Accidents can happen, and when they do, it’s only natural to expect an increase in auto insurance rates. However, even those with safe driving habits are noticing increases in the cost of coverage, with fleet owners hit especially hard. Below is information on Commercial Auto Insurance: What Business Owners Need to Know Before an Accident Happens.
During the recession, companies everywhere scaled back. Drivers were laid off, fewer deliveries were made, and manufacturers produced fewer products. However, activity is picking up once more, and companies are relying on their current workforces to pick up the slack. Risks increase as more miles are driven and, eventually, the company may have to add more vehicles to keep pace with demand.
The shortage of commercial drivers is increasing roadside risks. It’s difficult to drive long distances, and that fact has always posed recruiting challenges. Now, many of the industry’s most experienced drivers are nearing retirement age, and many don’t know where the next crop of drivers is going to come from. Recruitment issues are further complicated by new regulations, such as the requirement for electronic tracking sheets and time logs. Not all drivers are comfortable with this level of engagement, and the decreased level of independence may scare away many drivers. When companies hire less-experienced drivers, they increase their risks.
Lower Fuel Costs
There’s a direct link between fuel costs and accident frequency. When fuel is expensive, companies limit time spent on the road, which leads to fewer accidents. As fuel prices have been relatively stable, more cars are hitting the road for personal and business reasons—which equals a greater chance of accidents.
In the past, a large claim would have involved an attorney the majority of the time. Now, attorneys are getting involved in smaller claims as well. One plausible theory is that many new lawyers had to make their own way during the recession, so they aggressively pursued smaller claims to tap into a new source of revenue.
All of the above factors can drive up claim costs, which leads to higher premiums. While fleet owners have the most significant exposure, any company with corporate vehicles can feel the pinch. Monitoring economic and market trends can help business owners understand current costs and anticipate what may lie ahead.