Small fleets and independent owner-operators in California often have to reconcile commercial trucking insurance costs and the crucial protection these policies provide. Unfortunately, truck insurance is not a business expense that you can simply cut out of your budget. Luckily, there is a way to get cheap truck insurance that still works for your business. It might take a little work, but saving on truck insurance costs is a worthwhile effort to bring your overall costs down.
Since commercial trucking insurance companies consider a variety of factors when determining your rates, here are some things you can do to help make those California premiums more manageable:
Higher Deductibles Lower Premiums
While altering your deductible might not be the first step you try to lower your monthly premiums, you’d be surprised to know that it is an extremely effective tool in your arsenal. Your deductible is the out-of-pocket costs you incur before your insurance policy kicks in.
For example, let’s say you have a policy with a $1,000 deductible and get into an accident that requires $8,000 for repairs. You would first pay $1,000 out-of-pocket before your insurance company pays the $7,000 difference. If you were to raise your deductible to $5,000, you would see a drop in your monthly rates. Of course, this would also mean you’d be responsible for more out-of-pocket costs.
Before you call your commercial trucking insurance company to discuss moving to a higher deductible, there are a few things you should consider:
- Can You Afford the Higher Deductible?
You should only consider raising the bar if you have the cash on hand to cover the cost of an accident. You’ll want to look at your accident history to determine how often you may need this cash on hand. Someone who averages two accidents a year will need more available cash than someone who has a clean history.
- Will You Actually Save Money?
Do the math to decide if the decrease in monthly payments actually saves money overall. For example, going from a $500 to $1,000 deductible might save you 10% on your yearly costs. So instead of paying a $1000 premium, you spend $900 each year. You save $100 in payments, but if there is an accident, you will pay an extra $500. This plan could cost you $400 more for a single accident and may not be worth it. Work with your insurance agent to determine what makes the most sense.
- Do You Like Risk?
A higher deductible is a higher risk, so you’ll want to know how comfortable you are with it.
- What Are Your Trucks Worth?
More expensive vehicles cost more to insure. A higher deductible might make more sense. If a truck isn’t worth much, so a high deductible may not work. For example, if the deductible is $1,000 and repairs would only cost $500, you would just pay for the entire thing out of pocket without help from your insurance company.
Also read our blog post on What Can You Do to Control Your Truck Insurance Premiums
Focus on Safety for Cheap Truck Insurance
Commercial trucking insurance costs are a reflection of risk. Your insurance company looks at various factors to determine the potential risks and costs of an accident. If you are less likely to get into an accident, your insurance costs should decrease. Even though accidents can’t always be controlled, there are several steps you can take to give your team the best chance of safe driving.
- Hire Experienced Drivers
People who have been behind the wheel of a big rig longer are less likely to cause an accident. They understand how their truck handles, have the ability to deal with poor weather, and even know when it’s unsafe to drive. Look for drivers with at least two years’ experience.
- Hire Clean Drivers
Truckers with clean driving records will help lower your overall costs. People with a history of accidents and violations are viewed as a higher risk. Find drivers who have fewer than two minor violations in the last three years.
- Double-check Employment Histories
When you’re hiring drivers, look at their history. Those who have moved from company to company are often viewed as a higher risk than those with stable positions.
- Invest in Training
There are various programs that help teach drivers to be safer on the road. Not only will these types of classes give you better drivers with fewer incidents, but you’ll see some relief on your truck insurance costs.
The kinds of trucks you operate also play a role in your truck insurance costs. Insurance companies know they may end up paying to repair or replace a truck, so newer trucks might come with higher rates. At the same time, older vehicles are more likely to have mechanical problems that lead to accidents. It’s typically a better idea to have a newer truck than something older. When possible, stick to trucks built in the last ten years. It’s also crucial to keep your fleet maintained and serviced regularly.
Another thing to consider is what kind of cargo you haul. While you may be less inclined or able to make changes in this area, your cargo is worth considering. Hazardous materials are more expensive to insure because they pose more significant risks. If you are hauling more hazardous cargo, make sure you have the right kinds of equipment to reduce the chance of spills or other accidents.
Insurance companies are also going to look at how cargo is stored and how far it is being hauled. Since many policies also cover damage from natural causes or theft, they want to ensure you’re doing the right things to keep your cargo safe. The longer the cargo is on the road, the more likely it can be stolen or damaged, so that plays a role as well.
While you can’t change everything about the equipment you have, you might be able to make different decisions to keep up your workload while attempting to lower your truck insurance costs.
Commercial Trucking Build Around You
When in doubt, talk to your commercial trucking insurance provider for ways you can save. There may be discounts or programs available that you’d not considered. You might also need to shop around for a better insurance provider. There is nothing wrong with looking for the cheapest truck insurance every so often to ensure you’re getting the best coverage at the best rates.
While you’re shopping around, don’t forget to call SoCal Truck Insurance for a free quote. We know your business and want to help you get the best insurance available at the best possible price.