Truck insurance is essential to protecting your business from vehicle damage and lawsuits. But it’s a costly expense for independent and small businesses, with rates going up to 20 percent this year; the prices rise more with minor claims as well. Along with inflation, these factors only add up with the company’s other overhead and operational expenses.
How can you reduce truck insurance premiums while still getting the best services?
Insurance companies account for several factors when computing the premium. Read on to find out how they affect your premium and how you can reduce the quote they give you.
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Rating Factors That Affect Your Truck Insurance Premium
The following factors influence the overall cost of the truck insurance premium:
Your truck’s make and model. The value and condition of your truck are the biggest factors in truck insurance premiums. Age is secondary to how well you’ve maintained the truck in the last few years. Your models should be working well thanks to regular checks and modern equipment.
Your truck’s age. It’s best to use newer trucks or phase out your older ones. Insurance companies will quote higher for older vehicles as they have a more expensive upkeep compared to newer models. Stick to trucks that are less than ten years old.
Your driving record. Insurance companies also look into your driver’s records. If the majority of your vehicles have been in fewer crashes, then they pose a lower risk for the insurance company. Drivers involved in multiple accidents come at a cost that the insurer will charge extra for. Other records to keep clean are violations, inspections, your selection (ISS-2) scores, and your fleet DOT safety rating.
The amount of coverage you need. What type of coverage is the fleet prioritizing in its insurance? Is it physical damage from accidents? If this is the case, the premium will be based on the equipment value.
In terms of liability, you’ll have to consider four coverages:
- General liability protects your business from bodily injury or any property damage that doesn’t involve a vehicle, like accidents in your business location or contractual exposures.
- Primary auto liability is a requirement from federal regulations as it covers the injury of a third party in an accident. You’ll need to carry this for all your rigs, including the leased ones.
- Non-trucking liability insurance pays for an accident for a truck or driver when they are not under dispatch.
- Non-owned liability protects a trailer you are pulling for another party.
The deductible you choose. A deductible is the amount of loss or damage that you (the insured party) will be responsible for in an insurance claim. The larger the deductible, the lower your truck insurance premium. The recommended maximum deductible is $2,500.
What are Contractual Insurance Requirements for Trucking Companies?
Truck insurance companies start with the primary liability and build your package from that base requirement. Apart from the liabilities previously listed, the coverage can also include the following:
- Physical damage to cover collision, vandalism, theft, and natural disasters effects.
- Motor truck cargo offers protection if a commercial truck is damaged or lost.
- Rental reimbursement gives you money for renting a replacement truck in case the original needs repairs.
- Medical payment covers medical bills for you or a passenger in the truck.
- Trailer interchange provides physical damage insurance for any trailer pulled within a trailer interchange agreement. It includes protection from collision, explosion, vandalism, theft, or fire damage.
How to Manage Your Truck Insurance Premium
Now that you know the factors affecting your premium, here’s how you can reduce the quoted cost:
Utilize vehicle and dash cam video telematics. Pull the data from your fleet management software, such as the drivers’ scores and safety analysis. Proof of how well your drivers perform will make a strong case for a lower insurance premium.
Be familiar with your policy and coverage. What is your current insurance coverage? Is the coverage still relevant to your equipment and drivers’ abilities? Are you overspending on one aspect and need to focus more on other coverages?
Establish a safety program. Invest in a safety program to which new and seasoned drivers can always refer. Encourage them to review their videos and self-coach to improve their overall performance. Schedule regular one-on-one coaching sessions to discuss video footage, specifically instances where they drove defensively or any times that need to be avoided. Reward your best drivers with benefits like a gift card or bonus so all drivers see how safety goes a long way.
Get quotes from multiple truck insurance companies. Shop around and see how different companies price their coverage. Compare them in terms of cost and other factors like service. You also want an insurer that’s easy to reach when needed.
Review your coverages. Don’t forget to review the coverages all companies offer. Who gives the most bang for buck? Is it better to invest for safety and protection in the long run?
By staying up to date on the factors that impact your premiums and establishing an effective safety program, you can reduce your fleet’s insurance premiums in the long run. Take the time to learn more about how Netradyne’s fleet safety system can help you and your team take on insurance claims with confidence.