Your Auto Rates Are Rising, Here's Why – And What to do About it

If you've already received your most recent insurance renewal you've probably noticed an increase to your commercial auto rates. If you haven't seen that yet – then it's something you should plan for. Regardless of your claims experience auto rates are rising across all industries.

Here are six reasons why

1. Distracted Driving is causing more accidents - We've all heard the warnings and know the dangers of distracted driving – but the fact is too many people still do it. Nearly 25% of crashes are caused by distracted drivers talking or texting on their phones. This is just beginning to get priced into your auto rates.

2. Escalating medical costs are increasing claims expense - Through all of the debates regarding medical care and the attempt to make it cheaper, medical care costs are still climbing 1.5 times faster than other costs. This has an impact on auto claims costs and as a result rates are increasing.

3. Technology is driving up repair costs - As the technology in cars improves so does the cost to repair them. Consider a simple rear end collision – an old car just needed a new bumper while a new car needs a new bumper and one or more new rear end cameras / distance sensors. A study done on a similar crash between a 2014 model and 2016 model showed an increase of 92% in repair costs.

4. More traffic - The amount of miles driven per vehicle has increased 3.3% year-over-year in the first half of 2016 and is now at an all-time high. More vehicles= higher frequency of accidents.

5. Increasing accident frequency and severity - Claim costs go up when there is an increase to frequency of claims or the severity of them – in the case of commercial auto, we have seen both.

6. Inexperienced or Undesirable Drivers - With the need for commercial drivers at an all-time high, the lack of skilled commercial drivers with good driving records is showing. Companies are hiring out of their comfort zone to meet demands. But this means greater odds for accidents which is bad news for insurance rates.

So now that you know why rates are going up you may wonder what you can do about it?

Here are eight things you can do at your company to limit the impact of rising rates.

1. Implement a fleet safety program – document a program, communicate expectations to all employees and establish procedures for regular training.

2. Enforce Company policy for use of vehicles – limit personal use of company vehicles, and closely monitor who is allowed to drive company vehicles.

3. Hire qualified drivers - document standards, check references, and do road tests.

4. Use a company fleet - risks go up when drivers use their personal vehicles on the job.

5. Train Drivers – make sure your drivers know what to do after an accident, implement a distracted driving policy, and emphasize proper rest.

6. Regularly check driving records – MVRs should be run at least annually on all drivers – in Ohio you can check an unofficial 2 year MVR for anyone for free!

7. Monitor divers with telematics – Equip your vehicles with technology so you can monitor location, speed and aggressive driving remotely.
8. Review every accident – learn from the past to prevent future issues and stay involved to minimize the cost of claims.

 

We take great care in helping our clients manage their risk. If you're interested in learning more about how to implement any of the tips above – and how to make sure you see the return on investment via your insurance rates, please give us a call.

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