Being one of the top three costs of doing business as an independent motor carrier, insurance is right up their with the cost of fuel and paying a truck note. Depending on what you haul and your safety record, the rates for insurance can be staggering to say the least. Of the four years I have been an independent carrier having to shop for my own insurance, you would think a flawless safety record would mean decreasing premiums. After all, in the auto industry there are things like longevity and good driver discounts for this very same reason. The same however cannot be held true in trucking, where I’ve found even a flawless score can bring in a 5-10% increase in premium come renewal time.
We’ve all heard the headlines of increasing congestion, higher numbers of distracted drivers and increased truck crashes out there on the roads, but few really make the connection between that and increasing insurance rates. We often tend to just think of increased premiums as an inconvenience and write them off as a part of doing business. There is a direct correlation though, as widespread and different as most company’s quotes may be, between national statistics and average renewal rates. So even though you have a year over year “zero loss” run with a particular carrier, more dangerous national statistics still may increase your premium. On the opposite side of the spectrum, with increased risk overall nationwide to insure truckers, I have heard some friends of mine complain of nearly 30% premium increases just from a single minor incident being claimed on their previous year’s loss run.
If you haven’t renewed for 2019, be assured when you get a small increase like I did, that you are most likely feeling what most carriers out there are this year, with slight increases being the standard with all insurance carriers I have talked with lately. The most important thing is to continue to maintain a safety program geared towards mitigating or eliminating the losses that will increase your premiums much more the next year. Don’t fall for the old “bait and switch” of some insurance brokers who will quote you a better rate only to leave you with sub-par rated coverage, higher deductibles or inadequate levels of coverage when all is said and done! Make sure your coverage is AmBest rated “A” or better so that you don’t find yourself being turned away by some brokers unwilling to do business with insurances that don’t meet this benchmark. With some renewal quotes I’ve heard of in the dry van world ranging conservatively from $10K all the way up to an outrageous $20K per tractor-trailer combination annually, be sure to shop around and evenly compare coverage for the best deal possible. For the most part, all the insurance premiums we pay as owner operators may seem burdensome, but you will be glad it is there in the event you need it!