Fleet Safety

Why Are Fleet Insurance Costs Rising?

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If you’ve been running a fleet for a few years, you’ve likely noticed that insurance costs are rising. Of course, this is a frustrating problem for fleets, as insurance is a massive cost for a fleet business regardless of industry or size You’re likely wondering: why do my insurance costs keep going up? Let’s explore why and what you can do to combat rising insurance costs. 

5 Reasons Fleet Insurance Costs are Going Up

Unfortunately, the problem doesn’t appear to be going away anytime soon. Before we dive into why, know there is light at the end of the tunnel. We will get into some positives by the end of this article. First, let’s dive into the problem. 

No. 1: Auto Repair Costs. As a fleet manager or owner, the rising auto repair costs have likely not escaped your knowledge. Particularly since the pandemic, the cost of parts and labor have increased significantly, making it much harder for businesses on the brink to perform even their routine maintenance. Insurance companies pay more for repairs, and pass that cost down to the customer. 

No. 2: Legal Challenges. There has been a trend in auto-related cases in which juries have been trending towards more extensive judgments. That means more lawyers will take chances and go to court on these cases. Insurance companies have money to pay even if their client wins their case in court, and again, they pass that cost down to everyone. 

No. 3: Drivers with Less Experience. The driver shortage drags on and on, and the pandemic has only worsened the problem. As a result, fleets are hiring drivers anywhere they can. This has sometimes resulted in hiring drivers with little to no experience. Furthermore, the driver shortage has also increased the demand for experienced drivers, meaning they work longer hours and become exhausted. This increases accidents, which drives up costs for everyone. 

No. 4: Fatal Traffic Accidents. Fatal traffic accidents spiked in 2020, despite fewer vehicles on the road. Although we seem to be on a slow downward trend now, the spike’s effect on insurance providers was not negligible. Fatal accidents cost insurance providers lots of money, which means higher premiums for everyone. 

No. 5: More Speeding. One of the reasons fatal traffic accidents spiked in 2020 was because speeding was on the rise– and still is. You’ve likely seen it with your own eyes on the roads. Speeding accidents are often some of the worst accidents, and the most expensive. That’s why insurance providers are charging more before they happen. 

What Can We Do About Rising Insurance Costs?

We did say there was a bright side! When looking for savings on insurance premiums, it’s all about gathering data to prove that you’re running a safe and responsible fleet. We have several blog articles that detail exactly how you can accomplish this. Check out these articles for more information: 

The information in these blog articles can help you obtain insurance discounts from the right provider. Of course, you’ll need accurate data first, and that’s where Azuga can help. Talk to an expert today about how we can help you obtain discounts on your insurance premiums by creating a safer fleet.