5 Steps to Manage Commercial Auto Insurance Rates and Claims

5 Steps to Manage Commercial Auto Insurance Rates and Claims

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There’s no way around it: commercial auto insurance rates and claims continue to rise. Let’s talk about steps you can take to manage insurance on your delivery drivers, trucks and general fleet.

On average, auto rates are up 15% to 20% across the country. For commercial auto insurance, especially, the driving force is the number and size of lawsuits. Consider a recent $1 billion-dollar verdict in Florida, where two trucking companies were found liable for the wrongful death of a teenager. Not incidentally, the companies both appeared to have gaps in their driver-vetting process.

Motor vehicle deaths are up too, according to the National Safety Council. Preliminary estimates show a 16% increase from the first six months of 2021. “This increase is a deadly trend that started last year during the onset of the COVID-19 pandemic and negates more than 15 years of progress in preventing death on U.S. roads.”

Shortages of critical auto parts also mean the costs to repair and replace vehicles are increasing.

But you aren’t powerless. There’s a lot you can do to proactively manage your drivers and control claims to affect your ongoing commercial auto rates.

#1: Set expectations about distracted driving

Anyone who drives for your organization should have a clear understanding of your expectations about using cell phones and engaging in other driving distractions, such as eating.

  • Establish a policy that covers when, where and how drivers may use their cell phones while working on behalf of the organization. Consider requiring them to put their phones on Do Not Disturb while they’re driving.
  • Include a plan for informing and educating drivers – both existing employees and new hires.
  • Address how you will enforce the policy.
  • Follow through on enforcement.

If you allow drivers to use cell phones at all while working, be sure to describe the circumstances that are acceptable – in an emergency, for example, or only when pulled off the road. You might consider extending the policy to anyone who is operating heavy equipment.

In the $1 billion Florida case, one of the drivers admitted he was looking at his phone at the time of the crash.

#2: Consider accountability measures

You might think about adding both internal- and external-facing cameras to your vehicles. They can help clarify the situation when it comes to defending claims, plus some carriers will give discounts or credits for having them.

Telematics apps also can earn you credits and boost compliance with your policies and safety culture. These apps capture location, speed, idling time, harsh acceleration or braking, fuel consumption, vehicle faults and more. When analyzed for particular events and patterns, this information can provide in-depth insights across an entire fleet.

Random drug tests are also an option. They’re required for CDL drivers.

#3: Select drivers carefully

A solid strategy for driver selection can affect your accident rate. Start with strong job descriptions for drivers and keep them updated. They should include qualifications, skills and standards for evaluation.

The driver selection process can include:

  • Driver’s application form
  • Interview
  • Driver’s license verification
  • Reference check
  • Motor vehicle record (MVR) review
  • Physical examination
  • Road test
  • Written test

That motor vehicle record or MVR review is critical. It’s wise to check it once a year for each driver. In the Florida case, one of the drivers had several prior crashes as recently as six months before the accident. And he wasn’t properly licensed for the type of driving he was doing.

#4: Establish a driver-training program

To ensure your new and tenured drivers understand your policies, government regulations and organizational-specific driving needs, consider establishing a driver-training program. And make sure you cover drives at all stages, including orientation for new drivers, refresher training for existing drivers and remedial training to address any performance issues that arise.

Among potential training topics:

  • Organizational policies and procedures
  • Government regulations
  • Company vehicle specs
  • Driving routes and schedules
  • Client handling procedures
  • Emergency procedures
  • Accident reporting procedures
  • Conducting proper vehicle checks before driving

You can also offer defensive driver training – a skill that’s becoming even more important given the number of distracted drivers on the road. Ask your Miller Group contact for information about the course we offer.

#5: Recognize positive driving behavior

In addition to managing your risk factors on the front side, you can reinforce compliance and risk reduction. Job performance feedback is important and can motivate drivers to comply with your policies. You also might want to establish a recognition program that calls out and rewards drivers for accident-free records, fuel efficiency, client satisfaction or other factors important to your organization.

You may not have any control over the external factors driving commercial auto insurance rates upward. But you have many tools in your toolbox that can influence your company’s experience and help you keep a handle on both claims and rates.

 

By Chris Miller, Vice President, Commercial, The Miller Group

See also:
Top 5 Auto and Equipment Coverage Mistakes
Safety And The Cost Of Doing Nothing
Property And Casualty Rates Rise Dramatically

 

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