The top three strategies you can implement in your business to reduce your commercial auto insurance cost.
By Kevin DiPetrillo, Partner, PointeNorth Insurance Group
Whether or not to expand your business operations should be a factor of market conditions and demand for your services. Instead, we’ve reached a point, in Georgia, where businesses are deciding whether to expand operations based on the cost of insuring the truck. These costs are passed on to consumers and lead to the high costs of common household services. None of this is good for our economy or our community. See my article in the last issue about what’s driving these high costs. In the meantime, here are some strategies businesses can use to lower the cost of their coverage and some of them translate to your household as well. All of these are variable depending on other factors and should be discussed with a qualified insurance agent.
I’m not going to tell you to run Motor Vehicle Reports (MVRs) on your drivers. There are a few risk control measures that are table stakes these days. Every business should be running MVRs on drivers annually. Your business should have a written driver standard that’s part of your employee manual stating what an acceptable driving record is and what the discipline is if an employee exceeds it — up to and including termination. There should be regular meetings to discuss safe driving behavior and driver training resources. Personal use of company vehicles should be prohibited. If your company is not taking these measures, you’re inviting claims, higher premiums, and fewer insurance carriers to choose from. Let’s assume you’ve taken these conventional measures and now you’re trying to think outside the box.
Here are the top three strategies you can implement in your business to reduce your commercial auto insurance cost.
First, lose some weight. Look at your auto premium broken down by vehicle and you’ll see that 60-80 percent of your premium comes from liability coverage. Liability protects your firm in a lawsuit resulting from an at-fault accident. The interstate is lined with billboards for plaintiff attorneys, and those attorneys salivate when the at-fault vehicle has a logo on the side because they know the policy limits will be high. Insurance companies use many criteria to determine liability insurance rates, but one of the largest factors is the Gross Vehicle Weight (GVW). Heavier trucks cause more damage when they hit someone. So, as you replace your fleet, consider purchasing the smallest vehicle that can get the work done. Can you use an F-150 instead of an F-250? It’s even better if you can shift to a private passenger style vehicle such as a minivan or Kia Soul. Nothing will have a bigger impact on your premium than maintaining a lighter fleet.
Second, it’s 10 a.m. Do you know where your kids are? You need to be using telematics to track your vehicles. The telematics program should have push notifications to management and discipline actions should be built into the employee manual. Your telematics program should have alerts for vehicles used after hours, geofencing to restrict where the vehicle is used, long idle alerts, and the common factors such as speed, acceleration, hard breaking, etc. A quality telematics solution with management actively reviewing results with employees can clean up driver behavior and claims very quickly.
Third, say cheese! According to the Governor’s Office of Highway Safety, 55 percent of crashes have at least one distracted driver, and as many as one in five drivers on the road are distracted at any given time. There is an epidemic of distracted driving in our state, and no tool combats it like a driver-facing dash cam. Many employees will tell you they don’t like having a camera pointing at them. Those are the exact drivers who need them. Many driver-facing dash cams come with AI software that will send a push notification to management if distracted driving is detected. You can appease your employees’ fears if you let them know you don’t look at the footage unless you get an alert. A common half measure is to have a road-facing camera system. This just gives you video evidence of your at-fault accident, which doesn’t help your legal defense. There is no more effective tool than a driver-facing dash cam for reducing accident frequency.
Discuss these strategies with your insurance agent to see if they’re viable for your company and think about them when you’re buying a vehicle for your household. Many personal insurance companies offer free telematics solutions that come with big discounts. Until next time, have a safe and successful spring.
Kevin DiPetrillo is a Partner at PointeNorth Insurance Group. With a degree in Risk Management from The University of Georgia, he has been helping businesses and High Net Worth households with their insurance needs for 25 years. Visit pointenorthins.com to see how the company can serve your needs.
