Recent reports indicate owner-operators and others in the trucking sector can anticipate rising insurance premiums. With spiking diesel prices and inflation exceeding 40-year highs, truckers need to tighten their financial belts.
An American Transportation Research Institute (ATRI) research advisory committee recently analyzed the long-term implications of escalating insurance costs. The research concluded that freight haulers have widely been employing strategies that involve decreased coverage levels, raising deductibles, and Self-Insurance Retention to buoy or maintain cash flow. These practices, however, are increasing the liability exposure of entrepreneurial truckers.
“Despite reductions in insurance coverage, rising deductibles, and improved safety, almost all motor carriers experienced substantial increases in insurance costs from 2018 to 2020,” an ATRI press release states. “Premiums increased across all fleet sizes and sectors, with small fleets paying more than three times as much as very large fleets on a per-mile basis. One-third of respondents reported cutting wages or bonuses due to rising insurance costs, and 22 percent cut investments in equipment and technology – potentially creating future safety and driver shortage concerns.”
That’s largely why owner-operators need to find savvy ways to reduce the price of insurance without increasing liability exposure. These are cost-cutting measures worth considering.
1: Reduce Your Operating Radius
Driving distances have an impact on semi-truck insurance and passenger vehicles alike. Truckers who pull loads from coast to coast are more likely to pay higher insurance rates. Owner-operators may want to do the math on regional routes and review the numbers. Sometimes less driving can mean more money in your pocket.
2: Consider In-State Operations
When CDL professionals cross state lines, that often triggers an insurance coverage increase. If you’re based in a large state such as Texas or California, remaining in-state may not be too difficult. Unless you live in a tiny state such as Rhode Island, in-state routes are worth considering.
3: Driving Records Matter
Truckers with unblemished driving histories typically enjoy lower rates than others, if all things are equal. Avoiding infractions will help you get the lowest rate and policy options possible for the money. It’s also important to keep track of aging tickets. There are generally time limits for how long an insurance carrier can hold them against you.
4: Change Cargo You Haul
Earning a HazMat designation allows professional CDL holders to transport cargo that pays higher rates. By that same token, hazardous materials generally cause insurance premiums to spike. Take time and do the math on the materials you’re moving. It may be prudent to switch cargo or ask for more money.
5: Improve Credit Your Scores
Credit scores and your truck-driving skills may seem unrelated. That’s until you apply for annual insurance. It’s usually the case that a big insurance company will check your FICO score when underwriting a policy. To remedy this issue, request a free credit report from Equifax, Experian, and TransUnion. Review that information and fix any errors. You can also rectify any issues and improve your credit score before the next policy goes into effect.
With surging demand for CDL holders, truck drivers are earning more money than ever before. There’s no reason to give insurance corporations any more than is absolutely necessary.
Source: prnewswire.com
This is just another way to push out the single truck, O/O, trying to earn a living. My insurance jumped $2000 this year. The first two suggestions you have in this article hamstring the whole industry. Driving records have always mattered. My credit score, which is great, is none of their business. They are insuring my work vehicle and my cargo, not my credit history.
Agree with this comment. Again, there is and has never been a shortage of professional drivers. There is however a shortage of steering wheel holders. The industry doesn’t advocate for professionals, they want conformist.
Your state where you are based play a factor too, the attorneys advertising how to sue trucks, doesn’t help.