hughes, an attorney with Los Angeles-based Clark Hill, who defends truckers in civil cases. “In other jurisdictions it may not work as well. Further, it may not be well received by some jurors. It really depends largely on where the defense can file, and that jurisdiction.”

He added, “Being in California, and considering the various challenges that the defense has under California law, I have not yet had a circumstance where my client felt that filing a pre-emptive suit was prudent. However, we have had situations where a plaintiff will file suit, not serve the defense, and wait several additional years for the plaintiff to continue unnecessary treatments. In those situations, we will voluntarily appear in the case after it is filed so that we can try and get ahead of some of the treatment being sought by the plaintiff.”

Oster warned, however, that there are risks. “Suing a potential plaintiff pretty much guarantees counterclaims lodged against the motor carrier in a case where, in theory, the plaintiff may have originally had no intention of suing,” he said. “Therefore, by forcing the plaintiff to court and encouraging him or her to countersue, you are causing the motor carrier to incur a possibly avoidable claim against its insurance policy and likely face an increase in premiums — especially if the trucking company is regularly forcing others into litigation.”

But Marcello believes, in an accident lawsuit, it’s naive to think that a plaintiff’s lawyer won’t come after a motor carrier with everything they have, no matter the strategy being used by the trucking attorney.

 

AI Helps Fleets Navigate Risk Management

Stephen Bennett

Insurance companies and brokers are finding the benefits in artificial intelligence to better assist trucking companies with their risk management needs. The technology has helped by quickly collecting and deploying data, enhancing safety and potentially paving the way to lower insurance costs, technology and insurance  experts said.

“Insurance companies are using data and AI technology on the route, on the origin, on the destination, how the driver is driving, to ultimately price insurance,” said Lisa Paul, Hub International’s chief strategy officer, specializing in transportation. She added that commercial auto insurance “has not been profitable doing it the old-fashioned way” because it was based mainly on motor vehicle reports on drivers.

“But that really didn’t tell the insurance companies how those drivers were actually driving,” Paul said, adding that motor vehicle reports are a reflection of how many times you got caught, not what you were actually doing. Hub International offers an AI-supported contract review service that can sift a 50-page agreement in PDF or Word in two minutes and automatically generate a response.

Artificial intelligence has utilized data from electronic logging devices, telematics systems and dashcams to address issues like driving behavior and problematic routes. AI is also beneficial in proposing and revising agreements with shippers.

Dashcam Data

Jeff Davis, vice president of safety for Napa River Insurance Services, the third-party administrator for Hudson Insurance Group, said AI is already proving its benefits in many areas of trucking safety, especially in dashcam systems.

AI has been an effective tool, for example when used with dashcam technology. (drKokos via Getty Images)

By enabling the processing and management of large volumes of information, AI allows some dashcam systems to distill thousands of data points down to “actionable items for which drivers can more effectively be coached,” Davis said. “These devices are no longer simply event recorders.”

The more advanced systems observe following distance, intersection behavior and speed, scoring drivers on overall habits so they may be addressed before they lead to accidents, Davis said. “I feel we will see this technology become more widespread in identifying preventive/corrective measures that can be undertaken in all areas of performance,” he predicted.

Dashcam technology with AI can be instrumental in reducing risky driving behavior, help to lower the cost of insurance premiums and exonerate drivers, insurance executives and tech vendors said.

“Video evidence takes the guesswork out of the equation when fleets need to defend drivers against fraudulent claims,” said Ingo Wiegand, vice president of product management, safety, at Samsara. “It can also speed up investigations for legitimate claims when fleets can easily pull and share HD video footage as evidence directly with their insurance provider.”

Wiegand added that AI-enabled dashcams provide fleets with insights to build a safety program and culture. “With in-cab alerts and mobile workflows, you can proactively coach drivers in the moment and work toward reducing risk across your fleet,” he said.

Telematics Assistance

The implementation of AI-enhanced systems promises to yield maintenance benefits too. Paul of Hub International noted, “A vehicle that’s had multiple rapid acceleration events and speeding events is going to have a different maintenance requirement” than a vehicle that’s being driven by a more cautious hand, belonging to a driver who has received remedial training.

Davis of Napa River said that for any industry or end user, success with AI is dependent on the quality of data. “It directs the assumptions of any AI-based system,” he said. “This is why there must be constant and ongoing validation of the results from any AI process.”

Chuck Wallace, CEO of High Definition Vehicle Insurance (HDVI), said that his company works with a large set of data sources, including telematics systems, ELDs and camera systems. Data from all those sources “comes in different formats at different intervals,” he said. HDVI built its own technology to field the data, analyze and standardize it, and to cope “when there’s a little blurb or a bobble in the data which there inevitably will be — and then fix that” to maintain high-quality data.

