Year after year, auto insurance premiums are climbing as insurers and their policyholders face increased risks: reckless driving, rising gas prices, supply shortages, social inflation, nuclear verdicts and more.
While many policyholders shop around with the hope of landing a better rate, this solution may not be beneficial in the long term. The answer instead lies in a company’s ability to gain control of its risk.
Below, we explore 17 steps that companies can take to reduce their current insurance premiums, grouped into five areas:
While some are simple practical steps, the majority involves gathering, analyzing and using data to make informed decisions that reduce risk and improve safety. The result will better control your commercial fleet insurance costs.
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Good drivers have fewer crashes and claims. Fewer claims mean better premiums. So, having programs and processes to hire, train and support good drivers is a big step toward getting lower commercial fleet insurance rates.
It’s best to have drivers with clean licenses, as drivers who have points or convictions will affect your premiums. To achieve this, start by only hiring new drivers who have clean licenses. Then if a driver gets penalty points or convictions, be sure to update your insurer. They can reassess and discuss the situation so that you are not surprised by any resulting changes.
As hiring clean drivers is not always feasible in a driver shortage, discover these tips for expanding your hiring pool.
Having valid driver training programs will lead to cheaper premiums. Additionally, ongoing training works to reduce driver risk, as drivers will ultimately be in fewer crashes. Fewer crashes mean fewer claims, which means less impact on your premiums. Be sure your insurer recognizes the training company before committing to using them. Some insurers may even offer you a discounted rate for proactively addressing your fleet’s potential risk.
Duty of care means you already have driver risk programs and regular license checks. After this, it’s a good policy to monitor your drivers and look for trends in fleet risk. This includes driver violations, as well as tracking driving behavior along certain routes, during bad weather, at specific times of the day or during certain seasons. Through this, you can identify the drivers with higher incident and violation trends versus the average for your fleet or against industry benchmarks.
Once identified, you can target your remediation efforts at drivers who pose a higher risk, or those falling below the fleet’s driving standards. This support can move in an escalating format – From management interventions to training courses and disciplinaries.
While this approach helps fleet managers address risk issues, the insight and supporting information can also prove your fleet risk management and improvements in fleet safety when discussing premiums and rates with your insurer. That is, monitoring your drivers and acting both reduces risk and can help secure lower insurance premiums.
As part of the above, give particular focus to monitoring and training your younger drivers. Younger drivers are more prone to dangerous driving, with crashes peaking in drivers ages 18-25. Because of this, many insurers increase rates for younger drivers. Ensure you are instilling the confidence they need to make the right decisions behind the wheel.
Technology can offer a range of ways to help reduce commercial fleet insurance premiums. Telematics provides valuable insight into driver behavior and vehicle use, while trackers, alarms and immobilizers help prevent stolen vehicles or aid in their recovery.
Telematics is an important part of any driver monitoring system. It provides valuable insight into driver behavior and vehicle use. The data that can be aggregated from telematics systems has increased in the last decade, and can now be optimized to reduce risk and decrease premium costs.
Running in parallel with telematics is the installation of trackers, alarms and immobilizers. Trackers pinpoint the location of a vehicle, increasing the chances of recovery if it’s stolen. Alarms and immobilizers help prevent stolen vehicles in the first place. Combined, the anti-theft impact of these technologies helps reduce insurance premiums.
The most important role of dash cams or in-cab cameras is to show who’s at fault in the event of a crash. Videos provide strong evidence when proving blame and defending against fraudulent claims. Basically, footage of someone crashing into you makes the insurance process smoother. Plus, proving you are not at blame should not affect your insurance.
Dashcams looking into the cab also show what the driver was doing – helping identify distracted and dangerous behavior, providing evidence for claims or helping in driver reviews by fleet and transport managers.
Having a fleet of younger vehicles can help you save on your insurance premiums. Newer vehicles have up-to-date security, making them harder to steal while also having better safety features. They will also have lower emissions and better fuel efficiency. While you’ll need to choose the vehicles that get the job done, a consideration of the insurance costs, if there are options, could save you money.
Proving to your insurer that your fleet is secure when not in use can also deliver cost savings. Secure, patrolled depots work best, but even using benchmark locking systems helps.
Vehicle maintenance is a key part of fleet operations and management. If your vehicles are not well maintained, your risks will only go up. The potential for breakdowns, incidents and crashes will increase, which will further impact your fleet insurance rate. It’s also critical to encourage and empower your drivers to highlight vehicle-related issues, however small. This ensures items falling outside of the maintenance schedule are dealt with as soon as possible.
Working with your commercial fleet insurer and sharing your fleet data and its trends will help get you into a great position for negotiating the best premiums.
Your insurer may have suggestions on what you can do to lower your premium costs. You can support your case with your driver monitoring and training data, showing how you’ve improved in these areas and are driving down your incident rate.
Investigate the options of combining policies. This could lead to reduced overall premiums. If the insurer wants to keep your business, they should at least be open to these sorts of discussions.
Using your safety data and insight, check that the insurance you have is what you need. If you don’t need the maximum coverage, don’t get it. These insights should inform your buy, rather than what the insurer recommends.
If your number of claims is coming down, an option may be to increase your excess to get lower premiums. Again, analysis of the data you have on your fleet will help inform if this is a valid option or not.
Your worst drivers only make up 10-15% of your fleet. But, they will make the greatest impact on your premiums. Training, management intervention and other support will help them improve. But to help reduce insurance costs, you may be able to move them to a separate policy if that’s something your insurer recommends.
Rapid FNOL and risk insights are key to helping you get better insurance premiums.
Combine your driver, claims and other relevant data to assess your risk. Know where you are now, how the trend has moved in the past and what it’s likely to do in the future. Share and confirm this data with your insurers so that you agree on the situation. Then work together on a fleet safety and risk management plan to make your fleet a better risk. This level of management insight and control coupled with the engagement with your insurer will put you in the best place for discussing insurance premiums or getting new quotes.
The faster you take control of an incident, the more you can control the costs involved. Technology such as continuous MVR monitoring and constant communication with your drivers can help with this. By controlling costs through rapid FNOL, claims will be lower and the impact on your insurance premiums minimized.
To learn more about how companies can mitigate driver risk to effectively decrease their commercial auto premiums, download our guide below.