Skip Ribbon Commands
Skip to main content



 ‭(Hidden)‬ Catalog-Item Reuse

3 Ways to Mitigate Commercial Auto Premium Increases at Renewal

As premiums increase, carriers implement more stringent underwriting requirements, and inflationary pressures increase overheads, it all may prove too much for some businesses.
Sponsored by
3 ways to mitigate commercial auto premium increases at renewal

The majority of businesses have commercial auto exposure. And whether they are a transportation company or a local florist, they will likely experience a difficult renewal process for their commercial auto policy. As premiums increase, carriers implement more stringent underwriting requirements or restrictions, and inflationary pressures increase overheads, it all may prove too much for some businesses.

However, “this makes it more important than ever for agents to help their customers navigate the market and understand the impact of their exposures and controls on their ability to obtain commercial auto coverage at the best price," says Peter Matthews, senior vice president, commercial truck, IAT Insurance. “Well-managed risks are more attractive to insurers and there will typically be adequate capacity available for risks that have good controls to minimize claims."

Independent agents excel at being trusted advisors for their clients, knowledgeable in both the industry and their client's business operations. Here are three strategies agents can use to help clients where the costs are hitting the hardest:

1) Know your clients. Many transportation clients may haul one type of cargo one week and then have an opportunity to haul a different type the next, making it important for agents to keep close tabs on their clients' insurance needs. 

“Providing that information to carrier partners to help them understand what's going on with the client can potentially reduce their costs and opens a door to an array of carriers that may be able to provide the proper insurance to those clients." says Mark Gallagher, vice president, national transportation practice leader, Risk Placement Services (RPS). 

Also, partnering with companies that specialize in transportation coverage helps agents provide the best service possible for clients. Certain carriers have underwriters, claims representatives and safety consultants who can provide value to both the agent and customer.

“They understand the coverage needs of a trucker by knowing how to handle claims involving large trucks and by knowing how to improve the safety practices of motor carriers," says Nick Saeger, assistant vice president of transportation products & pricing, Sentry Insurance. “And while there may be some price benefit to be found at non-expert insurance companies, what's given up in those circumstances often far outweighs any premium breaks."

2) Inflation considerations. Inflation is impacting every industry. But when it comes to the commercial auto industry, one area in particular is being impacted: the cost of repairs, which is leading to increases in equipment values.

“Over the last two or three years, we've seen a significant rise in equipment values and we continue to encourage agents to have their clients reevaluate their equipment to ensure they're properly insured," Gallagher says. “In a total loss situation, if they go out and try to find a different tractor or trailer that's comparable, a lot of times they'll be paying a lot more."

Additionally, as the price of commodities increases, “it is important for the insured to understand the value of the cargo being hauled and the insurance requirements in their shipper agreements," Matthews says.

3) Risk mitigation and management. Technology, such as telematics, can help transportation companies improve efficiency and productivity, as well as provide key data on driving characteristics and behaviors to carriers that could reduce premiums.

Along with the use of telematics, driver cameras can help clients in managing their premium rate. “Many carriers are either offering subsidies or are providing cameras—inward and outward facing— free of charge which help carriers understand what happened at the time of loss," Gallagher continues. “Today, there's more and more usage-based mileage rating that's going on and, in some cases, discounts on insurance."

In addition to telematics, “agents can leverage loss control services to help clients improve safety and operating costs," Matthews says. “Many loss control representatives have vast experience with many similar operations and can offer advice and best practices to help improve a client's operations."

Olivia Overman is IA content editor.

Monday, December 5, 2022
Commercial Lines
Big I Markets