“Different telematics vendors spin off data of varying levels of quality,” observed Keith Halasy, vice president of marketing for HDVI. “From a truck operating standpoint, it’s important to make technology selections that support” AI-assisted systems, Halasy said. Some fleets lack the tech resources to put together an AI program, which must be fed by large volumes of data, he noted. “But when you start getting into the pools of some of the leading telematics providers [that] have a substantial amount of data, you can start to take advantage of that.”

Hub International operates a technology portal that can “ingest” data from more than 100 different ELDs, video information from dashcams, and route optimization data to help clients assess their total cost of risk “for that mile for that driver, for that shipper,” Paul said.

The more clearly total cost of risk-per-mile is defined, and then combined with equipment and fuel costs, the better a trucking company can price its services, Paul noted. “But they also then can be more predictive in their own expected losses and premiums,” she said.

Data Use and Storage

Keeping data secure and managing it ethically are not only business priorities, experts noted.

“It all boils down to, legally, who owns data,” said Hub’s Paul.

A trucking company owns the data in an ELD, Paul said. Beyond that, trucking companies seeking to use driver behavior data need to ask drivers to sign a telematics user agreement, as they do for motor vehicle reports and background checks, Paul advised.

Carriers can encounter reluctance or refusal from independent owner-operators when it comes to sharing data. “It can present a problem, but it can present an opportunity,” Paul said.

The independent contractor owns their driver score. A carrier can win over a driver by explaining that the score will be used to leverage lower insurance costs, which will be passed on to the contracted driver.

For a transportation company delivering data to an insurance company, security, including defending against hacks, is a consideration, Paul and others said. “I would say that’s a new and emerging issue for transportation companies,” Paul said. She also pointed to inward-facing dashcams that might capture biometric facial data. “You’ve got to deal with all the state laws associated with that,” she said.

Davis of Napa River called AI a tool to be used in decision-making. “It should not be considered a replacement for the human thought process when it comes to ethical considerations,” he said.

Data privacy should be one of the first steps in implementing “any AI program,” Davis added. “There will be those that actively attempt to breach this data and AI systems in general to gain knowledge into business practices, etc.” He recommended that a data security specialist evaluate any AI project or vendor agreement ahead of time.

AI and video telematics play an important role by giving fleets insights and evidence to better inform rates and protect against false claims, Samsara’s Wiegand said. “I see a lot of potential for driver coaching at scale and proactive training on patterns of risky behavior. Getting ahead of these behaviors before they affect insurance rates is where fleets will be able to feel a tangible impact.”

Wiegand said that choosing “the right AI-enabled dash camera is the best way to lower insurance premiums.” He said certain insurance providers look for specific dashcam features, such as audio speakers, recording capabilities or a wide view for outward-facing cameras. He noted that there are “more nuanced features” such as proximity search and on-demand video retrieval. These can help fleets pinpoint a vehicle’s location and retrieve HD video footage within minutes, he said. “For some customers, this results in hundreds of thousands of dollars saved on claims by exonerating drivers with video footage,” Wiegand said.

“As insurance premiums continue to rise, it’s become increasingly important to take a data-driven approach to risk management,” Wiegand said.

Some insurance companies are changing their approach to pricing, focusing on “how many miles and what routes and what type of driver in order to better price and achieve better profitability,” said Paul of Hub International.

Realizing Savings

Greater flexibility in rates during the span of an insurance contract is possible with AI-processed data, insurance executives said.

If a fleet improves its safety performance score, some insurance companies now offer to decrease what they charge, Paul said. “The challenge is most trucking companies don’t have a feel for how their fleet is going to score,” and a poor score could cost them.

HDVI offers a “Safety Lookback,” analyzing fleets’ telematics data from the past 90 days when a policy is first quoted. If the data from that span shows a certain level of safety performance, a fleet can earn discounts from the beginning of the policy, the company said.

Todd Witte, vice president of insurance product for HDVI, said the percentage of customers willing to share data before buying insurance has been rising. “It’s above 50 percent,” he said.

“If you think about the old days,” Witte said, a trucking company seeking coverage might tell an insurance company about its trucks, provide driver MVRs and describe its operations area — “pretty simple stuff.”

With AI, Witte said, instead of yearly evaluation of risks, there can be monthly monitoring, enabling the insurance company to be more responsive to a carrier’s driver behavior and the fleet’s safety performance. “This data is able to paint a much more high-definition picture of the risk,” Witte said.

Another use of AI can be to counter a negative reaction from underwriters after a carrier has a major accident. Underwriters typically conclude that the carrier is a high risk, but Paul said, “Maybe the transportation carrier was just unlucky.”

AI-generated data might show that the driver involved in the loss scored high in driving performance, had no record of distracted driving, and also that the overall fleet score is above average. That information can be used to reassure an underwriter, Paul said.

“Underwriters have historically used FMCSA violation data to price insurance,” Paul said, but with driver turnover, operational changes and a different customer mix, driver and fleet safety performance changes, Paul pointed out. “Those violations that happened three years ago and two years ago may not be indicative of how that company is operating now.”

