Starting a Transportation Business in LA? Factors that Affect the Cost of Trucking Insurance
Embarking on a new business venture can be daunting. And yet, here you are. Congratulations on taking the first step into becoming the boss. Now that you have your ducks in a row, it’s time to plan the next stage of becoming a business owner in the trucking industry.
Getting comprehensive insurance coverage for your fleet of trucks should be next on your list. Because of the business landscape in Los Angeles, several factors can affect your insurance premiums.
For truck insurance in Los Angeles, the key factors determining the costs are:
- Driving record
- Type of cargo
- Vehicle type and condition
- Routes
- Driver experience
Click here if you’re in the market for comprehensive trucking insurance protection.
In this article, we’ll discuss how certain factors can help businesses manage their insurance costs effectively by making informed decisions.
History of Accidents, Traffic Violations?
Trucking accidents in California have seen a significant uptake in recent years. An average of 14,074 accidents are reported annually, according to data from FMCSA.
Infinite Risk Management & Insurance Solutions says the high cost of repairs following an accident has impacted the cost of insurance and market access. It also drives insurance premiums up.
What does this signify for commercial truck owners? For starters, a clean driving record can reduce premiums to about $9,000 to $16,000 per annum. However, a single blight on your record can negatively affect insurance payments or a payout in case of an accident claim.
The Insurance Bureau of Canada recently confirmed that priority should be given to commercial truck driver training. Their report stated that the lack of training was a huge safety problem after noticing a spike in liability coverage claims.
The U.S. is also currently experiencing a truck driver shortage. To plug the leak, some companies are offering Commercial Driver’s License (CDL) training programs as an incentive to join the industry.
Will the Condition of My Trucks Affect My Premiums?
The short answer is yes. The market value of the truck will also be taken into consideration. This could increase or decrease your installments.
Older trucks normally attract higher premiums. If fleets are poorly maintained, an insurance provider could view this as a high risk and refuse cover.
On the flip side of the coin are more recent models. Brand-new trucks with their latest technology and safety features are more expensive to replace or repair. Hence the raised insurance premium.
Also, keep in mind that large semi-trucks are more expensive to insure than a pickup truck.
What About the Type of Cargo being Transported?
CargoNet reported that criminal activities targeting cargo-carrying trucks have increased 46% year-over-year. That’s a worrying statistic, considering the most spikes were observed in California (72%).
It’s a given that some types of cargo are riskier to transport than others, resulting in a higher cost coverage. Road cargo insurance is critical for land-based transit, considering the risks encountered while on the road.
Coverage usually includes damage or loss due to accidents, thefts, or environmental conditions impacting the cargo.
Other factors affecting trucking insurance are claims history, security measures, regulatory compliance and business size.
Types of Trucking Insurance
There are several types of insurance coverage for commercial trucking operators. These are:
Motor Truck Cargo
This insurance protects you from being legally responsible for damage to merchandise that you're transporting. It covers losses incurred while the items are in your care during transit.
General Liability
General liability covers incidents beyond trucking, like slip-and-fall accidents at your business premises. Claims for bodily injury, property damage, and personal injury sustained during business operations are included.
Bobtail Coverage
Like non-trucking liability insurance, bobtail insurance specifically covers the truck when it's driven without a trailer.
Trailer Interchange
This insurance covers damage to trailers not owned by the insured but under their care during a trailer interchange agreement.
Non-Trucking Liability
This coverage applies during personal use of the truck or when driving without a trailer attached.
Physical Damage
Also known as collision and comprehensive insurance. Physical damage coverage protects the insured truck from damages caused by accidents, vandalism, theft, fire, or natural disasters.
Primary Liability
A very important and legal requirement for commercial trucks. Primary liability insurance covers damages and injuries to third parties if the insured truck is responsible for an accident.
Money-Saving Hacks
An insurance broker or agent will try their utmost to get the most comprehensive insurance at the lowest price. Even better if they can execute this without compromising on coverage. If you don’t have a broker at your disposal, shop around and compare rates.
By lowering your risk profile, insurers are more likely to lower your premiums. Achievable ways of doing this are improving safety measures and increasing driver training.
Implementing these measures lets your insurance company know you’re a safe bet.
