Commercial Auto Insurance: It’s Hard To Find Coverage

White Pickup Truck with Construction HatCommercial auto is widely regarded as one of the most challenging insurance markets in the United States. Many years of sustained losses, inadequate rates and unhealthy combined ratios (in the region of 105% and over) have taken their toll on the market – but the winds of profitability are slowly changing.

Loss ratios in the commercial auto market have crept up steadily for a number of reasons. The cost of auto claims has increased as more vehicles are kitted out with modern technology like sensors and autonomous features – all of which are expensive to repair and replace. Likewise, the rate of collisions on the roads has gone up due to issues like distracted driving. Together, more collisions at higher costs of repair have forced the auto insurance industry into a tight spot.

As carriers “tighten their belts” in the auto insurance markets, they’re looking for risks that have invested within themselves. to adopt effective risk management practices and invest in accident avoidance to the greatest extent possible. They want accounts that have installed GPS and speed monitoring, in-cab cameras, telematics, and other technological loss prevention tools.

Some carriers will even offer policy discounts based around the risk mitigation investments that accounts have made. It’s the responsibility of the insured to do all they can to avoid and/or mitigate claims. If commercial transportation companies implement effective technology solutions, and therefore experience better loss ratios and reduced loss costs, they will enjoy lower rates over time.

What are the improvements you can make prior to getting a quote for your account? Tightening up safety procedures, carrying out driver employment checks, making sure they have an appropriate fleet maintenance program in place. Ensuring you can provide documentation that supports your improvements is also vital in getting the best terms possible.

In addition, insurance professionals pinpoint telematics as a foregone conclusion in the commercial transportation industry, believing that over time, every commercial vehicle piloted by a human being is going to have telematics technology monitoring what’s going on inside and outside of the vehicle. It’s particularly relevant in the claims space. These devices give claims adjusters the ability to settle a claim quickly when liability is clear or to make unsubstantiated claims go away.

Talk to your broker. Much like other lines of Insurance, best practices need to be implemented in order to receive the best pricing from carriers. Risk prevention, safety procedures, and fleet management protocols are just a few of the areas they will review with you to ensure you get aggressive pricing from carriers.

© Copyright 2021. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.