AADA’s endorsed partner for property, casualty and garage liability insurance, Federated Insurance, shares its Auto Dealer Claim of the Month for May and June 2026. This feature is designed to raise awareness of the hazards facing dealerships and to offer dealers tips and best practices for avoiding these problems.
Stay Alert to Avoid Transport Scams
Auto Dealer Claim of the Month, May 2026
A customer from the Southwest contacted an East Coast auto dealer to purchase a high-value specialty car from their inventory. After receiving payment, the dealer hired a broker to ship the vehicle across the country. A carrier picked up the car, but it never arrived at the customer’s location. An investigation revealed that criminals had infiltrated the broker’s email and posed as the carrier to steal the car.
Claim Amount: $175,000
Risk Management Tips to Consider:
- Research and Review Vendors: Verify that brokers and carriers register with the Department of Transportation (DOT) and hold a valid Motor Carrier (MC) number. Check reputable sources, such as the Better Business Bureau, to spot a history of negligent or dishonest practices.
- Watch for Fraud Indicators: Scammers often price fake services below market rates to lure victims. Avoid deals that seem too good to be true. Evaluate the professionalism of all communications and flag any emails that contradict what you discussed over the phone.
- Validate Delivery Details at Pickup: When a driver arrives, call the broker to verify the driver and MC number. Question last-minute carrier changes, especially if notified only by email. Ask the driver to confirm transport details, like the customer’s name. Avoid carriers that miss properly posting DOT or MC numbers on their trucks.
- Act Quickly to Help Prevent Scams: Report suspected crimes to authorities immediately. Save all documentation, including emails, pickup surveillance video, receipts and contracts.
Take Employee Complaints Seriously
Auto Dealer Claim of the Month, June 2026
A new employee approached the general manager of an auto dealership to file a complaint about the dealership’s office manager. They stated that the office manager had belittled them, threatened violence and had created a toxic environment. Others came forward with similar statements, noting that the office manager had mocked employees. The general manager spoke to the two employees at the same time, advising that they didn’t have to like each other, but they did have to get along. Shortly after, the new employee resigned and filed a lawsuit, citing threats of violence and a hostile work environment.
Claim Amount: $120,000
Risk Management Tips to Consider:
- Implement and Enforce a Fair Complaint Process: Give employees a clear way to report concerns without fear of retaliation. Investigate each complaint quickly, fairly and consistently each time. Document each step and any action you take. In high-risk cases, involve HR or legal counsel.
- Train Managers and Employees: Teach harassment prevention, discrimination awareness, proper hiring and termination practices, and documentation standards on a regular basis.
- Enforce a Professional Environment: Communicate to employees that they should avoid sarcasm or gossip, limit personal topics and use polite language. Remind supervisors that their behavior shapes workplace culture.
This article is for general information and risk-prevention recommendations only and should not be considered an offer of insurance or legal or other expert advice. The recommendations herein may help reduce, but are not guaranteed to eliminate, any or all risk of loss. Coverage will be determined by the facts of the claim and the terms of your policy, if approved for issue. The information herein may be subject to, and is not a substitute for, any laws or regulations that may apply. All products and services not available in all states. Qualified counsel should be sought with questions specific to your circumstances and applicable laws. © 2026 Federated Mutual Insurance Company.
