One of the Reasons Your Trucking Insurance is High: Fraud

There is no denying that scams and fraud are everywhere. If you’ve been in truck fleeting for a long time, chances are you’re already familiar with people who’ve lied or cheated to get insurance money.

While stopping them is difficult, you can consider various solutions to protect your business by learning about the common trucking scams. Here is a primer of one of the most common scams in trucking industry-“Insurance”. Having an in-depth understanding of fraud related insurance will help you figure out the reasons why your trucking insurance is high.

Insurance Fraud in the Trucking Industry

This might sound bizarre to you, but insurance fraud is the oldest trick and also the biggest one in the trucking industry. According to the National Insurance Crime Bureau (NICB), it is estimated that trucking insurance fraud costs billions of dollars a year.

Most cases involved scammers driving typical autos and trying to get into crashes and accidents with trucks or 18-wheeler vehicles on purpose.  This is commonly referred to as “swoop and squat scam.

The scammers know giant trucking businesses need insurance to work or operate. They try to get into accidents and crashes to get big amounts and payouts.  Some scammers fill the cars with more passengers to raise the insurance payouts.

That is to say, a staged injury or accident claim means hefty insurance premiums and payouts and that makes fleet fraud expensive and costly.  Regardless of the intensity of insurance fraud, you must take essential steps to prevent it.

Internal controls and anti-fraud measures can help you customize an alert system for highlighting red flags.  Here are some preventative measures you can take.

A good claims team will help you look for;

  • A history of accidents with the same circumstances
  • Many past claims
  • Too familiar with claim processes and claim evaluations

You can also implement or incorporate fleet management programs to ensure that there is a fleet safety policy and prevent fraud covering the following areas;

  • Management Commitment

Define management commitment and role clearly to prevent and detect fraudulent claims. Many perpetrators of scam engage in illegitimate conduct when they think that no one will catch them.

 

  • Written policies

You should clearly list a written policy for all prohibited and permitted driver behavior, with proper procedure to follow in the case of an accident.

 

  • Driver Agreements

Document commitment of your drivers to conform to policies to help them detect any aberrant behavior.

If a company increases the perception in drivers’ mind that any illegal action will be detected, it may help deter fraud.

 

Summing Up

Overall, insurance fraud is a major problem not just because it involves fraudulent claims to payout, but also the tactics used by the scammers are incredibly dangerous.  They may cause trouble to not only truck drivers but also others sharing the road. As an industry it takes both the trucking companies and the insurance companies combating fraud.

 

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Links

https://www.insurancejournal.com/magazines/mag-ideaexchange/2017/08/07/459762.htm