There are proven ways to minimize fleet insurance rate increases, but you can’t wait around. By the time your next renewal invoice arrives, it will be too late.
How Fleet Insurance Rates Are CalculatedPretend you own an insurance company. You want to maximize profits by paying out as few claims as possible. To accomplish this, you need to do business with low-risk fleets. How do you attract these choice customers? By offering them the best rates.
Put another way: if your fleet wants low insurance premiums, you have to prove you're worthy. How do you do that? Well, your incident and history is a major factor, but a blemished past doesn’t necessarily mean you’re locked in to high rates.
The insurance underwriter will weigh a variety of factors to estimate how much your business will cost the insurance company. Proven risk-management activities such as preventative maintenance and safety training can help counteract past transgressions.
Compare Two Approaches to Lowering Insurance Rates
Imagine two competing delivery companies, Fleet A and Fleet B. These two fleets are equal in every way: they have the same number of vehicles, drivers, and they operate in the same town. Last year, both fleets experienced 20 parking lot incidents that resulted in a claim.
Drivers: Your Best Asset and Biggest Liability
Fleet A enrolled existing drivers and any new-hires in an online defensive driving course. Since implementing the new program, claims have plummeted.
Fleet B told their team members to be more careful and fired the driver with the worst accident record. Their incident rate declined slightly.
Fleet A is more likely to get lower insurance rates than Fleet B not only because they have fewer incidents, but because they have an ongoing, documented approach to preventing future claims.
Even if you don’t submit claims for small repairs like parking lot fender benders, these out-of-pocket costs quickly add up. Think of it this way: If your fleet has a 3 percent profit margin, and last month’s repair bills cost $3,000, that means your company has to earn an additional $100,000 in revenue to cover that loss.
More Ways to Lower Commercial Fleet Insurance Premiums
HNI predicts insurance rates will increase 5-20 percent in the near future. Here are some additional steps you can take today to avoid a massive insurance rate increase tomorrow:
- Ask your insurer how your fleet's incident rate compares to others and share the information with your drivers. If your rate is lower than average, congratulate them. If it's higher, remind them why safe driving is in everyone's best interest. Take it from an industry pro - clear and open communication with drivers is the best way to gain buy-in for safety and training initiatives.
- Don’t lower your standards. Even one driver with a bad history can increase insurance premiums 10 percent.
- Look for patterns in your incident records - you may make some surprising discoveries. Saving money may be as simple as changing tires more often, avoiding a particular intersection, or assigning a course on pallet jacks or how to back up a straight truck. Be sure to look at all incidents, not just the ones you told your insurance company about.
A below-average incident rate paired with documented risk-management activities can help you unlock the lowest insurance premiums. ITI’s ClearDrive™ makes it easy to achieve both of these things.
The Quick and Easy Way to Get The Best Fleet Insurance Rates
- Our convenient, online driver training is proven to reduce incidents.
Our learning management system (LMS) is easy to use and automatically documents safety training
According to a recent study, fleets can reduce their incident rates up to 35 percent by implementing a driver risk-management program, yet fewer than 42 percent of companies have any type of mandatory safety training. By investing in driver safety training, your fleet can outmaneuver the competition (safely, of course).
- Build a monthly, quarterly, or annual training plan - our library includes 70+ courses including: distracted driving, proper lifting procedures, parking lot, and loading dock safety.
- Or, opt into a pre-built training plan. Here’s a sample 12-month training schedule.
- We can modify any lesson to include your operational policies and procedures and/or create custom training.
- Score bonus points with your insurance company by enrolling drivers in remediation training following an incident. With ITI ClearDrive, you can assign incident-specific corrective training in just a few clicks.
Buy-in Problem? Here's What to Do.
Convincing company leadership to spend money in order to save money can be challenging. Here are a few ways to make your case:
- Circulate the ever-popular coffee cost comparison infographic (shown above).
- Share this stat: according to OSHA, 61 percent of business executives believe their companies receive an ROI of $3.00 or more for every $1.00 they invested in workplace safety.
Add up your fleet's average year-over-year insurance rate increases and compare to our very reasonable subscription rates.
Review the tips in this article: How to Gain Executive Buy-in for Driver Safety Training.
Would you rather live in fear of your next insurance renewal letter, or invest in safety training that will improve profit margins and wow your boss? The choice is up to you.
If you’re tired of forking out more and more money each year for insurance, why not contact one of our helpful and friendly training consultants? Start a conversation online or by phone (360-576-5976 option 4) and take the first step to unlocking the best fleet insurance rates.