While most companies focus on driver training to help reduce the chances of accidents pushing up their insurance premiums, many executives have been frustrated to see their rates climb.
The top two factors affecting your commercial auto premiums are your history of claims and the driving records of your individual drivers. To get a handle on your insurance rates you should focus on hiring on mature, experienced, responsible drivers.
Once you have selected solid people, the next step is to enforce safety standards and provide them with adequate rest and the tools they need to drive safely.
New technologies and advances in underwriting are making it possible for employers to take a more proactive approach to risk management and claims reduction. The ultimate goal is to lower your premiums. Here are some steps you can take to keep your premiums down:
Monitor your drivers' records - Consider using an automated service to monitor your drivers' records. Drivers don't always self-report their tickets, accidents and DUIs. Automated driver record monitoring systems can routinely check for new violations, DUI or DWI convictions, license suspensions, revocations, and approaching license renewal dates. You get a report each month, and you can take action, if warranted.
Add GPS tracking to your vehicles - Advances in GPS tracking and displays enable you not just to track your vehicles' whereabouts and control malingering, but also monitor for speeding.
Turn the public into your eyes and ears - You've certainly seen those signs on the backs of commercial vehicles that say "How Am I Driving? Dial 555-555-5555." They work. But if you do get complaints, it's important to follow up on them, and in writing.
Pre-screen all new hires - Before hiring, pull an applicant's DMV records. You want people with one point or less on their licenses. Incidents happen. But if a driver has two or more points, you don't want them driving for you.
If you find a DUI, don't hire them - You don't want someone with a drunk-driving arrest on the road for you, and you don't want to be paying their insurance premiums.
Raise your deductible - For best results, keep your deductible above $2,500 or so. This keeps the fender-benders off the books. The deductible is usually trivial compared to the potential claim if your driver causes bodily injury to someone else, anyway.
Use the savings on your premium and bank them for future use in case of fender-benders. Or you can funnel it into more liability or umbrella coverage.
Maintain an ongoing safe-driver program - Set up an incentive program to reward or give bonuses to drivers when they reach milestones like a certain number of miles of incident-free driving. You can also provide bonuses if their safe driving helps reduce your premiums.
Safe-driving clause - If your state allows, consider a safe-driving clause in the employment agreement.
Don't overspend on vehicles - The more expensive the vehicle, the higher the premiums.
Consider whether you need collision coverage - If you have an aging fleet, or you can afford to replace one of your vehicles on occasion, consider cancelling collision coverage on your policy.
Employers that put in the effort to ensure they employ drivers with good records, and can show insurers they have put programs and measures in place to control their claims experience, have a better chance at taming their premiums.
Besides lower premiums, there are other benefits: Your business will pay out less in deductible charges, you have a safer workforce, and you spend less time and maintain productivity when you don't have to deal with the aftermath of accidents and the insurance claims process.
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