Managing expenses is crucial if you own a trucking company, especially if you want to maximize earnings, and secure long term success. The cost of commercial truck insurance is one of the major problems that every trucking company must deal with. The cost of truck insurance can rise rapidly, but you can get a better deal by being aware of how policies are determined and taking steps to prepare for it. In this blog, we will cover the fundamentals of trucking insurance, as well as expert tips on how to reduce your rates while keeping your trucking authority active and compliant.
Commercial Truck Insurance- what is it?
The aim of commercial truck insurance is to protect trucking companies. This type of insurance provides coverage against liabilities including accidents, cargo damage, and physical damage to your vehicles, no matter if you are an owner-operator or a large fleet operator. Some insurance plans also offer protection against vandalism or theft losses. Maintaining your trucking authority and complying to local, state, and federal laws require having the appropriate coverage.
Reasons For Needing Trucking Insurance:
Trucking insurance protects your business from financial ruin and is necessary for operating legally. If you don’t have enough insurance, a single incident could result in expensive repairs or lawsuits that shut down the company. Even while this insurance is required, it can be expensive, especially if you don’t know how to strategically lower prices. As an example, a pro tip you should apply is simply getting your DOT number ahead of time and letting it “age” as this will help reduce costs. Insurance companies consider an older DOT number more favorably, leading to lower premiums over time.
Factors Affecting the Cost of Your Commercial Truck Insurance
Before you begin to look at ways to lower your insurance costs, it’s essential that you understand the following factors:
- Driving Background: A significant factor in deciding rates for insurance is your driver’s safety history. Your rates will be better if they have fewer violations and accidents.
- Operational Location: The location of your company can affect insurance prices. Some states may result in higher expenses due to their stricter regulations or higher accident rates.
Cheapest Average Local Insurance Rates by State
- Mississippi
- Wyoming
- Massachusetts
Highest Average Local Insurance Rates by State
- New Jersey
- Louisiana
- Delaware
Source: Cover Wallet
- Cargo Type: The kind of cargo your trucks transport can impact insurance costs. For example, prices will increase for materials that are dangerous such as hazardous material
- Age and condition of the vehicle: Older trucks with a history of repairs tend to cost more to insure due to the increased risk of breakdowns.
- Mileage: The possibility of accidents increases with the number of miles your trucks drive, resulting in increased insurance costs.
6 Ways to Reduce the Cost of Your Commercial Truck Insurance
Now that you know what factors affect truck insurance costs, you can take the following simple steps to lower your rates:
- Improve Safety for Drivers
The most safe approach to reduce your commercial truck insurance rates is to hire experienced drivers with clean records. Defensive driving techniques and attention to safety laws are lessons that can be learned through training programs, which will eventually result in cheaper rates. Insurance companies view drivers with clear driving records and Commercial Driver’s Licenses (CDLs) as lower risk.
- Make a Safety Technology Investment
Discounts on your trucking insurance may be available if your vehicles are equipped with modern security technologies like dashboard cameras, accident avoidance systems, anti-lock brakes and electronic log books(ELD). Carriers who use technology to lower accidents and produce evidence in the event of a claim are often given incentives by insurers.
- Shop Around for the Best Rates
Trucking insurance prices vary greatly between carriers, much like they do for personal auto insurance. Never accept the first quote you receive. Spend some time comparing insurance quotes from different providers, keeping in mind that specialized trucking insurance might have the lowest costs. Make sure your trucking insurance provider is compatible with your trucking company’s operations and requirements. USA Truck Permits help you by referring you to different trucking insurance agencies.
- Choose Higher Deductibles
You might choose to increase the deductible on your insurance if you have a regular source of income and a clean record of safety. This reduces the initial rate for insurance but increases your out-of-pocket expenses in the event of an accident. Before choosing this course of action make sure you can afford the higher financial risk it represents.
- Regularly Maintain Your Vehicles
Insurance rates may be lowered by maintaining your cars. Businesses who practice routine maintenance on their trucks are considered more positively by insurers since it increases your pass rate on DOT roadside inspections and reduces the risk of accidents brought on by mechanical problems. When negotiating prices with insurance, keep complete documentation of all repairs and inspections to prove the reliability of your fleet.
- Track Your Credit Score
Your insurance prices may be affected by your business’s credit score. When setting rates, insurers often look at a company’s credit history since they consider companies with better credit scores to be more reliable and lower risk. The interest you pay on loans can be improved by making sure your creditors are paid on time and by keeping your credit balance in good shape.
Final Thoughts: Keeping the Good Image of Your Trucking Authority
Though it takes time to reduce your trucking insurance costs, maintaining the financial success of your company is well worth the effort. You can get cheaper rates without losing coverage by putting safety first, searching for the best offers, and handling your fleet efficiently. Keeping the good status of your trucking authority additionally ensures that you will continue to operate properly and in compliance with the Federal Motor Carrier Safety Administration (FMCSA).
Check out our blog post for more information on how to get your trucking authority, manage compliance for your company, or look for assistance in obtaining better insurance rates. From assisting you in getting your trucking authority to helping you in understanding the complex world of FMCSA regulations, USA Truck Permits provides an extensive variety of services to ensure the seamless operation of your business.
Optimize your operations today by taking control of your commercial truck insurance costs and ensuring your trucking authority stays active and compliant! Contact us today!
