Truck insurance might not be your favorite thing in the world to think about. It’s not particularly riveting, it’s true, and, well, that insurance bill has a really big number on it. But one time that you really need to be paying attention to your insurance is at your renewal. Your renewal is important because your rates could go up. We’ll explain what a renewal is and what could cause your rates to go up (and how you can keep that increase from being too substantial.)
What is a renewal?
Basically, a renewal is just a way of continuing your insurance with your carrier. Your renewal date is based on when your policy expires, and it means that you either have to continue your insurance or get insurance elsewhere. Of course, you don’t want to let your coverage lapse, so your renewal is very important.
The renewal date depends on when you got the policy in the first place. Most policies are written for one year, meaning that you’ll need to either renew your coverage or get new insurance annually. Usually, you’ll receive information about your renewal a month or two before your renewal date.
In short – a renewal is a policy written to replace a current policy that is soon to expire. Your rates may or may not change at your renewal time.
Four reasons that your renewal might increase
1. Late payment.
This is one really big reason for a rate increase that is often overlooked.
If you’re late with paying your truck insurance bills, that won’t exactly endear you to the insurance company. They might get a little anxious that they’re not going to get paid. You become a riskier client if you’re not keeping up with your payments, and risk translates into higher premiums.
The easy fix for this is to be organized and prompt when it comes to your bills. Write down the date. Set reminders. Do what you have to do to make sure that bill gets to the insurance carrier with plenty of time. Keeping a clean loss record and paying your bills in a timely manner makes you a business that the insurance company likes to see – a reliable, responsible risk.
Filing claims can make your truck insurance rates rise. If your business faces accidents, for example, the insurance carrier could raise your rates because you’re more likely to experience another accident. And the more likely you are to have another claim, the more your insurance will cost. The goal is to not be a big risk for the carrier to insure.
Now – how does a truck business go about not being a risk to their insurance company? You can start by avoiding claims with the following tips:
- Have written workplace safety policies for your business.
- Be diligent during the hiring process and hire people who are safe drivers.
- Have a policy that will not tolerate distracted driving. Texting and driving is dangerous, and the FMCSA handheld cell-phone ban forbids drivers from using a handheld phone.
- Hold monthly safety meetings/training sessions.
- Have weekly check-ins with your drivers.
- Consider using GPS systems to track telematics.
- Start a preventive maintenance program.
- Have your drivers do pre-trip vehicle inspections.
These tips will help you improve safety at your trucking business, which in turn can help you save money on your truck insurance.
3. Tickets for traffic violations.
If your drivers have tickets (speeding or other traffic violations) on their records, that also indicates risk to an insurance company. Tickets and traffic violations can mean that the driver is not the safest person on the roads. And since insurance companies don’t love risk, you could be facing higher insurance rates if you’ve got a history of tickets and violations at your business. It’s very important that you emphasize safe driving and have workplace policies at your business.
4. Commercial auto insurance rates have been going up across the board.
Commercial auto insurance rates, in general, have been rising. So, if your renewal is higher than you might have liked, you’re not alone. Truck insurance is tough right now for a lot of businesses.
Now, the increase in rates isn’t because insurance companies are out to get you. It’s not that they’re arbitrarily raising rates because they can. There are several reasons for the change.
- Bodily injury litigation expenses are rising
- Medical expenses have gone up
- Distracted driving and other reckless driving behaviors contribute to the frequency of accidents
- People are on the road more
- Vehicles themselves are pricier to repair and replace
All of these factors add up to this:
The frequency and severity of accidents has been going up, which means that any claim you might have could be substantially higher. The insurance company has an increased chance of having to pay out a lot of money for a single claim…and that has resulted in rising premiums to offset this probability.
So, if you’ve paid your bills on time and you haven’t had to file any claims, but your renewal rate is still higher than what you used to pay, it could be that it’s the trend of the truck insurance market catching up with you.
These are four possible reasons that your renewal rate is higher than what you’ve been paying. Late payments, claims, and tickets for traffic violations can all cause higher renewal rates. Plus, it’s just the overall trend of commercial auto insurance in general.
But not all is lost when it comes to saving money on truck insurance. Our truck insurance experts would be happy to talk with you about shopping for some commercial truck insurance quotes. We’re pros at helping truck businesses get the best insurance at the best rate. To get started with some quotes, just fill out our online form or give us a call today. Whether you have dump trucks, tow trucks, flatbeds, or semis, we can help.