If you drive a commercial truck, you know that insurance rates have risen dramatically over the past few years. Running a successful business means keeping costs down. With higher premiums as the new norm for independent truck drivers and industry management, new approaches to insurance and insurance risks are essential.
Why Insurance Rates Rise
Your premiums are pooled with those of others paying for the same type of insurance. In theory, this gives the insurance companies the financial strength to cover large payouts. Unfortunately, things don’t always work that way.
Recently, a dire situation arrived at the doors of those providing insurance for independent truck drivers. As reported on TRUCKS, 2016 brought much higher-than-expected number claims involving commercial vehicles. The payouts depleted the cash reserves of an alarming number of insurance carriers. This caused such a drastic loss in profits, insurers reported their worst economic performance in fifteen years.
In response to the elevated risk, insurers raised their rates. They also started charging even higher premiums for new drivers, categorizing them as “high risk.”
The Challenge of Lowering Insurance Rates for Truckers
Faced with these challenges, how do independent truckers lower their insurance rates? Insurance companies have to not only cover the costs of doing business, they must show profits year-over-year, so a raise in rates after a red-line year like 2016 was inevitable. The lesson here is that lowering your risk has everything to do with lowering your rates. This moves safety to the front of the line when it comes to lowering insurance rates.
One way to increase safety involves improvements to the vehicles themselves. Many of the injuries and damages that occur in trucking happen on the receiving end–that is, to those driving smaller vehicles that collide with trucks. Finding ways to reduce those damages has inspired safety experts and truck trailer manufacturers to create improved underride guards, the bars that prevent smaller vehicles from driving underneath tractor trailers. According to TRUCKS, the Insurance Institute for Highway Safety recently honored a number of truck manufacturers for improving the strength of their underride guards.
Safety Cameras on Trucks
FleetOwner reports many truckers and trucking companies are installing cameras on their vehicles. Safety cameras help drivers maintain best driving practices, which results in fewer accidents and helps keep insurance costs lower. These cameras also help record who is to blame during accidents. This prevents frivolous lawsuits brought against truckers and trucking companies, which also lowers insurance costs.
Taking Control of Costs for Independent Truckers Insurance
An understanding of how insurance companies work and the challenges they face will help independent truckers to lower their insurance rates. A safety-minded driver with a similar minded team can prevent significant losses. Improved truck features, like stronger underride guards and safety cameras, will also help lower insurance premiums. When it comes to truckers’ insurance, understanding how the system works and that you can do something about it provides a welcome measure of control.