What Are the Factors That Affect the Cost of Commercial Auto Insurance?

What Are the Factors That Affect the Cost of Commercial Auto Insurance?

Commercial auto insurance is necessary if your company owns vehicles. However, several factors, from frequent driving to lack of driving experience, increase the cost of this coverage. Therefore, it is essential to understand the various factors impacting the cost of commercial auto insurance in Astoria.

  • Driving Frequently

    During a recession, companies typically drove fewer miles due to lower sales and deliveries. Now, the economy has been improving, and companies are resuming their operations to the full extent, increasing the need for frequent driving. The more you drive, the higher your auto insurance rates will be. Outsourcing deliveries to a third-party logistics firm is one way to cut transportation risks and auto insurance costs.

  • Inexperienced Drivers

    If you hire inexperienced drivers, the risk of accidents increases, causing higher insurance premiums. Experienced drivers know how to respond to slippery road conditions, whereas inexperienced drivers might crash. Many experienced truckers who were annoyed by increased electronic monitoring have moved on to other jobs, causing labor shortages and transportation companies to rely on less experienced drivers. Nevertheless, strict standards are necessary to reduce the chances of accidents.

  • Reduced Fuel Prices

    The number of auto accidents per year has declined since the early 2000s due to higher gas prices, which cause people to drive less. Accidents have picked up when gas prices have fallen below $2 per gallon.

  • Careless Driving

    Drivers must tune out various distractions to avoid an accident since distractions are a top cause of collisions. It’s important to avoid talking on a smartphone or staring at a portable screen while driving. Losing track of what’s up ahead on the road is dangerous, especially at high speed.

    The introduction of semi-autonomous driving features poses dangers for drivers who may assume the technology will prevent an accident, but they should still pay attention to the road. Drivers of all types of vehicles should be trained to take responsibility at all times.
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  • Frequent Involvement of Attorneys

    Insurance companies have steadily raised auto coverage rates over the years to offset the losses to attorneys who have run up auto collision settlements to six-figure digits. At one time, it was rare for attorneys to get involved with smaller claims around $25,000, but now it’s more common. The more attorneys run up settlements, the more likely all drivers will have to pay higher auto insurance premiums.

    A transportation company will pay higher insurance costs if they are caught having too many accidents. The Federal Motor Carrier Safety Administration tracks accident data with its Safety and Fitness Electronic Records System (SAFER). This system allows attorneys to research the number of accidents experienced by a transportation company as evidence to indicate the company doesn’t take enough steps to ensure driver safety.

  • Expensive Medical Bills

    Medical costs are also constantly on the rise, increasing insurance costs. Surgery, medication, and rehabilitation therapy are all becoming more expensive, which means larger payouts for insurance companies. Companies with large fleets run the most risk of filing accident claims, which is why they need to hire drivers carefully. Based on the pattern of rising medical costs this century, it’s unlikely that medical costs will be coming down anytime soon.

Consult with 01 Insurance

Businesses need commercial auto insurance to meet state requirements. It’s also important for businesses with drivers to be strict about the hiring process. The best way to lower insurance rates is to show your insurer you have taken steps to lower risks. Contact our team at 01 Insurance to get affordable commercial auto insurance in Astoria.