Before you purchase a commercial vehicle insurance policy, you should calculate the premium for it. This will help you compare the various plans and find the best one. You can also choose from various options according to features and premium rates. However, calculating the premium can prove to be quite difficult. You can get a rough estimate of the premium cost by visiting the websites of various insurers and requesting quotations. This way, you can easily compare different premium rates and features.
Rates are rising for companies with large fleets
The rate hikes in recent years have been staggering, with some policyholders paying more than seventy percent of their insurance premiums just a few years ago. The increase in insurance premiums is likely to continue, but there are several factors to consider before you choose a carrier. A large fleet with a clean record and regular maintenance is more likely to see a lower increase, according to a report from Risk Placement Services.
One major contributing factor is increased litigation, which has caused insurers to increase premiums by up to 10 percent a year. This pressure is being passed onto motor carriers, and is particularly high in the trucking industry. One recent ATRI report showed that insurers paid out more than four times as much for the same amount of coverage. Additionally, the economic conditions of the insurance industry have contributed to the rising rates. In the last 18 months, the median verdicts in cases involving commercial vehicles rose by fifty percent. A recent Georgia case involving a fatal truck accident resulted in a jury award of $280 million.
Another major factor is the rising costs of liability insurance. Insurance premiums have increased by more than seven percent over the past year, adding a huge financial drag on the trucking industry. To compensate for the losses, underwriters have been increasing the costs of liability insurance. Last year, many trucking companies had to endure double-digit increases in their coverage costs. Rate hikes are expected to continue into 2020. Some smaller trucking companies have already folded because of the rising costs.
Another factor contributing to higher insurance premiums is the type of cargo being transported. Trucking companies that transport expensive goods and services often face higher premium costs because of increased liability. In addition to cargo theft, thieves are more likely to target expensive machinery and electronics. The damage of these expensive items requires insurers to replace or repair them. The same is true for companies transporting products that need to be refrigerated. Even one mistake by a truck driver could destroy the entire lot.
Coverage limits affect premiums
Coverage limits are an important factor in determining the cost of a policy. While most states require at least a certain bodily liability insurance coverage limit, others allow for higher limits. The coverage limits quoted by commercial auto insurers are for all vehicles covered under the policy, not just one vehicle. Property damage liability coverage pays for damages to other people’s property, which could include buildings, mailboxes, and landscaping.
While commercial car insurance is designed to protect your vehicles and employees, it comes with many exclusions. Exclusions can include drivers who are not properly licensed, intentional damage, and certain areas or activities. You may also not be able to get coverage for non-employee drivers or hired vehicles. In addition, some policies do not cover cargo and equipment. This may mean you’ll need to purchase additional coverage.
Your coverage limits and driving record will also affect your premium. Higher physical damage coverage limits are required for larger vehicles because they can cause more damage in an accident. Physical damage premium is often a percentage of the vehicle’s value. The higher the value, the higher your premium will be. Additionally, the more vehicles and drivers your company has, the more coverage you will need. Long trips will also increase the cost of commercial vehicle insurance.
Other factors that affect your commercial vehicle insurance premium include location and the type of cargo your company transports. Businesses that operate in highly populated areas are typically more expensive to insure than those in less risky areas. Some coverages also look at how many employees your company has, since larger teams will have more expensive insurance premiums. And of course, your credit history is important. You may want to consider lowering the amount of your premium by getting a clean credit history.
Association discounts can reduce premiums
In addition to individual driver discount, insurance carriers often offer group discounts for membership in associations and clubs. These discounts range from AAA memberships to member benefits from organizations like fraternities and sororities. They are also available to certain occupations, like academic professors, attorneys, and doctors. They also encourage the installation of certain safety features in vehicles. Listed below are some examples of association discounts for commercial vehicle insurance premiums.
Multi-policy discounts apply to multiple vehicles. These discounts are often offered by different insurance companies, and may be mandatory in some states. For example, in California, insurers may automatically apply a 20% discount to commercial vehicle insurance policies for drivers with a clean driving record. You can also apply for group discounts if you are a long-term customer of one insurance company. Some insurance companies also give discounts to employees and retirees for having a clean driving history.
Lastly, you can qualify for discounts by driving environmentally-friendly vehicles. Green vehicles can qualify for alternative fuel discounts, which may lower your insurance costs. Another discount is electronic stability control, which diverts power from wheels with low traction. This system can also help drivers maintain control in hazardous situations by adjusting wheel power to minimize the risk of a crash. Finally, anti-lock brakes are another way to reduce premiums for your vehicles.
Association discounts may be offered for different types of businesses, and the insurers may offer a discount if you have membership in an association or club. However, keep in mind that you may not be eligible for every type of discount. The key is to find a company with a good reputation and reasonable terms. This can reduce the overall cost of your insurance policy and save you money. You can also use the same company to obtain multiple quotes for the same coverage.
In addition to individual driver discounts, insurance companies may also offer a discount for drivers under 25, teenage drivers, or people under 25. Young drivers may be eligible for discounts if they complete a driver’s education course. Good student discounts can save you up to 15%, depending on the specific terms and conditions of each provider. Similarly, owners of homes or other assets can qualify for discounts from auto insurance companies. It’s worth noting that the requirements and amount of these discounts vary from carrier to carrier.
State requirements affect costs
Insurance premiums vary by state, but the National Association of Insurance Commissioners collects data on how much each individual pays for auto insurance. This data shows the average cost for a policy in each state, based on the amount collected in each state and the number of vehicles insured. While some people purchase less than the minimum limit, many more opt to purchase more. Fortunately, there are many ways to compare insurance costs between states, and it may even help you determine which policy is right for your business.