2 Tips to Lower Auto Liability Costs in Owner Operator Fleets
September 15, 2020
The average trucker’s auto liability premiums are increasing by 9.6%1. Why? Several insurers are exiting the marketplace due to bad losses. The insurers that remain are raising rates to outpace rising claim costs. As a result, even good trucking company’s costs are going up. So what can you do to keep your auto costs down?
- Take higher deductibles AND recover those deductibles from your owner operators. Seems pretty simple, but the bigger deductible the cheaper your insurance. Most fleets pass on all or a portion of those deductible costs onto the owner operator. The challenge becomes getting the money from the owner operator when the claim happens. Fleets solve this problem by installing Deductible Buyback insurance. Owner Operators pay a small premium in exchange for a deductible reimbursement. For example, a $9 per week premium reimburses up to a $5,000 per occurrence auto deductible.
- Install a “Better Bobtail” policy. It is no secret “off-the shelf” Bobtail, which is really Non-Trucking Liability, pays very few claims. Denied Non-Trucking Liability claims turn into your Auto Liability claims, increasing your premiums. “Better” Non-Trucking Liability policies have broader coverage for commonly denied scenarios like trips for maintenance, commuting between terminal and garage, and while awaiting dispatch. Consider the “Best” and broadest Non-Trucking Liability with a Unladen Liability policy. This policy provides liability coverage while the truck is being operated with an attached empty trailer, or without any trailer at all, whether dispatched or not. These policies have pricing that start as low as only $5 more per month.
To learn more about how your owner operator risk management strategies stack up against the best in the business, please complete our online risk assessment here.
Contact Ben Droessler with Cottingham & Butler’s Contractor Services Team.
Ben Droessler, CIC
Transportation, Vice President
1 The Council of Insurance Agents & Brokers (CIAB) in its second-quarter 2020 broker survey said premium increased for the 11th consecutive quarter by an average of 9.6 percent.