Insurance rates and premiums have been rising across the board. We saw this trend even before the COVID-19 pandemic, but the worldwide shutdown didn’t help the cause. One industry, in particular, that has experienced an exponential increase in insurance rates is the transportation industry. Both trucking and commercial auto insurance rates continue to be on the rise, despite safety improvements and coverage changes. In this blog, we will cover some of the reasons behind increased insurance rates/premiums in the transportation industry.
Why The Trucking & Auto Industry Is Facing Increased Rates
The trucking industry is one of the most important and fastest-growing industries in the United States. It plays a tremendous role in the country’s economy but there has been a recent shortage of drivers. Also, the rate of hires hasn’t increased causing problems within the industry.
With the shortage of drivers and increased demand for fast distribution, trucking companies and drivers are facing lots of pressure. This has also impacted trucking insurance rates and premiums for companies across the country. With that in mind, here are some other reasons the trucking industry is facing increased rates:
- Lower hiring standards: The driver shortage issue has led many trucking companies to lower their standards for hiring drivers. This has led to an increase in trucking accidents, which leads to increased insurance rates as insurance companies assume more risk.
- Distracted drivers: Distracted driving is a hot topic in the trucking industry. This is when a driver is texting, dialing, reaching for, or reading the screen of a mobile device while driving. Statistically, trucking companies lose about 75% of accident cases, regardless of who was at fault. Therefore, distracted driving is a relevant issue that must be addressed.
- High-risk losses: It’s important to consider the degree of loss in the trucking industry. Unlike personal vehicles, most accidents involving semi and dump trucks result in huge losses. This large risk causes insurance rates and premiums to inch up as more and more accidents occur.
Commercial Auto Insurance
In addition to trucking insurance increasing, commercial auto insurance rates have risen by double-digits in the last few years. More accidents attributed to smartphones have obviously influenced this, but there’s more to it. The following are additional reasons auto insurance rates are on the rise:
- High repair costs: The cost to repair vehicles has skyrocketed compared to the past. This is due to the technological advancement of commercial vehicles. The American Automobile Association (AAA) has reported that repairing a vehicle with advanced driver-assistance systems costs nearly double the price and in 2022, most vehicles come equipped with these systems.
- Medical costs: Health insurance premiums and medical costs have been on a steady rise for quite some time now. This increase, unfortunately, carries over into the auto insurance industry.
- More driving: Especially with the alleviation of the pandemic, Americans are spending more time on the road. This increases the likelihood of auto accidents which negatively affects insurance rates.
Learn Ways To Save With RRL Insurance Agency
With increasing rates and an abundance of different coverages, navigating the insurance world can become a headache. That’s why at RRL Insurance Agency, we are committed to providing expert insurance advice to help make your life easier.
When it comes to trucking and commercial auto insurance, no one does it better than RRL Insurance. We take the time and effort to understand your unique situation and can help reduce your trucking liability and commercial auto insurance stress. Our team will help you invest in protecting yourself and your business. With our assistance, you can find the best possible plan that fits your needs and saves you money. For more information on the services we offer, please contact us today to schedule an appointment.