6 Factors That Affect Your Trucking Insurance Rates
When it comes to your trucking business, one of the most important things to have in place is your company’s insurance. Trucking insurance rates can be affected by a variety of different factors, some within your control, and others that are out of your hands. In this blog, we’ll take a look at the 6 common factors that affect your trucking insurance rates. Read on to learn more!
The Type and Value of The Cargo You’re Hauling
When applying for a commercial transportation insurance policy, one of the first questions an insurer may ask is what type of cargo you’ll be hauling. This might seem like a strange inquiry at first, but the answer you provide can actually have a major impact on your rates. Certain types of cargo are more prone to theft or damage than others making them a higher cost to cover for insurance companies. For example, hauling food items is generally less risky than hauling something like electronics or jewelry or even more risky, flammables.
In addition to the type of cargo you’re hauling, insurers will also want to know about the value of your cargo. Obviously, the higher the value of your cargo, the higher your insurance rates will be. This is because there’s more at stake in the event that something happens to your load. So, if you’re hauling high-value cargo, make sure to factor that into your budget when shopping for insurance.
After all, it’s better to be safe than sorry when it comes to protecting your valuable load. And while it may impact your bottom line in the short term, investing in proper coverage can save you from financial disaster in the long run. Don’t let the cost of valuable cargo catch you off guard – plan ahead and secure proper insurance coverage.
Age and Experience of Truck Drivers
Another factor to keep in mind when applying for coverage is the age of your drivers. There is one fact that is not specific to just trucking. Younger drivers, usually 25 years old or below, cost more to insure. This is because they can pose a higher risk compared to older veteran drivers with more driving experience. Due to the experience of more veteran drivers they typically know how to avoid accidents, handle all kinds of weather conditions and adjust to different scenarios.
On the opposite end, having drivers who are substantially older are also considered a high risk. Employing drivers over 60 years old can lead to higher premiums just like having younger drivers (25 and below). However there are some insurance companies that are more flexible with older drivers as long as they retain good medical and driving records.
Your Driving Record
When it comes to trucking insurance, a clean driving record is kind of like a golden ticket. Not only does it qualify you for lower rates, but it’s also a reflection of a driver’s responsible behavior on the road. However, if you or your drivers do have accidents or violations, all hope is not lost. It might just take a little bit more legwork to find the right provider who can offer competitive rates. And remember: even one fender-bender can significantly raise your premium, so make sure your drivers always practice safe driving. Keeping those blemishes off your or your drivers record should be top priority. So make sure each driver is getting the proper training and conducting all necessary pre-driving inspections before hitting the road.
The Age and Condition of Your Truck
The age and condition of your truck can also determine your insurance rates. If you have older trucks/equipment that aren’t in the best condition insurers may view it as a bigger risk to cover. Older trucks, specifically poorly maintained older trucks, are more likely to be involved in accidents or breakdowns which ends up costing insurance companies when claims are filed. On the other hand, if you have a newer truck that’s well-maintained, insurers will see it as being less of a risk and offer lower rates accordingly, similar to regular automobile insurance.
Your truck may be your pride and joy, but to insurance companies, it’s another factor in determining your rates. So make sure you’re giving your vehicle the TLC it deserves – not only will it keep you safer on the road, but it could also save you some serious money when it comes time to renew your policy. Keep up with regular maintenance and repairs and upgrade old or faulty equipment/trucks when possible. These small investments in your truck(s) will pay off big time in the long run. Why risk higher rates with a poorly maintained ride when you can showcase a gleaming beauty on wheels? Keep those wheels turning and that truck shining, and you’ll reap the benefits in more ways than one.
Your Trucking Company’s Safety Rating
The safety rating or CSA score of your trucking company is another factor that can affect your insurance rates. Insurance companies want to insure safe companies, so they will often offer lower rates to companies with good safety ratings. If you’re not sure what your company’s CSA score is, you can check with the Federal Motor Carrier Safety Administration (FMCSA). If you are unfamiliar with what a CSA score is exactly check out our other blog A Guide to Understanding and Improving Your CSA Score to learn more!
Investing in improved safety measures may seem like an expense at first, but in the long run, it can pay off with lower insurance costs amongst other savings. So don’t wait until your premiums skyrocket – take a proactive approach and aim for a top-notch safety rating today.
Location of Operation
The state you operate out of can influence the amount of insurance you have on your truck(s). Certain states require more insurance coverage compared to others. Also the amount of mileage your truck(s) travel can also influence your rates. The more miles traveled in the day to day, the higher the premiums can be.
On top of the state you operate out of and a truck’s average daily mileage, the routes trucks take can also determine insurance premiums. You may be charged higher premiums if your trucks travel on routes known to be risky or dangerous. They can be deemed risky/dangerous due to factors like weather conditions, population density, road conditions and type of land you navigate through (ie. mountainous regions vs plains).
Find The Policy That Serves You Best
As you can see, there are a number of different factors that can affect your trucking insurance rates. Some of these factors, like your company’s driving record and CSA score, are within your control while others, like the Location of your Operation, are not. However, by keeping all of these factors in mind when shopping for insurance, you’ll be sure to find the best possible policy for your needs at the best possible price!
Thoughts? Share them below!
Ready to find a reliable factoring partner? Learn more about factoring with us:
