Truck insurance rates are skyrocketing and the reason is nuclear. We’re not talking about atomic energy, but rather a recent phenomenon in truck insurance known as ‘nuclear’ verdicts. These verdicts are shaking up the insurance industry, causing longtime truck insurers to exit the market, and making it harder and more expensive to get coverage. Here’s what you need to know.
What Are ‘Nuclear’ Verdicts?
When you purchase truck insurance you’re hoping to never have to use it, but unfortunately accidents do happen. Occasionally, when the accident is severe, your insurance company will need to negotiate a settlement on your behalf or head to court. Years ago these settlements were easy to predict, often covering lost wages or hospital bills, but things are changing. Jurys are awarding record-breaking settlements, often millions of dollars higher than lost wages alone. These super-size settlements are known as ‘nuclear’ verdicts and they have the potential to decimate profits for insurers. Since ‘nuclear’ verdicts aren’t predictable, insurers have a difficult time estimating risk and have the potential to lose millions, or even hundreds of millions, on a single claim.
How Are ‘Nuclear’ Verdicts Impacting the Truck Insurance Industry?
The unknown behind ‘nuclear’ verdicts is making truck insurance an unprofitable venture for many insurers, even some of the industry’s biggest. Major insurers including AIG and Zurich Insurance Group AG have chosen to stop offering insurance to for-hire fleets. Other insurers are hiking premiums to keep up with the increased risks and costs. Premiums have increased 10% to 30%.
Trucking companies are already spending a great deal on insurance and the extra expenses will be hard for many fleets, especially smaller ones. In 2015 the average U.S. trucking company spent just over nine cents a mile on insurance premiums. That number is expected to be much higher for 2016.
What Can You Do?
There is little that drivers and trucking companies can do to fight against price increases due to ‘nuclear’ verdicts. We’re working hard to continue to provide the best coverage possible and at the best rates. We work with many of the industry’s top insurers to ensure you’re getting the coverage you need. A stellar driving record and a clean DOT safety record can also help you to lower your rates. Focus on what you can change and strive to keep your record as clean as possible. Learn more about ‘nuclear verdicts’ from this article from the Wall Street Journal.
If you have any questions, get in touch. We’re here to help you ‘Travel with Care’ and that’s one constant you can count on in a changing truck insurance industry.
Most Important Benefits to Get With Truck Insurance
Truckers need to insure their vehicles, and for most, they simply look for the most cost-effective policy at the most reasonable price. It is vital to get good coverage, but as you are speaking with various truck insurance brokers, there are other qualities to look out for. There are numerous benefits to be gained, but you need to seek them out.
Assistance with Resolving Inaccuracies
A big component of the cost of someone’s insurance policy are prior claims and driver motor vehicle reports. Therefore, a trucking company that has had some accidents in the past will have to pay more for the same policy as a company with a clean history. However, various government agencies make clerical errors all the time, and it is entirely possible a company that has never had a problem will have a mark on its record. When searching for a new insurance provider, it is helpful to try to find an agent who will lend a helping hand in these instances. An insurance agent will most likely have greater success convincing an outside agency to change an error.
Availability to Talk
You will find yourself in situations where you need to talk to your insurance agent and the last thing you want is to deal with someone who is hard to get a hold of. As you are reviewing different policies, pay attention to how easy it is to get in touch with someone. You may contact an agency and get put on hold for a while only to be told the agent is currently out of the office. You want an agent and agency who makes an effort to always be accessible and a live body answering the phone.
Willingness to Give Options
An insurance agent should be there to give you exactly what you need and ask for. An agent will most likely inform you of different services you could potentially benefit from, but ultimately, it comes down to what you and your company need. Always look through a proposal yourself before making a purchase. An honest, upfront agent will tell you everything and not leave out any important details. That kind of transparency should be a priority for you in selecting an agent.
Buying insurance means you are entering into a partnership, and you want to make this union as viable as possible for years to come. Pay attention to what you are truly receiving to get the most out of it.
Truck insurance rates continue to spiral downward as the long term Truck Insurance providers compete with new Insurance Company entrants into this industry. Rates are down, on average, about 15% last year from 2006 and it is expected to fall another 5-15% again this year. The home page of Western Truck Insurance shows how much their customers have saved on their rates from 2006 to 2007. Great news for owner operators and trucking companies. Let’s hope the trend continues.