The top two factors affecting your commercial auto insurance premiums haven’t changed. The primary drivers of commercial auto premiums are still very basic: Your history of claims and the driving records of your individual drivers. It follows, then, that you can get a lot of value out of focusing your hiring on mature, experienced, responsible drivers. Once you have selected solid people, the next step is to enforce safety standards and provide them with adequate rest and the tools they need to drive safely. But there are a number of new tools at your disposal, too. New technologies and advances in underwriting are making it possible for employers of drivers to take a more pro-active approach to risk management and claims reduction. The ultimate effect is to lower your premiums – saving you money. Here are some things you can do to keep your premiums down:
- Consider using a monitoring service, such as SAMBA, to automate your drivers’ monitoring program. Drivers don’t always self-report their tickets, accidents and DUI issues. Services like SAMBA’s driver record monitoring function routinely check for new violations, DUI or DWI convictions, license suspensions, revocations, and approaching license renewal dates. You get a report each month, and you can take action if warranted.
- Add GPS tracking to your vehicles. Advances in GPS tracking and displays enable you not just to track your vehicles’ whereabouts and control malingering, but also monitor for speeding.
- Turn the public into your eyes and ears. You’ve seen those signs on the backs of commercial vehicles that say “How Am I Driving? Dial 555-555-5555?” They work. But if you do get complaints, it’s important to follow up on them, in writing.
- Do a pre-screen of all new hires. You can pull their abstract from the DMV. In most cases, your agent can help you run a quick check on a new hires’ driving record. You want people with 1 point or less on their licenses.
- Incidents happen. But if a driver has two or more incidents, you don’t want him on the road.
- DUI or DWIs are a deal-killer. You don’t want them on the road for you, and you don’t want to be paying their insurance premiums.
- Raise your deductible. For best results, keep your deductible above $2,500 or so. This keeps the fender-benders off the books. The deductible is usually trivial compared to the potential claim if your driver causes bodily injury to someone else, anyway. Take the savings and put them aside to pay the fender-bender issues, or buy more liability or umbrella coverage.
- Maintain an ongoing safe driver program. You can reward or bonus drivers for a certain number of miles of incident-free driving, for example, or bonus all your drivers with a share in premium savings if their safety records help you save money.
- If your state law allows, periodically pull your drivers’ DMV records and inspect their driving habits off the job.
- If your state allows, consider a safe-driving clause in the employment agreement.
- Don’t spend more on vehicles than necessary. Expensive vehicles mean higher premiums.
- Consider whether you need collision coverage. If you have an aging fleet, or you can afford to replace the occasional vehicle, consider canceling collision.
Auto insurance companies are constantly adjusting their underwriting, striving to compete with each other for their share of the market. If your drivers have a good record, or if you can point to a number of these countermeasures designed to control your claims experience with your carrier, it pays to give your agent a call periodically, and see what savings you can qualify for.
The payoff isn’t just in lower premiums. As an employer, you also win by having to pay out less in deductible charges, you have a safer workforce, and you expend fewer man-hours, both in lost productivity due to accidents and administrative time in dealing with the aftermath of accidents and the insurance claims process.
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