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The most popular technology was road-facing cameras, which ATRI called “a strategic tool for insurers, carriers and drivers as they provide irrefutable safety documentation, thus lowering claims and defense costs.”Īccording to the Insurance Institute for Highway Safety (IIHS), drivers of large trucks can help prevent crashes through the use of safety technologies, including blind-spot detection, forward-collision warning/mitigation, electronic stability control and lane-departure warning.
Want more news? Listen to today's daily briefing above or go here for more infoĪ trend within the last three years among 92% of carriers surveyed was adoption of safety technology.
“This comprehensive approach enables carriers to organize costs more effectively for the long-term by emphasizing the impacts that all cost centers have on safety and the relationships between them,” the report stated. Instead, ATRI advised motor carriers to look beyond insurance costs and consider all safety-related matters, indirect costs and expenses - including driver hiring and training, safety technology investments and litigation liability - in assessing their total cost of risk.
However, ATRI warned that these spending cuts can increase the total cost of risk and result in negative long-term consequences - such as increased crashes, worsening driver shortages or lower productivity. To offset rising insurance costs, the report said carriers sometimes cut operating costs by reducing wages, bonuses, equipment purchases and maintenance costs, as well as restructuring insurance policies. In fact, lawsuit-related factors - rather than truck crashes - had a statistically significant impact on payment amounts, especially in highly litigious states such as California, Michigan, New Jersey and North Carolina, where the average lawsuit payment was 50% higher than the national average. ATRI’s study corroborates the Triple-I’s research on rising insurance costs and social inflation - that increased litigation and other factors dramatically raise insurers’ claim payouts.”ĪTRI said litigation payouts averaged between $406,386 and $449,792 for small verdicts and settlements in the trucking industry. “The higher premiums ultimately tend to be passed along to consumers in the form of higher prices for goods and services. “External factors that go well beyond carrier safety force commercial trucking insurance costs to increase, which then requires carriers to redesign their business strategies,” said Dale Porfilio, chief insurance officer of the Insurance Information Institute. The report noted that the financial impact litigation can have on insurance companies is passed along to motor carriers. ATRI found that loss ratios were higher in states with more truck registrations being more prone to litigation, such as Texas.įOR IMMEDIATE RELEASE FROM ATRI: New #ATRI Research Evaluates Motor Carrier Strategies for Responding to Rising #Insurance Costs #TruckingResearch #Trucking- ATRI February 17, 2022 Rate increases also were tied to economic conditions in the insurance industry, such as a 50% jump from 2015 to 2019 in incurred losses for insurers of commercial vehicles. The Southeast region of the country reported the largest increase compared to other areas. And 18.3% of carriers - mainly from large and very large fleets - saw their premiums soar 50% despite no increase in their coverage.Ĭarriers operating in the Northeast paid the highest insurance premiums, while those in the Midwest paid the lowest. “Even though very large fleets have the lowest premium cost per mile, this large percent increase poses significant challenges for operational planning.”īetween 20, 90% of carriers saw their premiums increase even though only 12.5% had increased their insurance coverage during that time. “The largest percent increase in premium costs per mile was seen in very large fleets,” the report stated. Small fleets, those with one to 20 trucks, had premiums two times higher per mile than large fleets (101 to 1,000 trucks), which paid almost twice as much per mile as very large fleets with over 1,000 trucks.
ATRI surveyed 82 motor carriers that collectively operate 94,555 truck tractors, straight trucks and specialty trucks.ĪTRI Rising Insurance Costs. During the last decade, per-mile insurance premium costs jumped 47%, from 59 cents to 87 cents, the report noted.