How to Battle and Mitigate Rising Insurance Costs

Trucking companies face a difficult task of what to do to try and manage rising insurance costs. Most trucking companies no matter what the size are doing the basic safety initiatives like:

 

  1. Pre-Employment screening -PSP, MVR’s, background checks, etc.
  2. Proactive on-boarding process/safety training – in writing
  3. Safety culture/training – Is process/communication designed for success
    1. How is on-going training implemented with driving force? Must be documented.
  4. How do you measure success and what actions do you take from analyzing the data? Charts, scorecards, etc. Fleets must measure to insure accountability and consistency.
  1. Managing accidents, when they occur. This can help mitigate accident costs. It also helps you to understand your exposures and can reduce the potential for future losses. Post-accident training.
  2. Establishing written policies and procedures. This sets clear consistent expectations. This includes any safety recognition/incentive/gain-sharing plans and consequences for poor performance or failed drug tests, etc.
  3. Formalizing a plan for vehicle inspection, repair and maintenance. This can help reduce costly, unexpected breakdowns, and can assist in avoiding accidents due to faulty equipment.
  4. Drug testing policy – on-going random tests
  5. Make sure fleet is following all documented protocols and processes. This is a key area that plaintiff’s attorney’s like to focus on. So, make sure you do follow your own processes.

Other important qualitative factors that help you mitigate rising insurance costs are:

  1. Company must have a systematic organized process and control of safety. What that means is no one person or persons is the reason why it works. The processes, approach, content of training and reinforcement of safety and systems should be why it works.
  2. Retention/self-insured –It is a method of self-insurance whereby the organization retains a reserve fund for the purpose of offsetting unexpected financial claims. In the insurance world, risk retentionhas an even broader meaning. Simply put, every time your policy calls for a deductible, you’ve retained some of the risk. What is the correct amount of risk your willing to take on? This should be based on 10-15 years of history and what you would have paid if retention was at a specific level. Is the performance sustainable?
  3. You must have data visibility that can be converted into actionable changes that help you identify risks and if mistakes happen, corrective actions and levers to pull to improve process and systems.
  4. Rapid response to claims and claims adjusters need access to the data.
  5. Camera’s – this is an area that is almost expected to be implemented from the insurance underwriting point of view. Helps defend drivers’ actions, etc.
  6. Driver retention – the higher ratio of driver retention, statistically speaking, the company should improve your safety over time due to experience and familiarity with systems, processes and safety culture of the company. A safe and improving driving force is priceless and should be recognized.
  7. Communication – reinforce safety message consistently. Fleets can also utilize the use of podcasts, create private social media chat groups, and messaging apps to help keep employees and drivers in the know.

One of the best practices of Risk Management start with using Technology to improve your results. The best practice of Technology applying it to the Trucking industry with regards to insurance premiums are:

  1. Collision avoidance
  2. Lane Departure
  3. Blind side warning
  4. Adaptive cruise
  5. ELD’s
  6. Event recorders
  7. Camera’s (in and Out) facing

One of the most important vendor relationships, that the carrier/Trucking company has total control of, is the choosing of an insurance partner. Some of the qualities a best in class insurance provider displays are:

  1. Has an insurance agent that knows Trucking not just insurance? The agent should understand operations, how to manage risk management from the Truckers point of view, understand cost structures and be able to be flexible within ever changing industry.
  2. The agent and insurance company are always displaying truth, trust and integrity in communication and how they deal with their clients.
  3. The agent/insurance provider understands SMS scores, how to correct and positively impact them and understands how to create a safety culture and implementing a great safety program.
  4. The agent must be able to articulate alternatives to help trucking companies manage their insurance costs. Areas to address are: 1. The # 1 item is frequency control – need to be to setup programs that minimize frequency in many areas – Out of services violations, incidents, poor hiring and retention, etc. 2. Deductibles and risk tolerance 3. Self-insured retention, and other alternatives.

 

While all these initiatives are essential, they certainly do not guarantee results. It takes work, constant improvement of processes/systems and investment in the safety culture, especially from top management.

 

Providing the correct coverage, adding value to the operation and servicing the account is why you want to talk with us at TrueDTI.   https://www.truedti.com/

At TrueDTI we only deal with best rated insurance companies, that provide excellent service and if necessary, a proactive claims management process. Let TrueDTI become your trusted advisor, we have over 30 years of trucking experience and are committed to an excellent customer experience

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