Auto insurance rates have increased steadily over the last few years, well exceeding the rate of inflation over the same period. Why? What is driving this upward trend? There are six reasons for the increase in commercial auto insurance rates.
#1 Cost of Bodily Injury
While the frequency of auto claims involving bodily injury has fallen over the recent 9-year period, the average cost of claims that do involve bodily injury increased by 32% over the same period. The Covid pandemic reduced the number of cars on the road, but initial projections suggest the cost of each claim will be higher due to higher speeds at impact.
#2 Attorney Involvement
“Call the hammer!” …” For the people” …” we’ll get you money!”
With attorneys actively pursuing auto accident business, more claimants now have legal representation. These claims see higher rates of expenditures for medical procedures and treatment. A complete fleet management program can help reduce your exposure.
#3 Driver Distractions
Distractions behind the wheel, whether from vehicle in-car entertainment systems and mobile devices or from driving under the influence, can lead to significant risks. 77% of 1,000 drivers surveyed reported making or taking calls while driving. 31% said they have had a near-miss crash because of distracted driving.
#4 Inexperienced Drivers
A shortage of commercial operators is leading to increased rates of drivers switching companies and increases the chance for less-experienced drivers to get behind the wheel. Operators in new vehicles and covering new routes may also contribute to an increase in accident rates.
Here are ways that good drivers benefit your bottom line:
- Reduce the cost of loss. Fleet vehicle accidents are among the costliest of injury claims for business. The average cost of a loss related to vehicle accidents is approximately $70,000. Safe drivers can help lower the possibility of loss due to accidents.
- Lower liability in case of loss. Effective screening, hiring, training, and monitoring can help reduce liability.
- Boost your public image. Every driver has the potential to send a message. When your truck is headed down the highway, you want it to tell a positive story about your company.
#5 Vehicle Repair Costs
Newer vehicles are outfitted with advanced materials and technologically advanced systems designed to make driving more comfortable and safer. Cars are designed to crumple to dispel the force of an accident. That also means when vehicles are involved in an accident, the cost of repair can be much higher.
#6 Business Interruption
A claim can cause significant disruption for business taking vehicles off the road and slowing or stopping shipments or deliveries. Having an established business continuity plan can help your organization prepare for and overcome such an interruption.
Aspen Insurance Agency is in Denver, CO, and services clients nationwide. We are a family run business working with multiple insurance carriers to offer our customers the coverage they need at the lowest possible cost. We offer a wide range of personal, commercial, and professional insurance to residential and commercial customers enabling the cheapest rates available. Call to speak to one of our insurance professionals and see how painless insurance shopping can be.
