One of the unique things about auto insurance policies is that multiple variables impact rates. This is something that business owners constantly keep an eye on. Fluctuating commercial auto insurance costs may harm your budget and reduce your ability to maximize profits. To help you stay ahead of potential premiums hikes, here’s a look at some unique variables that impact commercial auto insurance costs.
During the last economic downturn, companies sought ways to reduce their expenses. Product manufacturing slowed down, and there were also fewer deliveries. However, product rates will start climbing again due to the economic upswing. There is increased demand for parts and delivery services. Companies are still looking for ways to offset costs. They are asking trusted employees to handle more workload instead of hiring more drivers and adding more vehicles to their fleet. Company owners are seeking to maximize the value of their current fleet, which may cause their commercial auto insurance premiums to rise. Increased mileage on commercial vehicles may prove costly as some companies are forced to increase their fleet to meet consumer demand.
Distracted driving has become an issue. Drivers quickly lose focus on the road between texting, Bluetooth, and checking the radio or GPS. However, distracted driving is leading to fatal consequences. Research shows that pedestrian collisions are occurring at a higher rate, which raises commercial auto insurance costs. Analysts also have concerns about autonomous driving. While some analysts promote the benefits of autonomous driving, it also increases drivers’ likelihood of losing focus. While these vehicles are equipped with enhanced safety features, many drivers wrongly assume that the system will automatically guide the vehicle during high-pressure situations. This is a dangerous mistake that could raise commercial auto insurance premiums.
Rising Medical Costs
Many companies are also paying higher commercial auto insurance premiums due to increased expensive surgeries being performed. Companies are obligated to take care of their employees, and the increased cost of delivering care is taking a toll. Analysts point out that injuries sustained in auto accidents are generally unpredictable. Severe injuries may have a straightforward treatment and recovery time, while nagging muscle strains may take longer to heal than expected. Companies are also responsible for covering any follow-up treatments. Many companies are overhauling their training programs to help employees stay safe on the road.
Rise in Expensive Lawsuits
Another factor in the rise of commercial auto insurance costs is more expensive lawsuits. In addition to costly lawsuits, analysts also point out the increase in small claims litigation. Some legal analysts note that aggressive young attorneys seek to establish themselves in the industry by pursuing smaller driver negligence injury claims against companies. Many of these cases end up being settled out of court for thousands of dollars. Commercial vehicles are encouraged to research The Federal Motor Carrier Safety Administration System to learn more information about potential violations. Attorneys also use the data to highlight companies with an established history of poor driving.
Hiring Bad Drivers
The biggest issue influencing higher commercial auto insurance costs is the arrival of poor drivers into the industry. Spending long hours on the road has always been considered an unappealing job to many people. The commercial driver shortage has caused some companies to make desperate hires. Hiring inexperienced and less talented drivers increases the likelihood of an accident occurring. While the companies may seek to improve their training programs, the risk remains.
Consult with 01 Insurance!
These variables are the primary reasons behind rising commercial auto insurance premiums. It’s recommended that you continue to look at different economic trends to help plan for the future. If you are searching for commercial auto insurance, contact the team here at 01 Insurance, and we will assist you.