Owners/operators can face a number of challenges when it comes to securing trucking business insurance at reasonable rates. We think it’s important to identify a few factors that can impact how insurance rates are determined, and provide some tips that may help you manage the costs of your trucking business’s coverage.
How insurers typically decide on insurance premiums
Each insurer determines their rates a little differently, so we’ll start you off by explaining a few components that we often consider when determining a business insurance quote. Typically, some of the big factors can include: what you haul; where you haul it; and your driving record/experience.
It’s important to mention that every business is different, and you should always speak directly with an insurance specialist if you have questions about a business insurance quote or policy.
What are some factors that can impact your business insurance costs?
Type of cargo you are hauling
Different types of cargo have different exposure rates depending on durability, replacement value, and potential clean-up costs.
High-value or dangerous goods will typically have higher-than-average premiums, but high premiums are not exclusive to high-value or hazardous goods. Loads of hay, cotton, and scrap metal, for example, are all highly combustible and can be more expensive to insure. Talk to your insurance broker and insurer about what you haul and make sure you understand how they look at what you haul.
No matter what you’re hauling, having experience with that type of cargo and the right equipment can help limit your losses, which can help keep premiums down over the long term.
So will knowing the risks of your cargo and taking steps to prevent losses. For example, refusing to load produce in the morning when it’s covered in dew may lessen the chances of mold and mildew forming on it while it’s being transported. Taking care where you park and adding pin locks to protect trailers can be effective in preventing thefts, which can also reduce the likelihood of a loss.
Simple actions like these can go a long way in reducing your likelihood of filing a claim.
Driving locations and vehicles
Differences in provincial and state laws and regulations can have a big impact on the average cost of a claim. Claim costs can vary by hundreds of thousands, if not millions of dollars, depending on where they occur. This is largely because of the likelihood of lawsuits in certain regions.
We understand that you can’t always turn down profitable business in high-risk regions. However, a good insurance partner can help you weigh the revenue you’ll earn on a particular route against the costs of the exposure that comes with it.
Talk to your insurance broker and your insurer about where you’re hauling and find out what kind of impact it may have on your insurance. Also be sure to talk to them before taking on a new load or customer.
Your driving record and employment history
Most insurance companies identify drivers based on their training, driving history, and if they have any citations or violations. A driver’s record can often impact insurance rates when looking for a business insurance policy.
A simple way to manage your record is to keep a close eye on your CVOR/CVDR rating and focus on ways to get a better rating. The practices that lead to better scores typically result in fewer accidents as well. Our Risk Services team has developed a number of courses specifically targeting these opportunities, and other industry resources are also available. Taking the time to find out how to address common problems can make a big difference to your insurance costs.
Keeping business insurance costs down
Report accidents immediately
Reporting accidents immediately enables your insurance company to document evidence, interview witnesses if necessary and avoid potential legal issues. Using a Driver’s Collision Report can help ensure you capture the right details at the scene and limit your exposure.
Ensure you review your trucking business’s insurance policy
Your insurance broker and your insurer can offer you advice specific to your business about how to take steps that may help keep your costs down. Be sure to talk to them often – especially anytime your business goes through a major change. You can learn more about our transportation insurance here.
