Getting a big increase in your insurance rates is incredibly frustrating - especially if you've been performing well. And although there are ways to mitigate this effect by choosing a performance-driven financing option or investing more into your safety culture, we set out to figure out exactly what is causing this increase in truck insurance rates.
This is what we found:
TRUCKS ARE GETTING IN MORE ACCIDENTS
In spite of the newest technologies and our best efforts, trucks are getting in 59% more accidents per mile than they were in 2010. Injuries from truck accidents are up 48% per mile driven, and fatalities are up 12%.
*source: FMCSA Analysis Division, 2010 compared to 2015
EACH ACCIDENT IS COSTING MORE
In a study done by HNI of over 24,000 accidents that occurred between 2010 and 2016, it was clear that the cost of an accident is on the rise. The median cost of an accident has increased 14% in the past 5 years alone.
*source: HNI study of 24,000 accidents from 2010 to 2015
ACCIDENTS ARE 2X MORE LIKELY TO EXCEED $100K
In 2010, 1.5% of all accidents incurred more than $100,000. In 2016, that number nearly doubled to 2.9%.
*source: HNI study of 24,000 accidents from 2010 to 2016
Perhaps most significantly, though, is the percentage of the total cost that these large accidents account for. Despite being just a small fraction of accident frequency, they account for approximately 75% of all incurred losses.
Big accidents are becoming increasingly penalizing.
THE EFFECT OF NUCLEAR VERDICTS
In recent years we have seen some huge settlements levied against trucking companies. Plaintiff attorneys have mastered the art of demonstrating how trucking companies are negligent and careless when it comes to safety, and how this negligence is a danger to the jurors and their families.
These nuclear verdicts have been extremely detrimental to insurance companies, as well. And as a result, many insurance companies have decided to abandon insuring the trucking industry all together (leaving fewer insurance companies to absorb the losses).