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Tips In Reducing Rising Insurance Costs in the Trucking Industry

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Tips In Reducing Rising Insurance Costs in the Trucking Industry

Written by Lucas Kibby, CleanFleet
Carriers that have had questionable safety records are struggling to find insurance.

A small carrier with a clean safety history will pay $5,000-$7,000 in insurance per truck. If a carrier is based in a high-risk jurisdiction, such as New York, New Jersey, Florida, Louisiana, and California the rate could be 25-30 percent higher.

Since 2013, according to data from the American Trucking Research Institute, insurance premium costs per mile increased more than 17 percent and between 2017 to 2018, they rose 12 percent.

With increases between 10-17 percent for the third year in a row, policies are approaching 7.5 percent of a fleet’s annual revenue. In 2018, they were about $0.80 per mile.

This rise in rates is due to increasing litigation with truck-involved crashes generating large increases in civil litigation cases, out-of-court settlements, and jury awards.

While bigger companies can afford the rising cost of coverage, rising insurance rates would continue to impact small truck owners moving forward.


Tips In Reducing Rising Insurance Costs

Reducing insurance costs requires looking at your operation the way an underwriter does. Are you doing everything you can to reduce risk?

Generally, trucking companies with low driver turnover, minimal loss activity, utilizing telematics data, and great CSA scores are in a better position to gain access to more insurers with better pricing.

Below are some tips to help tell a positive story of your company’s safety record.

1. Prevent Negligent Hiring

The best way carriers can protect themselves from negligent hiring is maintaining a complete driver qualification file that complies with the seven hiring processes outlined in the Federal Motor Carrier Safety Regulations [FMCSA 49 CFR 391], which outlines the minimum requirements for hiring commercial motor vehicle drivers.

Carriers need to make sure to retain your best current drivers and not to hire problems that continue to have problems throughout their employment.

When you do hire new drivers, make sure they are not put into a bad position, such as loads scheduled too tightly that can push unsafe habits, like driving too fast and hard.

2. Prevent Distracted Driving

There is no dispute that distracted driving significantly increases the likelihood of catastrophic accidents.

One way to prevent being targeted by an expensive personal injury suit whenever a driver is involved in an accident is to do all you can to prevent distracted driving.

Recent “nuclear verdicts” in cases involving commercial vehicle accidents with distracted driving make clear that juries will hold not just the driver accountable, but the motor carrier as well.

Some crashes can’t be avoided, and no driver or employer should be blamed for them. But in the current tort-happy legal climate, it behooves all truck operators to do all they reasonably can to prevent or mitigate accidents on the road, especially calamitous ones.

Fleet managers need to dive into their safety stats to identify what needs fixing first to make their fleet attractive to insurers. Some ways to do this is to improve driver recruitment and retention and leveraging telematics data from your in-cab electronic logging devices.

Want compliance experts to look at your files as a mock FMCSA audit? We can help! 

Large fleets that utilize their telematics data understand how their data can help protect against merit-less claims by third-party attorneys. There is an incredible amount of information that can be harvested to improve both operations and safety if used correctly, such as information about the speed, location, harsh acceleration and braking, and mechanical condition of trucks.

Telematics equipment often include video systems to improve safe driving practices and to exonerate drivers in crashes that could not be prevented.

How this information is shared with drivers, management, and customers can have a direct impact on the performance of the organization.

3. Prevent A Bad Company Culture

Another important piece to help to bring down premiums is the culture of your organization. Ask yourself, “Is management connected with safety?” It should not be an issue to get top management to weigh in on policies and investments.

The best place to start is showing proof of documented safety policies for drivers and managers and proof that they are being followed, such as documenting completed training.

More training equals a better safety profile, and insurers want to see that, if you are having a driver dealing with a specific bad driving habit (such as speeding or harsh braking), that follow-up training is done to help change these habits. Best practice is to have an organized training regimen with drivers methodically being tracked on progress.

Keeping the training materials online will make it easier to pull up reports, since it can be billable work for a broker to work on profiles, being organized will save the trucking company money  and the broker will be able to tell a better story about the fleet to an underwriter.

Don’t miss the free 2020 Trucking Safety & Compliance Conference NW brought to you by Orange Commercial Credit on Friday, Jan 31st, 2020 in Portland, OR and live-streamed online nationwide. Continental breakfast and free lunch available!

Learn more and register today.

17 Jan, 20

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