Travel to New Heights with These Auto Insurance Tips

Whether you are transporting adventure seekers to and from the river or picking up camping gear from an incredible destination, your business likely relies on your ability to own a commercial vehicle. In 2022, policyholders should prepare for the rough terrain ahead. The trek will likely involve a more difficult renewal process from increased premium rates, lowered capacity and stringent policy restrictions.

Insurance carriers have seen the commercial auto space largely unprofitable over the past decade. In fact, AM Best recently reported that despite premiums increasing for 41 consecutive quarters, commercial auto underwriters saw more than $22 billion in underwriting losses between 2011 and 2020. This poor underwriting performance can be attributed to various factors including the increasing volume of nuclear verdicts, unsafe driving habits and surging accident expenses.

Developments & Trends to Watch For In 2022

Nuclear Verdicts

An increasing concern, nuclear verdicts are jury awards in which the penalties exceed $10 million. Due to the rise in these verdicts, attorneys are more inclined to go to trial, extending litigation and significantly raising the cost to defend a claim. The recent surge in nuclear verdicts has also contributed to commercial auto insurance carriers restricting coverage offerings.

Distracted Driving Concerns

The National Highway Traffic Safety Administration (NHTSA) reports that a staggering 391,000 people are injured every year with 3,450 people killed in crashes involving distracted drivers. In addition to the loss of life, these crashes cost an estimated $46 billion each year. As these incidents have become more prevalent, commercial auto insurance costs have climbed in tandem.

Rising Accident Costs

The primary factor for surging accident costs and commercial auto claims is the growing severity of crashes. While the pandemic has influenced fewer drivers on the road, NHTSA reported the fatal crash rate has reached its highest point since 2007. Rising accident expenses can also be attributed to the severity of injuries as they often require advanced treatment plans and influence overall medical expenses. Rising auto repair costs have also influenced the surge of accident cost, as advancing vehicular technology repairs are expensive and pandemic-related auto part shortages are still prevalent.

Tips for Outfitter Insurance Buyers

Make sure you are equipped with all of the necessary tools before you start your journey to commercial auto insurance coverage. The trends listed above aren’t the only criteria considered when determining your coverage costs. As a business owner, you can implement strategies within your own organization to possibly impact your rate.

• Enhance driver safety by implementing or modifying safe driving and distracted driving policies.
• Utilize motor vehicle records (MVRs) to evaluate drivers’ experience and moving violations to ensure you employ qualified drivers. Exclude applicant drivers with an unacceptable driving record. Schedule to review drivers’ MVRs regularly.
• Implement technology solutions, such as telematics, to strengthen loss control measures. Many states have different laws regarding some vehicle technology, so be sure to check your local laws before investing.
• Communicate to your employees’ accident prevention initiatives and establish effective post-accident investigation protocols to prevent future road collisions.
• Partner with your agent to review your current policy and determine whether you should make changes to your policy.

We’re Here to Help You in 2022

Industry experts are predicting commercial auto insurance premiums will see an average increase of 10-25%. You do not have to hike this rough terrain alone. Let CBIZ Adventure Sports help you find a clearer path. Request a free quote  to get the protection you need today.

This blog may contain scenarios that are provided as examples only. In an actual claim situation, coverage is subject to the terms, conditions and exclusions of the policy issued. The information provided is general in nature and may be affected by changes in law or the interpretation of such laws. The reader is advised to contact a professional prior to taking any action based upon this information.

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