As any business owner with a commercial auto policy likely knows, premiums can fluctuate and be somewhat unpredictable. Premiums are based on a number of factors, some are within your control, and some are not, including the vehicles, drivers, and accident history. And there are a number of influences that have caused commercial auto rates to increase in recent years, the biggest being claims.
According to Nationwide, the “Big 3” commercial fleet loss types – lane departures, rear-enders, and hitting pedestrians or cyclists – drive the majority of commercial auto claims. All three share common characteristics that make these claims hard to defend and difficult to close quickly.
Other factors affecting commercial auto rates are similar to those affecting personal auto rates. Still related to claims, they include:
- More miles driven, more accidents
- Higher medical costs
- Rising auto body repair costs
How to Control Your Business Auto Insurance Premiums
In general the best way to keep your commercial auto insurance premiums down is to avoid accidents. Nationwide offers these tips to improve driving-related safety within your organization:
- Establish and communicate your rules of the road. Five essential components of any driver safety program are:
- A comprehensive driver’s handbook
- A healthy, supportive business environment
- Sound driver management practices
- Job-appropriate vehicle management
- Prompt incident reporting and analysis
- Make sure you are hiring qualified drivers. Once you establish your company’s dividing line between acceptable and unacceptable driving history, use motor vehicle records (MVRs) to check drivers’ past moving violations and police-related collisions.
- Use training to reinforce safe-driving behaviors. Design your driver training to fit the needs and exposures presented in your operations. For example, instruction on driving in snow and ice conditions.
- Implement a distracted driving policy as part of your driver safety program. Because the use of hand-held and hands-free mobile devices poses a significant safety risk, hold your employee accountable by implementing policies requiring them to stay focused on their driving duties at all times.
- Make routine follow-ups a part of your plan. Check in with drivers regularly to ensure they’re following your policies and procedures. Scheduling ride-alongs or installing telematics technology can help alert you to habits that may need correcting.
If you have questions or concerns about your commercial auto premiums, don’t hesitate to contact the team at TCI. Especially before adding new vehicles and drivers. We can help you be better prepared and informed about upcoming changes in premium.