It’s a simple question every truck owner asks at some point: how do I save money on my insurance rates?
As the owner of a trucking fleet, you’re asking even more, to save money on rates for your entire trucking fleet. You need insurance for each and every one of those trucks simply to run them on the road. Furthermore, to successfully keep you company growing and thriving, you need the best insurance you can get to keep your fleet in good repair and in compliance with all industry regulations.
Of course, insurance costs money (then again, what doesn’t?). The better the insurance, generally, the more you’ll spend to acquire and maintain it for your fleet.
Like all good business owners, you’re looking for ways to cut costs, not add on to them, but just as you can’t outfit a truck with second-rate parts and expect it to run at peak performance, you’ll get what you pay for when it comes to insurance coverage.
Still, there are ways to save on even the best insurance if you can keep your fleet in good shape and your trucks running smoothly.
Insurance companies can be put into three categories: Preferred, Standard/Wholesale and Non-Standard/Wholesale. Each offers insurance for trucking fleets, but each has certain requirements to get that level of service at an affordable rate.
Much of it comes down to a handful of factors, starting with your trucks’ ISS score. The Inspection Selection System score, as administered by the Federal Motor Carrier Safety Administration, determines a lot about your trucks and their reliability.
Insurance companies also look at how many claims are made on your vehicles and how severe they are, as well as the condition of your fleet and the experience of your drivers.
Preferred carriers expect to see ISS scores below 50, claim frequency of less than 10 percent and less than 30 percent of those severe claims, as well as the newest equipment and drivers with at least three to five years in the business.
Standard carriers are more lenient: ISS score of 75 or less, less than 20% frequency, less than 40% severity, as well as being more lenient on equipment age and total experience.
Non-standard carriers are typically your last resort when your data does no qualify for the other two tiers.
Now, better coverage in each tier will cost more as benefits increase, but counter-intuitively, you’ll pay more for the desperation coverage than the top-tier coverage, because the better your fleet and company are, the easier it is to get insurance in the first place.
For instance, one client at Fleet Risk Solutions was paying around $25,000 per truck with a Non-Standard market, yet currently spends about $12,500 per truck in a Preferred/Standard carrier.
That’s a 50 percent difference.
With the help of Fleet Risk Solutions, you can achieve such results by upgrading your fleet and drivers’ roster and improving your record on the road. The better you do, the less you’ll spend for greater results. Just the sort of math every business owner likes.
About the Author
Logan utilizes a holistic approach to assist trucking companies with growth, and survival in one of the most volatile times in our history. A strong risk management program is critical for every business, but trucking companies are extremely susceptible to breaks in the risk management process. Maintenance violations, driver violations, breakdowns, driver turnover, and the list goes on, all have a domino effect on each other, and the cost of operating a trucking company.