Many trucking companies experience the annual dance with their insurance agent. The owner hasn’t heard from his agent all year, then he calls a few weeks before the renewal date asks if anything has changed. The answer is generally no. The agent then tells the owner some story about large claims in the industry and how that affected rates. The moral of the insurance agent’s story is simply the trucking company will pay more money than last year. The owner needs the coverage and with no better explanation available, he pays the premium again.
There are five main factors that contribute to the insurance costs for a trucking company.
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The Type of Truck You Drive. If you are driving a brand new Peterbilt as opposed to a 15-year-old Kenworth, your premiums will be higher. The replacement cost of the truck would be significantly higher; therefore the insurance company will charge you more to protect it.
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Driving Records. A clean driving record will save your company thousands every year. Some big red flags are DUIs, excessive speeding, and running stop signs. If you’ve got drivers with those problems, you could be paying thousands of dollars for those drivers’ mistakes.
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Type of Cargo. This plays a large role in the Motor Cargo Coverage that every driver should have or look into. The more expensive the cargo, the more expensive the premium. If what you’re hauling is fragile or can go bad if not properly maintained, the insurance company will look for more premiums. While in control of a load, the trucker is financially responsible for that load. If anything happens to it the trucking company is on the hook for the full cost. In the event of an accident, your company could also be liable for environmental damage.
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Claims History. Insurance will be there to help you through a claim. They pay their claims most of the time. However, they will increase your premium after. Fair or not, that’s the system. The best rates go to the companies that haven’t had a claim. While you can’t do everything to avoid a claim, there are some Cost Containment options available to you.
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Routes Hauled. Where you drive can have an effect on your premium also. Generally, the rates are more favorable to the companies that haul over long distances on the interstate than those that stay in a metro area. While it may seem counter-intuitive, the reason is that there is a lot more traffic in the metro areas. More traffic means a greater chance of an accident.
Of course, there are a lot of other factors that could affect your rates, but these are the major factors. Some you can control and save your company money, some you cannot. A great way to manage your insurance cost is to shop with multiple carriers each year.
As an insurance broker, we can help by doing the shopping for you. Call us for quotes for trucking insurance at 888.279.9701 or fill out the short form below and one of our experts will get in touch.