How Independent Truckers Can Save on Insurance
Truck insurance is a necessary expense that every truck owner has to pay, often making it one of the biggest costs after the truck payment itself.
Many factors affect how much an owner-operator will pay for their insurance, and many of these factors are beyond their control. This can make insurance a significant concern for owner-operators, especially those who are just starting out.
Even if owner-operators do everything right and avoid accidents or citations, their insurance premiums can still rise each year. This has been a common trend for commercial auto insurance, including trucking, since the pandemic began in 2020.
In some cases, premiums can increase significantly. For instance, a truck owner recently faced a situation where their renewal premiums were set to double, adding an extra $11,000 to their annual costs. Despite having a clean driving record and being active in the industry for many years, the increase was unexpected.
Insurance agents often have difficulty explaining why premiums rise. Factors influencing insurance costs can vary widely. Insurance experts note that premiums are based on estimated potential losses, which depend on individual risk traits, some of which owner-operators can control, and environmental changes that they cannot.
Individual risk traits may include an operator’s safety record, equipment condition, and operating location, as well as factors like the driver’s age. Environmental factors that affect premiums include changes in driving habits, vehicle repair costs, medical expenses, and legal issues, particularly as lawsuits against trucking companies have increased. When costs rise in these areas, premiums can also go up, even for operators with good safety records.
Industry leaders have reported continuous increases in the commercial auto insurance market for over 11 years. Some owner-operators have experienced substantial premium increases over the past few years. However, others have managed to avoid similar hikes, indicating that individual experiences can vary widely.
Surveys show that many owner-operators pay different amounts for insurance. A significant portion pays less than $10,000 annually, while some pay over $15,000. If you’re aiming to be part of the lower-paying group, there are steps you can take to improve how insurers view your business.
Improving Your Insurance Standing
The key focus is on risk assessment. Beyond having a clean driving record, owner-operators should aim to maintain a good safety record as well. Insurers may look at inspection histories in addition to personal driving records.
A spotless inspection record can help keep rates down, while a poor safety record or hiring unsafe drivers can lead to higher premiums. It’s essential to avoid claims if possible, as they typically lead to higher rates, even if the driver has been responsible.
Insurance experts suggest that insurance carriers prioritize an owner-operator’s loss history or claims when determining rates. If an operator has no claims, they still may face a small premium increase due to overall market trends, but adding claims worsens the financial outlook.
To mitigate these issues, collaborating with an insurance broker can help manage any outstanding claims. Brokers can advocate for lowering the amount of money set aside for claims that aren’t settled, which can significantly impact renewal costs.
For example, if there are unresolved claims, having a broker negotiate to reduce the funds needed for those claims can be beneficial. Lowering the reserves before renewing the policy is crucial for keeping premiums manageable.
Conclusion
In summary, addressing open reserves before the renewal period is essential. Having an experienced insurance advocate can greatly assist in securing the best possible rates while ensuring adequate coverage when needed. Brokers understand the market and work on behalf of operators to achieve the best outcomes.
Understand the importance of logistics and the challenges faced by trucking and delivery businesses. If you’re looking for tailored insurance solutions for your trucking operation, contact us today to see how we can support your business.
Cook Insurance Group: Your Partner in Trucking Insurance
With over 20 years of experience in the trucking insurance industry, Cook Insurance Group offers unparalleled service and expertise. Serving large fleets, small fleets, single-owner operators, tow trucking operations, and charter bus lines, we focus exclusively on the trucking industry to provide the best insurance solutions. Our friendly, bilingual staff is dedicated to helping you find the right insurance protection at the right cost.
At Cook Insurance Group, we tailor our services to meet the specific needs of both small and large fleet trucking companies. Our representatives manage every aspect of your insurance program, ensuring you have the best plan for your unique needs. We offer immediate certificate and ID card issuance, 24/7 certificate availability, and a client portal for easy access to certificates, claim status, and policy details.
Our prompt and reliable service includes 24-hour claims reporting for physical damage and motor truck cargo.We also provide educational seminars for management and drivers, licensed risk managers to assist with CSA scores and driver training, border risk coverage (NAFTA), and mid-year loss run reviews. Whether you are located in Texas, Arizona, or Arkansas, choose Cook Insurance Group for all your trucking insurance needs.
Choose Cook Insurance Group for all of your trucking insurance needs whether you are located in Texas, Arizona or Arkansas.
