Insurance is one of the most significant expenses a trucking company will incur. While it can cost your company in the short term, the potential longer financial risk of not having insurance or being underinsured can devastate your company.

Several factors impact your premiums. These fall into three categories — drivers, vehicles and business operations. Some of these are within your control, so you can take steps to lower your premiums. This article will review variables that influence your truck insurance rates.

What Contributes to Trucker Insurance Cost?

Insurance companies weigh multiple things when determining your premium. Naturally, the more high-risk a company finds you to be, the higher your payments. Before choosing an insurer, it’s wise to compare at least three quotes to ensure you get a fair price.

Driver Factors

Let’s start by looking at the driver factors that influence your premiums.

  • Age and experience: Commercial truck insurance for high-risk drivers tends to cost more. Insurance companies consider drivers under 25 to be less safe, so they cost more to insure. Older, more experienced drivers generally know how to avoid accidents, adjust to different circumstances and handle the truck in various weather conditions. While insurance companies prefer older drivers, those over 60 are also higher-risk. Some insurance companies may be flexible with older drivers who are healthy and have no accidents or tickets.
  • Driving record: Applying for commercial truck insurance with a poor driving record can be expensive. A clean driving record demonstrates responsibility, which can help you get lower premiums. Finding competitive rates may take more research if you have had a few accidents and violations. Even one violation or accident can raise your premiums, so ensure your drivers practice road safety and conduct inspections before going on their runs.

Vehicle Factors

The vehicle’s type and condition also affect your insurance rates.

  • Type of vehicle: Insurance companies consider larger and heavier trucks higher risk because they are harder to maneuver. They are also more accident-prone, which can cause driver injuries and vehicle damage. Heavier trucks also tend to carry more dangerous cargo, resulting in higher premiums.
  • Vehicle age and condition: Your truck’s age also impacts your premiums. The cost of replacing a newer truck is higher, so you can expect to pay more than you would if you have older vehicles. On the other hand, older trucks are also more prone to breakdowns, maintenance problems and accidents. As the vehicle deteriorates over time, it will need more repairs. You can invest in newer vehicles with advanced safety features to keep your premiums low.
  • Maintenance and service history: Routinely maintaining and servicing your truck will keep it in good condition, prevent downtime and help you avoid Department of Transportation fines. It also decreases your insurance bills and reduces instances of liability insurance.

Business Operations

Operational variables all play a role in your insurance premium. Consider the following.

  • Type of cargo you transport: One of the first questions a potential insurer will ask you is what you haul. Since some loads are more prone to theft or riskier to transport, it costs more to insure. For example, food may be easier to transport than a flammable substance such as gas. The higher your cargo’s value, the more it will cost to cover. While insuring high-value freight may be more expensive, it can save you from a financial disaster. Underinsured cargo can significantly impact your business if something goes wrong.
  • Your location: The state where you operate can also affect your premiums, as some mandate more coverage than others. The mileage your trucks accumulate and the routes they drive may also affect your insurance rates. Routinely driving on hazardous routes can also increase your premiums.
  • Type of business: Insurance companies also account for your structure. If you want to insure multiple trucks and drivers, these each pose individual risks and costs, which will likely change your insurance premiums. Ask your insurer to help you balance the amount of coverage you need with the cost.
  • Years of operation: Insurance companies tend to be wary of newer companies, as they know the growing pains of starting a business from the ground up. A trucking business with a long track record of success should cost less to insure.
  • Company’s safety rating: Insurers want to avoid paying for frequent claims, so they will charge higher rates to companies with lower Compliance, Safety and Accountability scores. Check with the Federal Motor Carrier Safety Administration for clarity on your CSA score. Be proactive about lowering this number and save on lower insurance premiums in the long run.
  • Coverage history: An insurer will always check your insurance history. If you have previously canceled a policy, they will want to know why. Underwriting issues or failure to pay will affect your rate.

Why Is My Truck Insurance High?

Trucking insurance tends to be higher than other coverage types. While this can be frustrating for frugal business owners, you must understand what factors are at play.

Specialty Carries

Few carriers offer commercial trucking insurance. Even well-established insurance companies won’t insure specific types of trucks. Specialty carriers understand the risks associated with specific businesses and can give you sufficient coverage for your operations.

Higher Industry Losses

Most truck accidents result in significant losses from damaged vehicles, injured drivers and bystanders, lawsuits and long-term pain and suffering.

Realistically, you can’t control every variable. Instead, focus on improving your operations and ensuring your drivers prioritize safety. Investing in newer technology can lead to better companywide driving records. Remember to make all your payments on time, as letting your insurance lapse can result in higher premiums.

Get an Insurance Quote With Porter Freight Funding

Now you know more about all the variables that might affect your trucking insurance rates. Though you can’t influence all these, you can keep your premiums low by following strict safety protocols and maintaining your vehicles.

Do you need help finding competitive insurance rates? At Porter Freight Funding, we help trucking businesses find the best coverage for their operations with timely advice that supports their goals. To request an owner-operator quote, contact us today or call us at 205-397-0934!