Commercial Auto: The Importance of a Fleet Safety Program
March 19, 2019
If you are a business owner with a fleet of vehicles, then you likely have been impacted by the rise in commercial auto insurance rates in recent years. Despite rate increases in 23 of the last 25 quarters, insurance carriers still paid out far more in claims in 2017 than they received in premiums. This means that commercial auto rates will continue to increase moving forward. The reason for this is that accidents are happening more frequently and also becoming more severe. There are a few factors that have been offered to explain the increase in frequency and severity:
- Increase in miles driven due to an expanding economy
- Companies hiring less experienced drivers to handle growth
- Increase in distracted driving
- More expensive vehicles with advanced technology, which means higher cost of repairs
With no sign of rate increases slowing down, it is important now more than ever before that business owners be proactive about safety and risk management. When an underwriter starts to review an account, one of the first things they take into consideration is how the business is managed. Here are just a few examples of the loss control measures that underwriting is looking for:
- Formal fleet safety program
- MVRs ordered at point of hire and annually
- Telematics program (GPS tracking/monitoring)
- Cell phone use policy
Most business owners would argue that adding telematics to their fleet safety program is too expensive, the good news is that some insurance companies are starting to provide the telematics programs to their clients for free. Yes, the insurance company is providing the GPS tracking systems for their insureds at no cost to the business owner. That equals thousands of dollars in savings alone just on the cost of the telematics as long as you qualify for the program.
If you are one of the many businesses out there dealing with higher commercial auto premiums, then it may be time to review your fleet safety program.
Charlie Winkler, CPCU
Principal, Risk Consultant