As inflation and the number of insurance claims continue to rise in 2022, many expect commercial auto insurance rates to follow suit. If your company is on the hunt for a better rate, the grass may not be much greener on the other side. In this case, you may need to reconsider your strategy.
It can be more cost-effective in the long term for companies to take a look at their fleet internally and consider what adjustments can be made to lower driver risk, and in turn, reduce commercial auto insurance premiums.
We’ve gathered four tips for companies aiming to cut commercial auto insurance costs.
Establish an Effective Safety Policy
A driver safety policy is something we strongly recommend including in your driver safety program if you’re looking to confidently mitigate risk and lower auto insurance claims over time.
While driver safety policies aren’t necessarily a regulatory requirement, if your organization has a fleet of company vehicles or employees who drive their own vehicles during the scope of employment, then it’s crucial to consider. Driver safety policies are imperative because they set the standard for what safety looks like at your company. They help your driver population understand that careless driving habits are not tolerated. Through communicating and enforcing driver responsibilities from the get-go, you will inevitably experience a lower incidence of preventable accidents and claims. As a result, you can expect to see reductions in costs, from insurance premiums to litigation.
Better Communicate with Drivers
From new hires to well-seasoned drivers, your employees will benefit from consistent communication that stresses the importance of driver safety across the company. If employees have a clear understanding of company policies and expectations while out on the road, they’ll be more likely to make a conscious effort to prioritize them – reducing the likelihood of crashes and claims.
Companies can do this by sending out daily or weekly driver safety messages to help reiterate specific skills and company driving standards. The safety topics covered in your messaging can range from basic reminders to more specific defensive driving skills. You can also take this a step further and establish a frequent driver training program. Companies that assign monthly training courses have far fewer violations – 25% less than the industry average and 50% less than fleets that train twice a year.
Send out These 7 Safety Messages for Fleets
Continuously Monitor MVRs
While at-hire and annual MVR pulls are important, this infrequent practice can greatly affect your visibility and understanding of your driver risk the other 364 days out of the year. This is what we refer to as the “visibility gap.” In order to close this gap and reduce crashes and claims, safety professionals need a way to continuously be alerted of driver violations, so they can take action as soon as they occur.
MVR monitoring eliminates the dangerous waiting game that results from annual MVR pulls. It continuously sends out automated updates to safety professionals to alert them when their drivers receive violations, suspensions and other activity on or off the clock. From there, if the violation requires remediation, they can assign relevant driver training to get the driver safely back on the road, before a future claim occurs.
Implement Technology Solutions
From telematics to continuous driver monitoring and online driver training, there are technology solutions companies can leverage to reduce commercial auto insurance premiums.
These driver risk mitigation solutions are huge disruptors – especially for an industry that has seen a rise in fatal crashes year after year. The growing number of crashes has brought with it an increase in lawsuits and nuclear verdicts. It’s been estimated that one in two personal injury lawsuits involve an auto crash, and three in five of these lawsuits are won by the plaintiff. From 2010 to 2018, the average verdict size for trucking lawsuits above $1 million increased by nearly 1,000%, rising from $2.3 million to $22.3 million.
Beyond decreasing your driver risk, insurance carriers can also leverage your tracked driver data to more accurately price your policy come renewal time. If carriers have access to this data, it takes the guessing game out of pricing policies. With more accurate data, carriers can better assess risk of entire fleets, and thus, price policies more accurately and competitively than ever before.
We’ve found that companies see a decrease of 16% in insurance premiums when using a technology solution such as driver monitoring.
While there’s no discount code that can magically decrease insurance premiums come renewal time, there are strategies that companies can implement to decrease violations, crashes and expensive claims. If you want to learn more about how you can mitigate your driver risk, we recommend reading How to Implement a Comprehensive Driver Safety Program.