Insure big rig
As you have probably noticed lately – insurance rates are increasing. The main reason for the increase are the increasing costs of claim settlements. We live in a litigious society and trucking companies seem to be the target of choice for personal injury law firms. The reason law firms are focusing on claims involving commercial vehicles is that they know that with them come high auto liability limits. Most trucking firms are carrying at least $1,000,000 liability limit to satisfy shippers and afford additional protection of assets. A standard personal auto liability limit is usually as low as $30,000 to $50,000, so why mess around with a little money when you can go after the big bucks.
Personal injury law firms are not only searching out clients involved in accidents with commercial vehicles, but they are also becoming savvy in their understanding of statutory and federal regulations (including hours of service violations, DOT inspection violations, and other truck related violations). These violations allow the plaintiff attorney additional ammunition in making their claim that this 80,000 lb rig caused their client injury due to driver error. A driver’s motor vehicle record can be one of the most damning pieces of evidence in a bodily injury claim, showing a track record of “reckless” driving habits (speeding, DUI, failure to yield, and even equipment violations). This is the main reason that insurance companies are now insisting the trucking firms hire only drivers and owner operators with good driving records and clean accident history. The job to defend a trucker has become tough enough without throwing a poor driving record on the table.
Along with the increased settlements, including repair and part’s costs, come increased premiums to help make up for the shortage of claims funds, as well as stringent driver, equipment, and procedural guidelines. However, there is a brighter side to this story. To control insurance costs companies and individuals can make sure they are taking the proper risk management steps to minimize their exposure to a serious claim or claim frequency.
1. Hire good drivers. These are drivers with good driving records, good experience, and professional attitude
2. Train the drivers and educate and reeducate them. Thoroughly train and retrain your drivers in proper handling and securement of freight and familiarize them with your various traffic lanes. Educate them on the hazards of the increased speed limits and increased traffic on our roads and highways as being the major contributing factor to accidents. Get them involved in defensive driving courses!
3. Create a driver award and incentive program. Everyone likes to know when they are doing a good job and truck drivers are no different. Set up a driver award program, which we offer you help in implementing at no cost to you, and an incentive program. Give your drivers something to strive for and to be proud of.
4. Make drivers aware of losses. Discussing claims by committee or individually can help educate the drivers on how to avoid similar type claim situations in the future. Also, show the drivers and your insurance carrier that at fault claims will not be tolerated in your company by setting up your own minimum driver guidelines for violations and claims.
5. Review your insurance deductibles and equipment values. Taking on higher insurance deductibles will not only lower your premium, but will also make drivers more cautious if in your contract you are making them – particularly owner operators – responsible for claims deductibles. Also, review your equipment values as not to over insure your equipment.
6. Finally, sell all personnel on the fact that you want to be a safe company. When we shop your insurance the greatest selling item that we have is your loss ratio. (Loss Ratio = Premium Dollars Paid by you to the insurance carrier divided by Claims Costs Incurred). Insurance companies are looking for loss ratios of 50% – 70% or less, which means that they would make .30 – .50 cents on the dollar. This might seem like a lot, but insurance companies know that eventually the large claim will happen and the personal injury lawyers are banking on it.
