We Received the Following E-Mail from an Insurance Group

Brought to you by Idealsafe 402-474-4166 Website: http://www.idealease.com/ Friday Safety Brief May 21, 2004

(We received the following e-mail from an insurance group) The scenario noted below is one we discussed in a joint claims and underwriting meeting yesterday. We thought it might be enlightening information for a safety bulletin, to underscore the importance of [motor carriers] inspecting owner/operator units before agreeing to dispatch them. Insured: XXXXXX (fictitious name) Transport – August 9, 2003 This is an alleged un-recovered theft of an owner operator’s tractor. It is made complex by the fact that the vehicle was previously stolen from its prior owner in August of 2002, which owner was paid in full for his loss. The insurer of that loss, ABC Insurance Company (fictitious name), had a TPA who handled the claim, but failed to follow up on acquiring the title to unit from the lien holder, who instead sent the title back to the owner upon receipt of payoff. When the vehicle was recovered stripped a few months later, the TPA failed to inspect the salvage, and instead abandoned it as “junk.” The towing company who recovered it, sold the salvage for $500 to a local dealer, who called the prior owner, acquired the title, and had it changed to their name as a clear title. Then the dealer sold the salvage to the insured’s owner operator, allegedly for $13,000. The owner operator intended to restore the vehicle, added it to our policy in June 2003 for a stated value of $40,000 without an inspection by the insured, then acquired his own clear title to the unit in July 2003. In August 2003, the unit was stolen again, and claim was made by the insured’s owner operator for $40,000 alleging that he had completely restored the unit, although he has so far been unable to produce evidence of the restoration. Many of the parts were allegedly picked up as an exchange with the supplier for an unrelated motor the owner operator had purchased and later determined he couldn’t use, so very few parts invoices are available. Meanwhile, the TPA in the original theft has learned of the recovery, the $13,000 sale price of the original salvage, and the transfer of a clear title, and has seen the error of their ways. They have sued the original owner for turning the title over to the towing company. We have hired a coverage attorney to tell us what our rights and obligations are, and to review, among other things, the insurable interest of our owner operator if the title transfer was illegitimate.

Total stopping distance depends upon speed, road surface, conditions, and other factors. But speed is the main ingredient. Of course, when you need stop in a hurry, things get very complicated.

 Perception time: First, one must see and understand the problem, which is referred to as perception time. At highway speeds, this might take 100 feet or more.

 Reaction distance: Then there’s reaction distance, the distance you will travel during the time it takes you to react to a perceived problem and move your foot from the accelerator to the brake.

 Brake lag is the time/distance you travel until the brakes actually contact and begin to slow you down.

 Braking Distance: And last is the actual braking distance, which depends upon mechanical and surface conditions, and of course, primarily speed. This is the additional distance you travel, after perception time, reaction time and brake lag; just the time it takes your brakes to stop the vehicle

For large, heavy vehicles, the total stopping distance can easily be in excess of 400 feet. If driving at night, it is relatively easy to “over-drive” your headlights. In other words, you might not be able to see a problem in time to stop. Your only counter-measure is to slow down. In fact, if you are going too fast for any condition, you might not be able to stop in time to avoid a crash. Conditions include weather, road, traffic, driver and vehicle.

This publication is provided for information purposes only and is not intended as a complete or exhaustive source of compliance or safety information. This “Safety Brief” is advisory in nature and does not warrant, guarantee, or otherwise certify compliance with laws, regulations, requirements, or guidelines of any local, state, or Federal agency and/or governing body, or industry standards.