Navigating the road to affordable insurance rates for your trucking business isn’t always smooth sailing. There are plenty of factors that impact your premiums—some within your control, others dictated by geography and commodities. But don’t fret! We’ve broken down the seven most important steps you can take to ensure you’re getting the best insurance rates possible while staying compliant and protecting your business.
1. Focus on Your Out-of-Service (OOS) and ISS Scores
Insurance carriers are laser-focused on your Out-of-Service (OOS) and Inspection Selection System (ISS) scores. These scores reflect your safety performance and are crucial in determining your eligibility for insurance and the rates you’ll pay.
So, how do you keep those scores low? It starts with safety and compliance programs:
- Implement robust driver training programs to ensure your drivers know the latest regulations.
- Schedule routine fleet maintenance to prevent vehicle breakdowns and avoid costly safety violations.
- Develop a recurring education system for your team to stay updated on compliance requirements.
For expert help on safety and compliance, check out Synergy Solutions. Their innovative programs are designed to help fleets achieve better safety ratings and reduce insurance costs.
2. Understand the Impact of Your State
The state your trucking business operates in can drastically affect your insurance premiums. States like Florida, Louisiana, New Jersey, and New York tend to have higher rates due to increased risks, litigation concerns, and other factors. On the flip side, heartland states like Nebraska, Kansas, and Montana often boast lower rates.
While it might be tempting to register your business in a lower-cost state, think twice. Filing your LLC and DOT in a state where your truck isn’t domiciled can be a costly mistake. Misrepresenting your garaging address could lead to denied claims in the event of a major accident. Remember: always register your policy in the state where your truck is primarily based.
3. Hire Experienced Drivers
Drivers with less than two years of CDL-A experience can hurt your eligibility for competitive insurance rates. Carriers are more likely to offer favorable terms to businesses with experienced drivers who have proven track records.
To attract seasoned drivers, offer:
- Incentives for safe driving records
- Ongoing training programs to keep them engaged and skilled
- A culture that prioritizes driver safety and support
Pro tip: Experienced drivers don’t just help you get better insurance rates; they also lower your OOS and ISS scores over time, creating a win-win scenario!
4. Know Your Commodities
The type of freight you haul plays a big role in determining your premium. Some commodities are riskier than others, and insurers price policies accordingly. Here’s a quick breakdown:
- High-risk commodities: Logging, livestock, and mobile homes are among the hardest to insure due to their higher risk profiles.
- Moderate-risk commodities: Reefer trailers typically come with higher premiums than dry vans because they involve more potential liability (e.g., spoilage claims).
- Low-risk commodities: General dry goods tend to attract the lowest rates.
When possible, consider diversifying into lower-risk commodities to help keep your premiums manageable.
5. Be Honest About Your Policy Details
One of the most common (and costly) mistakes trucking businesses make is misrepresenting key details on their insurance policies. For example:
- Listing your garaging address in a state where your truck doesn’t operate.
- Failing to disclose multi-state operations for fleets.
While these shortcuts might save you money upfront, they can backfire in a big way if a claim arises. Insurance carriers can deny claims due to material misrepresentation, leaving you on the hook for millions in damages. Play it safe and always be upfront about your business’s operations.
6. Limit the Number of Brokers You Work With
Selecting the right insurance broker is critical—and believe it or not, working with too many brokers can actually hurt your chances of securing a great rate. Here’s why:
When you approach multiple brokers, they often submit your application to the same insurance carriers. This practice, known as market blocking, can limit your leverage. Once a carrier receives a submission from one broker, they won’t accept it from another.
To avoid this, stick to one or two trusted brokers who specialize in trucking insurance. A specialized broker, like the team at Strong Insurance, will have access to a wider range of carriers and the expertise needed to negotiate better rates on your behalf.
7. Leverage Broker Relationships for Competitive Rates
Beyond limiting your broker selection, choose brokers with strong relationships with top-tier carriers like Northland, Canal, and Berkshire. These carriers often offer better rates through brokers they trust.
Additionally, avoid relying solely on direct-to-consumer carriers like Progressive or Geico if you’re a growing fleet. If you do choose to go with Progressive or Geico it is best to reach them through an agent that is specialized in trucking insurance. While these carriers are great for single-truck operations, they may not provide the flexibility or coverage options you’ll need as your business expands.
Final Thoughts
Getting the best insurance rates for your trucking business takes a little effort, but it’s well worth it in the long run. By improving your safety scores, hiring experienced drivers, and working with the right broker, you’ll not only lower your premiums but also strengthen the foundation of your business.
Looking for expert guidance on safety and compliance? Head over to Synergy Solutions to explore their industry-leading programs.
And don’t forget: Stick with one or two brokers, stay honest about your operations, and always prioritize safety—it’s your ticket to lower rates and greater peace of mind.
Trucking Cargo Insurance Explained! Don't Haul Without It! Video Inside!
