5 Ways to Lower Your Commercial Auto Insurance Costs

3-minute read

Multimillion-dollar claims payouts. Insurance companies that are unwilling to risk a jury trial. Ever-higher premiums that are eating into your profits.

It’s frustrating, we know. Worse still, there’s little relief in sight, not with vehicle costs continuing to climb, not with driver shortages only growing, not with juries that readily award outsized verdicts, and definitely not with marijuana legalization gaining nationwide support.

What can a business owner with multiple vehicles in their fleet do to win better insurance rates? Tips on how they can fight back.

What can a business owner with multiple vehicles in their fleet do? How can you fight back and regain at least some measure of control of your commercial auto insurance rates? What follows are five key tips that not only can improve your safety record and lower the potential for claims, but ultimately win your business better terms from insurers.

1. Screen and Train Drivers

One of the most effective ways to manage your commercial auto insurance costs is by investing in your drivers. This begins with thorough screening practices during recruitment. Background checks, driving history reviews, and drug tests can filter out potentially risky drivers. Furthermore, once drivers are on board, invest in ongoing training programs to reinforce safe driving practices. This can reduce the risk of accidents and claims, which will reflect favorably in your safety record and reduce premiums over time.

2. Fleet Telematics

Telematics systems, which provide real-time tracking of fleet vehicles, can greatly improve your business's safety and performance. By monitoring driver behavior such as speeding, harsh braking, and idling, you can identify areas for improvement. Many insurers offer discounts to businesses that use telematics due to their ability to mitigate risk. Additionally, telematics can help you optimize routes and reduce fuel costs, creating a dual benefit for your bottom line.

3. Encourage a Culture of Safety

Building a safety-conscious culture within your organization can significantly contribute to lowering commercial auto insurance costs. Promote responsible driving habits and offer incentives for drivers with accident-free records or for meeting safety targets. This can lead to fewer accidents and claims, demonstrating to insurers your commitment to reducing risks.

4. Implement an Accident Reporting Procedure

Establish a clear and prompt accident reporting procedure for your drivers. Quick reporting can help expedite the claims process, reduce legal complications, and minimize payouts. By demonstrating efficient incident management, you can signal to insurers that your business is taking an active role in reducing risks, which may result in more favorable rates.

5. Implement a Robust Drug Testing Policy

Given the growing acceptance of marijuana legalization and its impact on insurance rates, implementing a strict drug-testing policy for your drivers is crucial. Regular drug tests, including random testing, can ensure that drivers are not under the influence of substances that impair their driving. This not only reduces the likelihood of accidents and claims but also signals to insurers that your business takes a proactive stance on managing risks associated with substance use. Maintaining a drug-free workforce can lead to better insurance terms and lower premiums.

The Mahoney Group, based in Mesa, Ariz., is one of the largest independent insurance and employee benefits brokerages in the U.S. For more information, visit our website or call 877-440-3304.

This article is not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.

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