While the economy chugs along at a brisk pace, the trucking industry continues to face substantial headwinds. A volatile freight rate environment led to a 300% increase in trucking company bankruptcies in 2019, including the sudden closure of Celadon, which made national headlines. Rising costs are a contributing factor, with insurance premiums now being cited in multiple industry journals as a major challenge in 2020 and beyond. Some companies are going out of business due to higher-than-expected insurance increases.
Forbes Magazine recently published an article, “Surging Truck Insurance Rates Hit Freight Operators”, that highlights the effects of nuclear verdicts on the insurance marketplace and how the industry is coping with cost pressures. Freightwaves advocates for the trucking industry to take control of insurance costs by focusing on what you can control – people, process, and behavior. Some of their recommendations—as well as our own—are listed below.
Key Points to Reducing Insurance Costs
• Safety, safety, safety – Controlling claims is the only way to reduce insurance expenses, and this can only be accomplished by making safety the cornerstone of your operations. We’re past the days of pencil-whipping quizzes and pre-trip inspections; safety has to be a core value. Savvy, safety-focused fleet owners are becoming an “insured of choice” and leveraging lower-than-average premium per mile to gain an advantage.
• Retention Programs and Captives – Increasingly, fleet owners with good claims track records are turning to self-insurance options to mitigate costs. Our agency is a strong advocate of self-insurance, but it’s absolutely critical to understand the risks and have your safety programs in place before making the jump. Captive insurance programs require additional scrutiny due to possible long-term collateral requirements.
• Driver Selection – An idle truck costs you less than a bad driver operating that truck. Don’t let bad drivers destroy your company.
• CSA Scores – You cannot afford OOS inspections because they directly affect your insurance prices. Review our “No Violations” action plan and start on the road to reducing your CSA scores.
With a volatile trucking insurance market and increased costs pressures, it’s important to use all tools at your disposal to keep claims and insurance costs in check. As always, the trucking insurance professionals at The Daniel & Henry Company are here to help you understand what measures you can take to reduce risk and insurance costs. Please call us today at 1-877-406-5915 or email us at RuebsamJ@danielandhenry.com