LMC Insurance & Risk Management
  • About Us
    • Leadership
    • Wisconsin Office
    • Accessibility
  • For Business
    • Property Casualty
    • Employee Benefits >
      • Iowa Health Insurance Pool
      • Share to Compare
    • Financial Services
    • Surety Bonds
    • Risk Management
    • Cyber Security
    • Executive and Owner Risk Management
  • Industries
    • Construction
    • Healthcare
    • Higher Education and Nonprofits
    • Hospitality
    • Manufacturing
    • Petroleum
  • Personal
  • Contact Us
    • Report A Claim
    • Iowa
    • Wisconsin
  • Careers
    • Open Positions
  • Online Tools
  • Blog
  • About Us
    • Leadership
    • Wisconsin Office
    • Accessibility
  • For Business
    • Property Casualty
    • Employee Benefits >
      • Iowa Health Insurance Pool
      • Share to Compare
    • Financial Services
    • Surety Bonds
    • Risk Management
    • Cyber Security
    • Executive and Owner Risk Management
  • Industries
    • Construction
    • Healthcare
    • Higher Education and Nonprofits
    • Hospitality
    • Manufacturing
    • Petroleum
  • Personal
  • Contact Us
    • Report A Claim
    • Iowa
    • Wisconsin
  • Careers
    • Open Positions
  • Online Tools
  • Blog

Welcome to the LMC Blog

What's causing increases in commercial auto rates?

4/24/2019

 
What's causing increases in commercial auto rates?
Over the past few years, more accidents have been attributed to smartphone use while driving. This, along with the higher cost of repairs, has led to double-digit increases in commercial auto insurance rates.

Distracted driving has led to sustained commercial auto premium increases for businesses of all sizes – from those with a few vehicles and drivers to those with large fleets. However, there are now several new factors that will play a part in ensuring rates continue to climb, at least in the near term.
​
Continuing factors

Distracted driving - This is the biggie. Before smartphones were introduced in 2009, there was a steady decline in vehicle accidents. As more people started using smartphones, claims costs started to reverse because vehicular deaths started increasing for the first time in decades. The culprit, say many transportation safety experts, is distracted driving.

Repair costs – As the technology used in our vehicles has advanced, the cost of repairing vehicles has skyrocketed. A 2018 research paper by AAA found that vehicles equipped with advanced driver-assistance systems (ADAS) can cost twice as much to repair following a collision, due to expensive sensors and calibration requirements.

Citing the cost of repairing windshield damage in a car with ADAS, AAA found some cars had cameras installed behind the windshield, which needed to be recalibrated after the windshield is replaced. This has increased the cost replacing such windshields to about $1,500, compared to $500 for a standard windshield.

Medical costs- Medical costs have also been rising steadily. Those increases carry over into the costs auto insurance companies incur when drivers and passengers are injured in an accident.

More miles driven - According to AAA, Americans are spending more time on the road. Driving more miles increases motorists' likelihood of having an accident. 

New and future risks

Weather-related property claims - A recent report in the insurance publication National Underwriter noted that commercial auto insurers say that the increasing frequency of large hurricanes, floods, hailstorms, and wildfires are leading to higher auto physical damage claims. The number of property claims has been steadily increasing in the past decade as both the frequency and severity of major weather events grow.

Lack of experienced drivers - As the economy expands, it becomes increasingly difficult to find experienced drivers. Making things more challenging is that  many experienced commercial drivers are retiring, and there are not enough job candidates with the skills and expertise needed to drive commercial vehicles.

The American Trucking Association estimates that the industry is understaffed by more than 50,000 drivers, and if current trends continue, this could increase more than threefold within eight years. 

Security with onboard systems - New vehicles are equipped with numerous technologies that rely on an array of devices, including radar, light detection and ranging, cameras, graphics-processing units, and central processing units. These advances could lead to new risks due to system failures that may result in accidents.

Comments are closed.
    We're here to help.
    ​1-800-677-1529
    ​
    Email Us
    Follow @lmc_insurance

    Categories

    All
    Compliance
    Construction
    COVID 19
    COVID-19
    Cyber Security
    Directors And Officers
    Employee Benefits
    Executive Benefits
    Healthcare
    Higher Education
    Human Resources
    Manufacturing
    News
    Personal Insurance
    Property And Casualty
    Risk Management
    Wellness
    Workers Compensation

    Archives

    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    April 2018
    March 2018
    January 2018
    December 2017
    November 2017
    October 2017
    August 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017

    While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept liability for any inaccuracies or change circumstances of any information herein or for the consequences of any reliance placed upon it. This publication is distributed on the understanding that the publisher is not engaged in rendering legal, accounting, or other professional advice or services. Readers should always seek professional advice before entering into any commitments.
LMC Insurance & Risk Management
​About   |   Blog   |   Contact

Iowa
4200 University Ave, Suite 200 
West Des Moines, IA 50266-5945
Wisconsin
8500 Greenway Blvd., Suite 201
​Middleton, WI 53562
 © 2021 LMC Insurance & Risk Management. All rights reserved. Privacy policy.