In commercial auto, insurance companies grapple with the persistent challenge of premium leakage. This term refers to the loss of potential income due to the discrepancy between the number of vehicles a fleet actually operates and the number listed on their policy. Most commercial auto industry estimates point to 30% as the current rate of premium leakage. Moreover, the issue is exacerbated by the fact that, under the MCS-90 endorsement of the Motor Carrier Act of 1980, insurers are still liable for claims from Vehicle Identification Numbers (VINs) not listed on the policy.
Enter TruckerCloud, an innovative insurance telematics data platform that harnesses the power of Electronic Logging Devices (ELDs) and onboard cameras. Among its suite of tools, the TruckerCloud Heartbeat Monitor stands out as a game-changing solution. It allows insurers to monitor the number of vehicles and VINs within an ELD account, identifying active assets using real-time mileage data. This technology is vital in resolving the issue of unscheduled VINS, reducing leakage, and enhancing the precision of insurance underwriting in the trucking industry.
In a recent case, a Managing General Agency (MGA) discovered a significant discrepancy in their client's Auto Liability policy. Utilizing real-time mileage data provided by TruckerCloud's Heartbeat Monitor, the insurer uncovered a startling discrepancy: with 90 vehicles running significant mileage on a recently-written 45 vehicle policy, the client was only paying half of the premium that their exposure warranted. While other systems, such as FMCSA SMS, had failed to identify these additional active VINs, TruckerCloud quickly revealed the true numbers.
Armed with clear-cut and precise data, the insurer was able to address the underreporting directly with the broker involved and rectify the policy to confirm accurate premium calculations. Given the magnitude of the underreporting in this case, the insurer saved themselves from $500,000 in premium leakage.
The success of TruckerCloud’s Heartbeat Monitor demonstrates the transformative potential of advanced telematics in reshaping insurance underwriting and risk management in commercial auto. TruckerCloud continues to provide its insurance clients with innovative solutions and lead the way towards a more efficient and reliable future.
