The cost of commercial auto insurance has been steadily increasing for years. This article will focus on why companies are continuing to see their commercial auto insurance expense increasing, and what they can do about it.
The core reason behind the increasing cost of commercial auto insurance, is an increase in claims. Insurance companies are seeing both an increase in the frequency of commercial auto claims, and the severity, or total payout of those claims. Simply put, insurance companies are paying more out in claims than ever before, and that is driving prices up. In forthcoming blogs, we will explore why this is happening, but in this article, we will focus on what businesses can do to keep their commercial auto insurance costs in check.
The purpose of the four initiatives outlined below is two fold. First, they can help reduce your commercial auto claims, which will help reduce your commercial auto insurance rates over time. Equally important, when you and your agent can demonstrate to an underwriter that you are intentional about reducing risk and claims, underwriters are more willing to negotiate and provide lower rates.
Loss Control Practices: The first thing business owners can do is review their loss control practices. If you don’t have clear, documented loss control practices, now would be a great time to implement a loss control program. I’ve included a free download of our 6 key components of commercial auto loss control programs at the bottom of the page. If you’d like assistance reviewing, creating or implementing your commercial auto loss control program, one of our advisors would be happy to help.
Driver Training Programs: Driver training programs should be tailored to fit the needs of your business. No two businesses are the same, and no two driver training programs should be identical. Reviewing your driver training program and tailoring it to the specific needs of your drivers and the regular risks they face, can not only help reduce claims and insurance costs, but helps keep drivers safe.
Qualify Your Drivers: Running Motor Vehicle Records (MVR’s) during the hiring process is simple and absolutely critical. Especially in today’s tight job market, it is tempting to overlook a driver’s history in order to fill an opening and meet demand. Unfortunately this can create a vicious cycle. Hiring drivers with a history of violations or accidents inevitably leads to more claims over time, which drives up insurance costs. Insurance carriers have both eligibility guidelines and rating tiers which, in a large part, are based on the MVR’s of the drivers you hire. Hiring drivers with activity on their MVR can have an immediate and dramatic negative impact on your commercial auto program.
Adjust Your Commercial Auto Insurance Program: There are all kinds of structural adjustments that can be made to a commercial auto insurance program to help you reduce claims and contain costs. Deductibles, reported driving radius, how vehicles garaged in different states are titled, and classification and rating of different types of vehicles are just a few examples. A trusted, experienced insurance advisor that is familiar with your industry can help you review these options and more.
If you would like to talk to a member of the Camargo Insurance team to discuss any of the items above, we’d love to connect.