Insurance Costs Are on the Rise—Here’s Why

To understand where your insurance costs come from, you have to understand what your insurance premiums pay for. In short, the Commercial General Liability and Primary Auto Liability insurance you are required to carry primarily covers the cost of crashes and their associated legal fees. Unfortunately for fleets, both of these categories carry high, growing costs.

Crashes Are Common and Costly

The 2017 edition of the FMCSA’s Large Truck and Bus Crash Facts report found that over 450,000 large truck crashes occurred in 2017, and almost a quarter (23%) of those crashes resulted in an injury.

According to a report from the Bureau of Labor Statistics in 2016, 885 fatalities occur for every 100,000 drivers per year, making transportation one of the most dangerous industries for work-related deaths.

Additionally, the American Transportation Research Institute (ATRI) found that fatal crashes cost just short of $5 million, and non-fatal crashes with an injury average about $270,000 per incident. Summed up, these crashes are incredibly costly, which is a major contributing factor to the high price of insurance premiums you’re paying today.

Legal Fees Are Rising Because Nuclear Verdicts Are Too

The connection between the rise of Nuclear Verdicts and insurance premiums cannot be understated, because your insurance carrier needs to cover legal fees that arise from Nuclear Verdicts, the expectation of those costs results in increased premiums.

Both the number and severity of Nuclear Verdicts have increased by an astonishing amount. From 2012 to 2019, the number of cases with verdicts over $1 million increased by 335% compared to the six years prior. Since 2010, the average size of a crash-related verdict has increased by 967%

As a result of these increases, insurance costs have risen by double digits every year for the past three years, in no small part because court costs have risen by triple digits over the same time period. 

How Your Fleet Can Beat These Trends

In order to outperform industry averages, your fleet needs to take their safety and risk mitigation to a level unlike other fleets in the industry.

Driver management platforms like the Idelic Safety Suite® have helped fleets unlock enormous benefits, including a 52% reduction in crashes per driver and a 48% reduction in the average cost of claims.

Safety Suite consolidates data from all fleet third-party systems, identifies which drivers are most at-risk of a crash using AI technology, informs managers why they’re at-risk, and then recommends corrective action that meets each driver’s specific needs.

Safety Suite helps fleets reduce insurance costs by preventing crashes before they occur and reducing liability through proactive intervention. If you’d like to learn more about how your fleet can beat industry trends and reduce insurance costs, watch a 2-minute demo on Safety Suite here.