Commercial auto insurance rates are increasing due to a significant spike in accidents in the last few years. More miles are being driven (about 3%) which combined with other factors, has led to a significant increase in commercial auto claims across the industry. The increase in miles driven is not linear to commercial vehicle accident rates. The increase in accidents is actually much higher than the increase in miles driven. As a business owner with a fleet of vehicles, it is more important than ever to keep accidents in company vehicles as low as possible.
While miles driven is the biggest factor for the increase, other factors such as distracted driving and speed are also contributors. Some accidents are bound to happen no matter what safeguards are in place, however, the key is reducing the number of at fault accidents in company vehicles. These are the accidents that are completely preventable, ones that happen due to driver inattention and carelessness. As a business owner, there are many safeguards to implement to decrease preventable accidents.
If one is not already in place, create a fleet vehicle policy that outlines the rules, consequences, and monitoring checks that will apply to all drivers. Implementing a fleet policy is not difficult and Insurance Associates can assist setting one up. There should be clear and defined procedures for how driver history will be monitored to what disciplinary consequences will happen after infractions. Some ideas is having the employee that was at fault for the accident pay the deductible (double check to make sure this is legal as some unions and venues may not allow) or having the employee go to a mandatory driver safety course. If a driver has more than one at fault accident, he/she should not be driving a company vehicle.
Doing a pre-screen of all new hires is a must. Run a potential new hires DMV report to check driving history. In most cases these reports are inexpensive and available through the state. DUIs and DWIs are deal killers. While the insurance company will likely run the DMV reports for all drivers listed on the policy around renewal time, consider doing this again in the middle of the policy period as an additional check. Employees driving habits in their personal vehicles are likely to carry over to commercial vehicles.
Consider adding GPS tracking to all the vehicles. There are many great options that can be used to keep track of employees driving habits and also potentially helping the business. GPS tracking can monitor things like speed, hard stops, and if the vehicle is idle for too long (is the employee actually working?). The GPS tracking makes it possible to track vehicles and see if operations can be changed to be more efficient and better while keeping employees safe and at fault accidents down. When employees know that GPS tracking is in the vehicles and the things it monitors, a steep drop in preventable accidents usually follows quickly.
Maintaining an ongoing driver safety program with incentives is another option. Reward drivers for miles driven without an accident or employees that proactively complete defensive driving and safe driving classes. Also, turning to public is another great option. Consider a “how am I driving” sticker and phone number on the back of the vehicles. If complaints come in it is important to follow up on them and ensure that they are legitimate.
Commercial auto rates are increasing fast and show no sign of slowing down. Keeping premiums low is critical to creating a competitive advantage over other business in the trade. At the same time keeping employees safe and productive widens that advantage. Insurance Associates can assist with any of your commercial auto needs. Contact us and get on the road to eliminating preventable auto accidents today!
Information about the Author: Before coming to Insurance Associates, BJ spent twelve years working for several property and casualty insurance companies with four years in management. He completed his studies through The Institutes and earned the prestigious Chartered Property & Casualty Underwriter (CPCU) designation in 2012. BJ graduated at the gold level from ABC of Metro Washington’s Leadership Development Program. At Insurance Associates, BJ is first and foremost an advocate for our clients. Whether it’s helping a client to lower their experience mod or using his expertise to get a claim paid for a client, he is always available to help a client with any of their claims needs. In his free time BJ is most likely to be found on the golf course.
William (BJ) Westner Jr., CPCU, CRIS
Senior Claims Consultant