Why is Commercial Auto Insurance so Expensive?

While the cost for most commercial insurance segments are going down, national rating agency Fitch Ratings says commercial auto insurance rates are rising at an accelerated pace.  It also predicted that rates will continue to increase in the near future.
 
This news is probably making steam come out of your ears. Your Commercial Auto Insurance went up last year, and the year before that, and now it’s going up again!  What?  This may be especially troubling if none of your company vehicles has been involved in an accident for several years.
 
So, why are you paying More for Commercial Auto Insurance?  From multiple insurance company’s studies, below are a few of the factors you cannot control that are driving up commercial auto insurance rates.
 
Some of these include:

• A 3.3 % increase in year-over-year traffic
  
• One-quarter of drivers are talking or texting
  
• Medical costs climbed 1.5 times faster than other costs
  
• More frequent and more costly crashes
  
• Skilled commercial drivers are hard to find
  
• New technology in vehicles means more expensive repairs
  

Again, you may have a stellar driving record and none of your commercial vehicles has been involved in an accident; but insurance costs get spread throughout the risk pool.   To a certain extent, you are paying for other people’s mistakes.
 
Steps to Control Your Commercial Auto Insurance
The good news is that our insurance carriers are not all gloom and doom.  Below are ways you can help keep your commercial auto insurance costs in line.  You should start by:

• Implement a program that communicates expectations to employees
  
• Establish and enforce company policy on the use of vehicles
  
• Hire drivers that meet medical and regulatory expectations
  
• Know the risks when personnel use personal vehicles
  
• Train drivers, Take them on a ride along, Let them drive a route
  
• Regularly check employee driving records (we can do that)
  
• Review every crash involving your drivers (drug test immediately after)
  

While you can’t control what other companies or drivers do, you can take steps to ensure your employees follow safety standards when they are behind the wheel of your vehicles.  This will help you mitigate some of the costs you must pay.  As an independent insurance agency, we can help put standards in place.