Commercial trucking companies are both vehicle operators and cargo transporters. As a result, they need appropriate commercial insurance and motor vehicle coverage in order to appropriately protect themselves against their operating liabilities. It is tailored trucking insurance that will be just one of several policies that will protect both the company and its drivers, whether they are on dispatch or parked in a lot.
However, like with all other policies, you must make a regular premium payment to your insurance provider in order to maintain your coverage. It’s only natural to want to pay as affordable a price as possible for your coverage, given that it will be an ongoing overhead expense. However, what consumers must realize is that numerous factors can influence the overall cost of their policy.
Why Trucking Insurance Policies Vary in Cost
It’s possible for two trucking companies to carry identical insurance policies, but still pay different costs for their coverage. This is because numerous risk factors influence the cost an insurer chooses to charge a policyholder, and these factors can vary significantly from policyholder to policyholder.
An insurance risk is how likely you are to file a claim on a given policy. When you file a claim, this will represent a cost risk to your insurer. After all, when claims are filed, there is a chance that the insurer will have to pay money on the policyholder's behalf. Those who are more likely to file a claim are those who will be more likely to cost the insurer more money. Therefore, high-risk operators are often going to pay more for coverage.
Factors Influencing the Cost of Your Trucking Insurance
There are numerous factors that might influence the cost of your trucking insurance, and different insurers will assign different weights to each. Those that often have the biggest impacts on your premium are:
Vehicle Value
It is going to cost more money to repair or replace a new truck as opposed to one that is several years old. All vehicles depreciate as they age. Therefore, when you add new trucks to your fleet, you are likely to see your insurance premiums rise. Keep in mind, if you finance your truck, then you might be required to purchase certain coverage as stated by your lender.
DOT Records and Driving Records
By law, the U.S. Department of Transportation (DOT) requires all interstate commercial truckers to carry minimum levels of liability insurance, though requirements will vary based on several operating factors. Truckers who fail to comply with these regulations will face significant penalties.
Additionally, truckers who have tarnished driving records (I.e. a history of accidents, DUI charges and other infractions) are likely to see higher insurance rates as a result. These operators have proven that they engage in dangerous practices behind the wheel. As a result, they are more likely to engage in activities that could lead to higher insurance liabilities. That’s why it’s imperative to monitor the driving records of all truckers operating under your company’s authority.
Insurance Claims History
When someone files a trucking insurance claim, they cost their insurer money. Therefore, they become higher risks in the eyes of the insurer. As a result, trucking companies that begin to accumulate numerous accident claims will wind up costing the insurer more money. As a result, insurers often must increase rates on those who file more claims. This is related to the simple laws of supply and demand.
Vehicle Usage
How truckers operate might make them more or less likely to file an insurance claim. For example, those who operate primarily in metropolitan areas will face much more traffic and much higher accident risks as a result. Those on long-haul routes, or those who operate in rural areas, might face comparatively fewer safety risks, and as a result might pay less for their coverage. Additionally, truckers that accumulate more mileage than others are more likely to pay more for coverage, simply because they are on the road more, and face more accident risks.
Cargo
Truckers primarily haul cargo, and each type of cargo causes the trucker to face a different level of liability. The more expensive or dangerous the cargo, the higher the potential loss might be from an accident, and the more harm people might sustain. For example, a trucker hauling gasoline faces much more of a risk of catastrophic accidents as opposed to a trucker hauling clothing. Therefore, those who need more coverage for their cargo liabilities are likely going to have to pay more for their coverage.
In the end, your trucking insurance agent is committed to helping you optimize your insurance benefits to your advantage. Don’t hesitate to come to us for help getting the most affordable coverage