Commercial auto insurance rates have been steadily increasing and show no signs of slowing. Pinpointing why rates are increasing is a complex challenge. Like so many problems, the answer to this question is multi-faceted, and therefore the solution is multi-faceted. Below we will review three common causes of increasing commercial auto insurance rates and what you can do to take control.
How to Take Control of Rising Commercial Auto Insurance Costs
Modern behaviors, including texting while driving, as well as current realities like increased labor and repair costs, shortages in the automotive supply chain, and increased incidents, are just a few of the contributing factors to the problem of rising commercial auto insurance premiums. Car insurance premiums are, of course, based on risk, and risks are often outside of our control. But that doesn’t mean you have no control. If you want to lower your costs, here’s what you can do.
1. Reduce Distracted Driving
Unfortunately, educating your drivers on the dangers of distracted driving isn’t enough to mitigate the problem. Most people have gotten the message that texting + driving = bad, yet it still happens.
According to an article by BankRate.com, “At any given moment, 660,000 drivers are using a cell phone while operating a vehicle. Every year, about 400 fatal crashes are caused by texting and driving.”
While technology got us into this mess, it can also help us dig our way out of the texting and driving epidemic. Companies like AT&T and Apple offer cell phone blocking technology, while other companies like Volvo and Subaru are working on driver monitoring systems that include eye-tracking devices to monitor for distraction.
The point of technology should not be to monitor your drivers, as monitoring has been proven to have negative consequences in the workplace, but rather to encourage drivers to self-monitor. Most of the time, reaching for our phones is not a conscious behavior. Adding a pause between the desire and the reach can be enough to curb distracted driving.
2. Lower Repair Costs
According to Global Fleet Management, “A convergence of multiple factors triggered by the COV-19 pandemic has increased scheduled and unscheduled repairs costs for fleets in calendar-year 2021…Overall, there has been a shift from planned (down 3%) to unplanned (up 3%) spend.”
To help reduce repair costs, companies can follow this simple checklist:
- Make sure vehicles don’t sit too long as inactive vehicles can increase unplanned repair costs.
- Replace older fleet vehicles or plan for the added repair cost of keeping older vehicles in service.
- Consider replacing older vehicles with EVs. EVs have fewer components, which helps reduce overall fleet spend.
- Maintain a list of trusted vendors and partners who can help you source parts and labor.
- Finally, hire a company with industry experience, like LAP RRG, to help you manage your claims more effectively, reducing costs.
3. Lower the Number of Claims that Involve the Legal System
Lockton reports that rising bodily injury costs is one contributing factor to auto liability losses. Caused by increasing medical care costs, an increase in attorney involvement, and an aging population with decreasing health, costs are on the rise. Within this equation, the only factor you can control is the insurance company you choose.
A company with experience can handle claims quickly and correctly, reducing attorney involvement.
Whether you’re looking for coverage for a small fleet or need to add another vehicle to your existing commercial auto insurance policy, we highly recommend getting a second opinion. We can help examine your insurance rates to make sure that you are paying the best rate possible while maintaining correct coverage for the state you operate in. Contact us at +1 (908) 224-9661 or through our website by navigating here.