Underwriters need not use “stagnant” Federal Motor Carrier Safety Administration data “as the sole determinant in pricing insurance,” Paul said. “The AI data is fresh, it’s current.”

 

Have Trucking Insurance Premiums Peaked?

Mindy Long

With the year more than halfway completed, there has been much concern about rising insurance premium costs. However, are we getting close to an environment in which those rates are leveling out or even reversing course? And what are the main factors to get the industry there? Here’s what insurance experts are saying:

Leveling Off

Industry experts say that although there is evidence of premiums ebbing, there is still reason for caution:

  • “It seems as though the market may be starting to soften, as we have seen smaller average renewal increases in 2022 and early 2023,” said Chris Gulker, senior vice president of transportation for TrueNorth, adding that well-run companies investing in safety and technology with a solid loss history are seeing small single-digit increases, flat renewals and in some cases, even small decreases.”
  • “The trend is starting to level off and even go down,” said Michael Birge, president of Hub International’s transportation services division, adding that commercial auto has experienced about five straight years of double-digit increases.

Turning to Technology

As the industry is meeting an uncertain future about controlling premium costs, carriers are turning to technology, including cameras, telemetry and artificial intelligence, to help mitigate risk and reduce premiums:

  • Stephanie Forster, principal strategic business developer, corporate development, for Omnitracs explained that some insurers subsidize the telematics devices and other in-cab AI or video safety systems while others require them, and more insurers are incorporating data from video safety solutions and telematics into their risk models for improved underwriting.
  • On navigation technology, Luke Wachtel, senior vice president of transportation and logistics for Platform Science, noted it is not just providing a more conservative, safe route, but putting out driving alerts and warning the driver to pay attention. “Some of [the telematics is] new enough that insurance companies are offering lower premiums, but the fleets can go back and say, ‘Look at this data,’” he said.
  • Bill Zenk, executive vice president of risk and workforce solutions for TrueNorth, said the best companies are using AI in lockstep with human-to-human interaction. “The technology looks at a motor carrier’s lawsuit vulnerability by pulling in multiple streams of data,” he said. “The tool churns out a score that informs us where the motor carrier’s nuclear verdict vulnerabilities are, so we can find ways to minimize the threat.”

Cost Squeeze

Prices for parts and labor plus new technology on vehicles are driving costs higher, giving fleet owners and managers another challenge when weighing premium costs:

  • “Social inflation, medical costs and truck replacement costs and repair rates all continue to put pressure on insurance rates as they all experience increases that are driving loss costs and severity,” said Gary Flaherty, chief insurance officer for OpenEyes.
  • Flaherty was a senior vice president at Nationwide before moving to OpenEyes in May. Nationwide’s claims data shows OEM parts on as much as a six-month delay or more. Flaherty said this is creating extraordinary demand for used parts, and Nationwide saw those part prices skyrocket. “This is causing increased storage costs when parts delays occur and experiencing more units being totaled due to repair costs now at such high levels,” he added.
  • “Any new car out there that has cameras, sensors and radars. Even a mild collision can be a costly repair,” said Michael Dorfman, chief operating officer of Koffie Financial.

Getting Up to Speed

Dorfman said that, historically, insurers had a problem understanding what equipment carriers are using, how it is being used and how they monitor it:

  • “Legacy insurance companies have a challenge understanding that at a granular level to build that into insurance policies. The broad approach has been, ‘That’s great. Let us see how it plays out, and then you can be eligible for discounts,” he said. “We’re trying to segment the trucking market better, so if you’re in the top tier of trucking companies, you can get a discount.”
  • Ian White, CEO of Koffie, said that his firm wants to “identify these safety technologies, knowing they can have benefits and price them in now rather than wait five years.” Koffie offers a dividend program that gives fleets up to 10% back on their renewal based on their loss ratio from the prior year.

Court Costs and Preparedness

While nuclear verdicts remain a factor, the cost of small claims is increasing, and the fine line between victory and defeat is a good defense:

  • “A $2,500 claim is now $5,000 over the last three years. Underwriters are looking at the frequency of claims and costs. If you do the math, those small claims are significant,” said Hub International’s Birge.
  • Telematics, specifically video, when used properly, has had a major impact on claim defense. When a professional driver can immediately show the video to a state trooper, it can change how a report gets written up, which can make a big difference in court, Koffie’s Dorfman explained. Even if the video does show a driver is at fault, companies can still benefit from the information. “Ideally, if the driver is at fault, you still know that faster so we can make quick settlements and save on legal and defense costs,” he said.
  • The majority of professional drivers are not at fault but get accused, said Jacques DeLarochelliere, CEO and co-founder of Isaac Instruments. “If they know you have a camera, it is a different conversation. If they know you have telemetry, it is a different conversation,” he noted.