All truck companies have to review their insurance policies annually to ensure that their coverage meets their needs. When they don’t experience accidents, they don’t usually hear from their broker for a whole year, who would call them only before the renewal date to ask them if anything has changed so they can make an offer for the new policy. Most truck company owners would be tempted to give the short answer NO because they cannot think of anything that would influence their premium’s price. But the fact is that most insurance buyers don’t know what factors influence their coverage’s price, and therefore they don’t know when to update or upgrade their policies.
If you’re one of the insurance purchasers who doesn’t know what factors influence your insurance, reading this article may help you. Here are the factors that contribute to the truck insurance costs.
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- The type of trucks you have in your fleet
If your fleet includes only new trucks as opposed to used ones, the premium is higher because they’re more expensive to repair or replaced if damaged. And because the replacement cost is higher, the insurance company charges you more to protect your vehicles.
When you get truck insurance for your vehicles, ask the insurer if they also provide bobtail insurance that covers the costs of repairing or replacing a truck in case it experiences an accident when it doesn’t carry cargo.
- The drivers’ driving records
Hiring drivers with clean driving records can save your business plenty of money on insurance. Insurance providers consider red flags all excessive speeding, DUIs, and running stop signs because they boost the chances of your vehicles getting involved in an accident. Therefore, it’s recommended not to hire drivers who have these driving issues.
- Type of cargo you transport
This plays an essential role in the amount you pay for insurance. The more expensive the goods you transport, the pricier the insurance premium is. Also, if what you’re shipping is fragile or deteriorates quickly when the drivers don’t properly care for it, the insurance company can charge you more. If anything happens to the cargo you transport, you must pay for it, and if you have insurance, the provider can pay the cost. Finally, in the event of an accident, you can be liable for property or environmental damage.
- Claims history
The insurer is always there to help you deal with claims, but they also keep a record of the claims you make and the ones they pay. This means that after a new claim, the premium provider increases the cost of the policy. That’s the system worldwide, and you cannot do anything to avoid it. But you can train your drivers to drive proactively and prevent accidents. Also, it would help if you researched what cost containment options are available for your business.
- The routes you drive
Where your trucks are driven can affect how much you pay for insurance. Usually, the prices are more favorable when you haul over long distances on the interstate than when using the vehicles in the metro area. Why? There’s more traffic in the city and more likely a big vehicle like a truck to get into an accident.