According to research, the cost of commercial vehicle insurance has been rising at a pace of 20%. Since the transportation business dominates the American market, this is a serious issue.
Truck drivers cover thousands of miles each month moving essential cargo to and from factories across the country.
However, having significant responsibilities involves significant hazards.
The majority of commercial trucking businesses experience some form of hiccups in their daily operations.
It ranges from broken supply chains, vehicle wrecks, automobile repairs, and maintenance to theft or fraud – leading to costly damages or complete cargo loss.
Commercial vehicle insurance is routinely purchased by trucking companies to protect their business and limit damages.
If your company is protected by a commercial trucking insurance policy, keep reading to learn how to reduce your premium costs.
8 Strategies to minimize the premium rates of your commercial trucking insurance policy
Insurance companies use several variables to calculate your commercial vehicle insurance prices.
If you are aware of what insurers are looking for, it may be simpler for you to locate a trustworthy coverage plan at a fair price.
Here’s a rundown of the top 8 ways to minimize the premium rates of your commercial truck insurance.
1. Use a single insurance company for your complete fleet
Businesses in the construction and transportation sectors commonly use a variety of insurance companies for individual automobiles. This frequently translates into higher insurance costs and rates. Choose just one insurance company to cover your complete fleet of trucks instead.
Most companies offer discounts and reduced interest rates when you include more vehicles in the insurance policy. Moreover, this helps to keep track of payments, which is necessary to maintain low premium rates.
But, how to decide if a trucking insurance policy is right for you?
You can take the help of online consultancies, which understand the business well.
Choose a leading global professional service provider, which works with startups, as well as, small- and medium-sized businesses. Check if it offers insurance coverage that is specialized, reasonable, and appropriate for your company’s individual needs.
If yes, they will make it simple, convenient, and quick for you to obtain the coverage you require at the best possible price. This allows you to return to your core competencies of providing excellent customer service, expanding your company, and overseeing daily operations.
2. Do not postpone truck maintenance
Among the major assets of your transportation service are your trucks. They serve as the foundation of your business.
Trucks, like all other machinery, require systematic maintenance for consistently good performance. Your company must follow a variety of federal and state regulations to avert paying hefty fines.
According to car detailing business owners, maintaining vehicles benefits your company’s financial flow and is a great way to improve your reputation in the industry.
Don’t wait until your vehicles break down to perform maintenance. The price of your commercial vehicle insurance is influenced by the state of your trucks.
Create and follow a proper fleet maintenance plan. Maintenance includes both replacement and prevention.
As an aspect of maintenance operations, you must regularly replace the vehicle’s lubricants, tires, or other elements that are susceptible to damage. Also, maintenance comprises upgrading older vehicles or bringing out-of-service lorries back on course.
The automobiles in your business should have modern equipment, which is regularly fitted and improved. These include accident-prevention gear created exclusively for business trucks.
3. Employ drivers who have an excellent history
Driver behavior and backdrops can heavily impact your business. Hence, hiring drivers with exemplary driving records is critical in helping you to reduce your insurance costs.
The simplest way to accumulate increased costs is to hire drivers having a questionable driving background – because insurance providers take risk into account when deciding your premium. This implies that you must avoid hiring drivers for your company if they have a record of accidents, traffic rule violations, and tickets.
Your expenses will increase since these drivers typically give insurers a greater risk index. It’s important to keep in mind that the opposite is also true.
Insurance companies essentially take into account both your drivers’ excellent and bad driving history. Hire drivers with little to no history of traffic violations and collisions.
Strong contenders would have not more than three minor offenses within a three-year span. Certain drivers may inadvertently make errors, but a repeat offender could cost your business money. Also, take into account the heightened likelihood that a negligent driver will endanger your vehicles in accidents.
4. Maintain regular fleet checks
The Federal Motor Carrier Safety Administration and the US Department of Transportation mandate trucking companies to record their checks on Daily Vehicle Inspection Reports.
Since your company must already be conducting daily inspections, implementing this strategy and cutting costs on premiums are considerably simpler.
The truth is that failing to undertake and properly document vehicle inspections could result in fines and the revocation of your permit.
