How to Reduce Trucking Insurance Premiums
Trucking insurance premiums are based off of similar criteria to any type of insurance: the risk posed by the user. The most effective ways to reduce your trucking insurance premium, therefore, is to ensure that your operation poses as few risks as possible and makes as few claims as possible. To do this, it is important to consider the following:
- Your Workforce
- The Routes Driven
- The State of the Fleet
- The Culture of Safety in Your Company
The drivers in your employ are one of the most important factors that may effect your truck insurance rates. Employing drivers with relevant experience means that unforeseeable issues like inclement weather and bad road conditions will be less likely to result in a claim. At least two years of experience is preferable.
The age of the drivers is also important. Young drivers are less risk-averse and less experienced, and senior drivers can pose risks as well; drivers outside of the age range of 30-62 years of age are shown to be involved in accidents more frequently.
A clean driving record is also important for drivers, as a history of no accidents or infractions indicates a lesser likelihood of future accidents. Accidents are, of course, a huge cause of high insurance costs. Any more than two moving violations on the record of a potential new hire should be a red flag to anyone hoping to reduce their company’s insurance premiums.
Route selection is another important consideration. Areas with denser populations can be more problematic, and large metropolitan areas should be avoided. Areas that typically experience frequent inclement weather are going to have a higher risk of accident and should therefore also be avoided if possible.
Drivers with familiarity of your established or proposed new routes will likely have higher success in navigating those routes safely, so keep your routes in mind when evaluating the experience and employment history of drivers.
The greater the distance, the higher the likelihood of an accident, so while you may not be able to opt for shorter routes, know that you will need to pay more for insurance than a company with shorter local or regional routes.
Your fleet is also a critical component in the insurance premiums you will pay. The age of the fleet factors in in two ways: newer trucks have higher value and therefore require more insurance coverage, but older trucks may be more prone to mechanical problems and end up costing more in the long run. In either case, regular maintenance on the fleet is crucial to maintaining lower insurance premiums.
Ultimately, the stability of your business will also be a factor. The longer you are in business with a track record of few insurance claims, the less risky your business will seem to insurance companies. Implementing a safety course for employees and establishing a company culture that emphasizes safety can go a long way to reducing the claims you need to make and reducing insurance costs.
Unsurprisingly, the structure of your insurance policy will effect cost as well, so dealing with reliable and honest agents to get the most appropriate policy for your needs is crucial.