Facility’s newest approach for cracking down on trucker misrepresentations
The insurer of last resort is trying a new approach to get Alberta truckers who are misrepresenting where they’re headquartered in order to get cheaper rates back into the standard market.
Facility Association (FA) is implementing a telematics program in Alberta that will collect geographic information on its participants to help ensure their premiums accurately reflect their risk.
The program’s objective is to collect data that will help truck drivers and operators correct poor driving behaviours that are observed through a video-enabled telematics device. Foresight Insurance Analytics Inc will install the device and manage all the data received. A score is generated on a daily basis and shared online with the customer.
But the geographic info collected through the program will help FA in its ongoing crackdown on truck operations that misrepresent where their trucks actually operate.
Most importantly though, participation in the telematics program may qualify truckers to return to the standard market. Enrollment in the telematics program is voluntary, and participants would qualify to receive a premium reduction of up to 8%. The program is effective May 1.
This new program builds upon and in concert with the surcharge matrix FA introduced last October.
“It’s another tool for Facility Association that will help work towards preventing misrepresentation about where vehicles are actually being operated and being driven,” Derek Tupling, spokesperson and vice president, government relations and communications at Facility Association told Canadian Underwriter.
Around 2019, FA saw an increase in the number of trucks being registered and insured in Alberta. Then, a similar situation emerged in Nova Scotia. Upon investigation, FA realized the vehicles were being registered in these provinces but operating primarily in other jurisdictions in an effort the “game” the system and get lower rates.
“The objective is to ensure the premium being charged is reflective of the jurisdiction in which you’re operating,” said Tupling of the new program.
The telematics program and the rating mileage matrix (or surcharge matrix) can be used together by FA, Tupling explained.
Introduced in October, the surcharge matrix allows FA to apply a premium surcharge to trucking companies that drive more than 50% outside of the Atlantic provinces and Quebec. On the other hand, a company may see premium reductions based on where they mainly operate.
The surcharge would be applied for the territory where the truck operates the most. For example, if the truck operates outside Atlantic Canada more than 50% of the time, the surcharge rates apply.
“If the telematics demonstrate you’re operating in one jurisdiction, but you said something different, then the rating mileage matrix will take over and the premium would be adjusted upon renewal,” said Tupling. “Not only will it impact your rating on your telematics initiative, but you will also be subjected to a different premium based on the information we gather that’s outlined in the rating mileage matrix.”
Since the telematics program is voluntary, FA is urging brokers to have this discussion with their clients so they can get back to the standard market.
“We’re actively working on promoting the program in Alberta and making sure that brokers have an awareness of it, so that if they have a book of business that’s insured through FA presently, and they’re truck drivers, that they’ve got this program that’s available for them and we can make them aware of that.”
The telematics program also has the support of the Alberta Motor Transport Association and the Insurance Brokers Association of Alberta.
Feature image by iStock.com/vitpho
