Watch Out for “Ghost” Cargo Insurance!

Watch Out for “Ghost” Cargo Insurance!

Dear truckers, lately there have been many cases of nationwide insurance fraud done by some unscrupulous insurance brokers who have defrauded many small cargo transport companies.

In a case that happened in the state of Georgia, a broker from a company cheated hundreds of owner-operators by telling them that the insurance policies they bought were in force and fully covered their cargos. What was really happening however, was the broker kept their cargo insurance money payments and did not buy their insurances policies, or in some cases just bought the minimal policies. He was not doing what the customers requested, giving fake coverage policies and receipts to his customers. This happened for more than two years and approximately 800 companies in the states of Alabama, Arkansas, Colorado, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Missouri, Mississippi, New Jersey, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, and Virginia were defrauded, paying about $3.7 million to this broker.

In another case in California, the broker company forged the cargo insurance policy sold to a small company of heavy cargo, affecting all the states of the American Union. The carrier needed to have an insurance covering their loads at national level however; the broker bought a policy that only covered the loads in California and not in other states. Fortunately, there wasn´t any accident, but now the carrier has to pay more for his cargo insurance because there was a lapse in his coverage, causing significant economic losses.

In other cases, the owners of trucking companies do not realize the fraud until there is an accident or something happens to the load, when they are making a company insurance claim. At that moment, it is too late and the damage is not covered by the policy because it was not in force on the date of the accident, causing big losses and even the possibility of the affected company’s closure.
As always, call the “The Defender of Truckers” offices at (800)970-5530 if you need help or have any questions or comment.

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