Top costly mistakes to avoid when purchasing insurance for commercial trucks

When it comes to commercial vehicles insurance coverage, which is a specialized subset of commercial insurance, it is essential for an insurance broker to have a firm grasp of the shipping, receiving, and transportation operations of their particular client.  

In addition, an insurance broker is required to have a deep understanding of the products that are offered within commercial auto insurance from insurance carriers. This comprehensive knowledge allows the broker to guide the client to the right coverage and steer clear of typical errors that are made in insuring commercial vehicles.

Making a mistake while acquiring insurance for commercial transportation might result in significant financial losses for your business. The following are seven common errors that may have a substantial impact on your rates as well as your entire coverage:

1. Leaving incorrect or outdated information on your SAFER report

The Federal Motor Carrier Safety Administration (FMCSA) is responsible for maintaining your SAFER report, which includes vital safety inspection reports regarding motor carriers. The information, on the other hand, might not be free from inaccuracies. 

When it comes to determining your rates, insurance underwriters depend on this data; thus, any mistakes might cause your prices to increase. Ensure that your premiums are fair by reviewing your SAFER report on a regular basis and requesting fixes for any inaccuracies that you find.

2. Overlooking errors on your loss runs

As is the case with the SAFER report, your loss runs, which include information on claims paid and reserved funds, are likewise susceptible to errors. These errors have the potential to distort your loss ratio and have an impact on your premiums. 

For the purpose of maintaining accurate loss runs and efficiently managing your insurance costs, it is imperative that you promptly resolve any inaccuracies with your insurer.

3. Inaccurate vehicle lists

Out-of-date list of your business vehicles can result in an increase for the insurance premium. It is imperative that you make sure your list is current and appropriately represents the condition and value of your trucks. Due to the fact that incorrectly recorded or depreciated values might lead to higher rates, it is vital to maintain thorough records to avoid unexpected rate hikes.

4. Keeping drivers that have a poor track record

Employing drivers who have driving histories that are not acceptable may result in hefty surcharges on your premiums now and may also result in potentially catastrophic liabilities in the future. 

In the event that a hired driver is liable for a major accident, the legal principle known as “negligent entrustment” holds your business accountable. Maintaining a regular assessment of your drivers’ motor vehicle records (MVRs) and removing those drivers who have a bad record can protect both your premiums and your company.

5. Selecting the wrong insurance carrier or policy

Choosing the insurance policy that is the least expensive might be a serious mistake. Usually, those are provided by an insurance carrier that is not up to par. Unpaid or delayed claims may be the consequence of a poor policy that has a large number of exclusions. This can be detrimental to your relationship with shippers and might lead to jeopardizing your company’s reputation. 

Make an investment in high-quality insurance from a supplier with a good reputation and financial standing in order to keep your customers’ trust and retain your reliability. STAR Mutual RRG provides not only reliable, but also affordable commercial auto liability protection for trucking companies.

6. An insurance program that is poorly designed

Overpayment may occur as a result of an insurance program that is ill-structured. To reduce premiums, think about increasing your deductibles or looking at alternative risk financing solutions, such as captive insurance. 

If your trucking business has a solid safety track record, using higher deductibles as well as implementing strong risk management practices can seriously reduce your insurance premium rates.

7. Working with an agent that lacks experience

An insurance agent who is both informed and honest is vital to your trucking business success. Inexperienced or less reliable agents can mislead you, which might result in costly mistakes and huge financial losses. Establish a working relationship with seasoned individuals who are familiar with the complexities of commercial trucking insurance, who are adept at assisting truck drivers in obtaining reliable and dependable coverage.

Conclusion

One of the most essential things you can do to properly manage your commercial trucking insurance expenses is to avoid making the common pitfalls mentioned above. In order to ensure the safety of your company, it is important to check and update your documentation on a regular basis, choose your insurance agent and carrier carefully, and put in place effective risk management measures.