With auto insurance premiums, costly litigation and poor driving behavior rising at an alarming rate, companies cannot afford to delay interventions when it comes to managing high-risk drivers. We explore why immediate action is crucial and how it can protect your company from crashes, inflated premiums and other costly repercussions.
The Escalating Cost of Auto Insurance
The cost of full-coverage car insurance has soared, with a 15% increase in the first half of 2024 alone. Insurify's data science team projects a 22% total increase by the end of the year. These hikes are a continuation of the 24% rise seen in 2023, driven by factors such as inflation, increasing vehicle repair costs and unparalleled climate-related claims. Insurers, struggling with significant underwriting losses, have passed these costs onto policyholders, resulting in higher premiums across the board.
For companies managing fleets, this means that any additional risk – like a driver with a history of violations – is a big red flag. These high-risk drivers factor in the likelihood of future claims when setting premiums, pushing insurance costs even higher.
Free Guide | Knowing Isn't Fixing: Proactive Intervention Tactics for Addressing Driver Risk
The Legal Consequences of Inaction
When a company's driver is identified as risky, quick intervention is not just advisable – it's essential. Delayed or inadequate responses can lead to severe legal consequences. If a driver with known issues causes a crash, the company could be held liable for negligence, especially if there is evidence that the risk was recognized but not addressed.
This liability is further compounded by the rise in nuclear verdicts, where settlements exceeding $10 million have become increasingly common. These verdicts are often fueled by clear evidence of a company's failure to manage known risks, such as ignoring a driver's repeated speeding violations or continuing to allow a driver with a suspended license to operate a vehicle. In 2022 alone, nuclear verdicts totaled $18.3 billion, highlighting the potential financial devastation of inadequate risk management.
Predictors of Future Crashes
Ongoing driver behaviors and violations are the clearest indicators of potential crashes. When a driver commits a violation, it signals risky behavior that, if not addressed, can escalate into more serious incidents. Speeding and suspended licenses are prime examples of violations that forecast future crashes.
Speeding alone increases the probability of a claim by 20% to 80%, depending on how much the driver exceeds the speed limit. Similarly, a driver with a suspended license is four times more likely to be involved in a fatal crash. These statistics highlight the urgency of acting swiftly when a driver is flagged for such violations. The longer a risky driver remains on the road without intervention, the greater the chance of a crash.
The Importance of Proactive Intervention
To protect against these risks, companies must implement a proactive plan that works to respond swiftly to any identified issues. By addressing risky behaviors immediately, companies can prevent minor infractions from escalating into severe crashes and protect themselves from legal and financial consequences.
A well-structured intervention plan includes strong enforcement of driver safety policies, continuous monitoring of driver behavior and violations and immediate corrective actions tailored to the specific risks identified. To learn more about what makes up an effective strategy, download our guide, Knowing Isn't Fixing: Proactive Intervention Tactics for Addressing Driver Risk.
