Running a business comes with costs, which can affect your overall profit. Cutting some of these costs is essential to becoming a more successful business.
Commercial auto insurance is a cost that can be very expensive for business owners. Unlike some other business insurance policies, commercial auto insurance is compulsory if you use vehicles for business. It costs a lot more than regular car insurance, especially if you have more than one driver to cover.
Fortunately, there are many ways to reduce this cost. You can lower your commercial auto insurance rates in a number of ways. This could help you stay covered without spending a lot of money.
Commercial auto insurance rates keep climbing as risks increase for insurers and policyholders. Reckless driving, rising gas prices, supply chain issues, nuclear verdicts – the list goes on.
While it’s tempting to just shop around for a better deal, that’s not a reliable long-term solution. The real answer lies in controlling your fleet’s risk.
In this article, I’ll explore 17 steps you can take to reduce your current commercial auto premiums They fall into five key areas
- Drivers
- Technology
- Vehicles
- Insurers
- Fleet Safety Management
Some tips are practical and straightforward But most involve gathering data for insights to make smart choices that boost safety and minimize risk Doing so will better control insurance costs,
Work With Your Drivers to Reduce Risk
Good drivers have fewer crashes and claims. And fewer claims mean better premiums. Having effective hiring, training and support programs for drivers is crucial to lowering rates.
Only Hire Drivers With Clean Records
It’s ideal to only take on drivers with clean licenses. Those with points or convictions will negatively impact premiums. To start, only hire applicants with clean slates. And if any current driver gets penalties, update your insurer so they can reassess and discuss changes.
Since that’s not always possible amidst shortages, also look into expanding your hiring pool.
Establish Strong Driver Training Programs
Valid training programs reduce risk by improving skills. And ongoing education helps prevent crashes. Your insurer may even offer discounts for proactive training. Just be sure they approve of the provider before committing.
Monitor Driver Trends
Check for trends in violations, crashes on certain routes, driving during bad weather, busy times, etc. Identify higher-risk drivers versus fleet and industry averages.
Then target retraining and other escalating interventions to high-risk drivers falling below standards. This focused effort cuts risk and provides proof to insurers of safety management.
Pay Special Attention to Younger Drivers
Younger drivers have more crashes, so insurers charge them higher rates. Monitor them closely and train them to make sound decisions on the road.
Use Technology to Prevent Losses
Technology offers many ways to help control premiums. Telematics provides insights on drivers and vehicles. Security devices help prevent theft and aid recovery.
Implement Telematics
Robust telematics insights optimize safety programs to reduce risk and costs. The more data captured, the more potential benefits.
Install Tracking, Alarms and Immobilizers
GPS tracking locates stolen vehicles for improved recovery. Alarms and immobilizers deter theft altogether. This anti-theft tech helps lower premiums.
Equip Vehicles With Cameras
Videos clearly establish fault after crashes, smoothing claims and defending against fraud. Footage also identifies distracted driving for training.
Optimize Your Fleet’s Vehicles
Your vehicle selection, age and condition influence insurance rates too. Take these steps to control premiums:
Keep Your Fleet Modern
Newer vehicles have better safety features and tech, plus lower emissions and better MPGs. While you need vehicles suited for the job, insurance costs may help tip choices if options exist.
Secure Vehicles When Not in Use
Prove to insurers your off-duty fleet is protected with patrols, benchmark locking systems, etc. This demonstrates responsibility.
Maintain Vehicles Diligently
Breakdowns, crashes and incidents increase if maintenance lapses. Empower drivers to report concerns promptly between scheduled service.
Work Closely With Your Insurer
Your partnership with insurers and sharing data helps secure the best premiums through informed negotiations.
Ask How You Can Reduce Costs
Insurers may have ideas and reward your safety improvements with lower rates. Provide stats showing reductions in incidents.
Combine Policies
Bundling policies can lead to overall premium discounts. Insurers want to retain business, so float these ideas.
Only Buy Necessary Coverage
Let hard data guide appropriate coverage levels, not an insurer’s recommendations. Don’t overpay for unneeded policies.
Consider Raising Deductibles
If claims drop, increasing your deductible may lower premiums. But use fleet data to determine if that’s a smart gamble first.
Isolate the Worst Drivers
Your worst 10-15% of drivers disproportionately impact premiums. Support their improvement, and explore moving them into separate policies if recommended.
Lean on Fleet Safety Systems
Quick response to incidents and leveraging risk insights are vital for premium reductions too.
Know Your Situational Risk
Analyze driver, crash and other data to spot trends. Establish current risk levels and projected movement. Verify with insurers to get aligned.
Accelerate FNOL
The faster you respond to crashes, the lower the costs. Technology like continuous license monitoring facilitates rapid response.
The Bottom Line
Following these 17 steps tailored to your fleet’s needs will help secure lower commercial auto insurance premiums.
The most impactful strategies involve gathering and applying data insights across drivers, vehicles and operations. When you demonstrate a risk management mindset to your insurer, they’ll be more inclined to offer competitive rates.
Keep Your Vehicle(s) Secure
The level of security on your car can affect how much you pay for commercial auto insurance, especially if you want to protect yourself against theft and vandalism. For instance, if you park off-street in a garage or private lot instead of on the curb, your rates may go down. You might also be able to lower your rates and keep your car safer by adding extra security features.
Some cars may be safer than others, and this is something that you might want to think about when you first buy or lease a car for business use. Today, most cars come with security features like engine immobilizers. Older cars might not have these features, though. Having this feature in your vehicle can help to lower your insurance rates in most cases.
The deductible is the amount of money you’re willing to pay for repairs before your insurance company pays. If you choose a higher deductible, your insurance rates will likely be lower. If you choose a low deductible, your rates may be higher.
Raise your deductible, but be careful—you need to be sure you have the money to pay this amount before you can file a claim. If you don’t have these savings on hand, it might be best to stick with the deductible that the insurance company suggests.
Can installing telematics or GPS devices help reduce my insurance costs?
Yes, many insurance companies offer discounts for installing telematics or GPS devices. These gadgets watch how people drive and can encourage safer driving, which can lower the risk of accidents and maybe even lower insurance rates.
How to Reduce Commercial Auto Insurance Premiums
FAQ
Why is my commercial insurance so high?
Do you offer discounts for commercial auto insurance?
We offer discounts designed exclusively for our commercial auto customers. Depending on your business type, you may be eligible for multiple discounts for your business auto insurance, tow truck insurance or commercial truck insurance policy. by paying your entire commercial auto insurance premium up front.
Can reducing commercial vehicle insurance save you money during off-season?
Reducing coverage while maintaining insurance through your off-season could reduce your exposure to risk and lower your out-of-pocket expenses. To learn more about how reducing and maintaining your commercial vehicle coverage can save you money during your slow season, call 1-888-806-9598.
How do I keep my commercial auto insurance down?
There are other ways to keep your commercial auto insurance down besides qualifying for discounts. Choose the options that fit your business’s needs and your commercial auto insurance budget.
How do I choose a commercial auto insurance company?
Do research on the insurance company. Take time to vet the insurance company you have in mind for your commercial auto insurance. Don’t rely solely on price. You want to compare the coverages offered and check reviews for multiple companies. What Is Commercial Auto Insurance and How Does it Work?