Your business regularly needs to submit a non-compliance-related insurance claim after receiving a ticket for non-compliance.
It results in your business paying huge premiums. To handle vehicle issues before they escalate and harm the public or other vehicles, you must do daily inspections and precisely complete the necessary paperwork.
5. Keep your DOT safety and tax records clean
Your DOT (Department of Transportation) safety record includes information such as your owner/operator, fleet DOT safety scores, inspection ratings, breaches, and other details.
Keep an eye on your DOT safety record and maintain a stellar reputation. Additionally, implement extra security features or programs.
The importance of safety to your organization can be demonstrated to insurance providers by implementing safety measures, including cautionary signs, company safety programs, and safe driving education.
Pro tip: Consistently evaluate the safety precautions your transportation firm employs.
Next, eliminate tax liens and judgments before contacting insurance firms.
It is a formula for annoyance and issues to request lower rates once you have unpaid taxes, lawsuits, or both.
Judgments are much more prevalent among businesses that use commercial vehicles due to the greater risk of traffic tickets and accidents. However, the best part is that steering clear of them and making sure your company trucks have the lowest possible insurance premiums are both quick and simple processes.
Seek a commercial loan or business credit line to settle your tax debt. You will get more financial and service alternatives than you would imagine for getting rid of judgments.
6. Work to reduce your fuel costs
It is a well-known fact in the market that a significant overhead cost for transportation businesses is fuel. You can save costs and improve customer experience by taking charge of your gas spending.
Fuel tracking devices are now available on the market. Additionally, several companies have opted to use gas cards instead of paper receipts. You can also consider this option.
Planning your routes carefully is a great method to save money on fuel.
Fleet management tools will enable your company to maximize the efficiency of your itineraries, saving time and valuable resources. Your routes have an impact on your company’s trucker insurance rates as well.
Numerous factors, such as adverse weather conditions and the volume of commuter traffic, increase the level of hazard.
As the potential for harm on your journey rises, so do your premium rates. If you aim to save cash and possibly reduce fuel costs, stay away from cities and locations with bad weather.
7. Consider employing tracking software
For your trucking business to be successful, you must map your routes. Investment in vehicle tracking systems like GPS (Global Positioning System) is a great way to maximize your performance.
GPS and telematics employ fleet management software for collecting real-time route statistics. You can plan your travels using these facts – to come up with mileage-effective itineraries.
Once you have an insight into the fleet’s route record, it is easier to evaluate and plan the most efficient routes, which will assist in reducing overhead costs on other factors like gasoline. The less time you spend commuting, the lesser the risk index.
8. Pay monthly for annual insurance plans
Most insurance companies give their clients the option of paying greater annual sums at significantly lower rates or reduced monthly sums at increased premiums.
Business owners frequently employ monthly installment agreements to prevent hurting cash flow. Rather, you might use a business term loan with options for monthly payback to cover the substantial annual installment and then clear the debt with cheaper monthly installments.
Some payments are more challenging than others. Once payday finally arrives, cash flow may not be on your side – based on the season, altering demands, and several other factors.
For each payment, be sure to keep a backup strategy.
Making late payments is the single biggest motivator for an insurance provider to raise your premium – whether it be by momentarily lowering prices from other operational processes or by seeking low-rate short-term types of financing so that they don’t interrupt cash flow. Hence, paying your installments promptly is crucial to keeping low commercial truck insurance premium rates.
Bonus! Consider raising your deductible
When effectively implemented, the aforementioned steps can lower your insurance costs. However, consider changing your truck insurance plan if, despite taking the above steps, you continue to pay exceptionally high premiums.
You can decrease trucking insurance prices by raising the deductible. Nevertheless, you’ll need to pay more upfront if an incident happens. Pick a deductible, which your company can afford without paying additional charges.
Before making any changes to your existing policy, arrange a policy re-evaluation with your insurance provider to determine the best options for reducing your premium rates.
Maintaining low premium rates on commercial truck insurance is not always easy.
Even after following each of the above steps individually, you may not greatly reduce your premium.
But, doing so will enable you to keep your truck insurance policy’s minimal layer of coverage in place.