Despite the fact that insurance is a highly competitive industry, premiums always seem to be going up. There are good reasons for that, which are not down to greed or bloated profit margins.
Insurance Claims Across The Board Are Getting Bigger And More Costly
While we may not feel a great deal of sympathy for the insurance industry, we cannot ignore the hard fact that payouts are costing them more – therefore premiums are rising to compensate.
Rising premiums are nothing new but now additional restrictive factors are coming into play widely. Things like these:
· Several insurers have quit the market or gone bust (e.g. Gefion)
· Insurers are declining to cover certain risks
· A lot of insurers are reducing the scope of their cover to eliminate more and more risks
· External non-risk factors, such as regulatory requirements to maintain high liquidity levels, represent a cost to insurers that is inevitably passed on to customers
All of that indicates that the market is contracting and withdrawing from risks that are now no longer potentially profitable. Where costs are rising, premiums invariably follow – and show no signs of stabilising.
What Are The Root Causes Of This Pressure On The Insurance Industry?
Certain trends have been apparent for some time, and not just in the UK.
· General insurance is being hit by things like more storm and flood damage due to climate changes
· Reinsurance is becoming more expensive – insurers buy this to cover themselves
· Truck and cars are more sophisticated, making repairs more expensive
That is just a small slice of what is driving up costs across the board. Not all of those elements impact directly on the haulage industry but premiums are rising across all sectors and risk types, not just specific risks such as domestic flood insurance, for example.
What Specifically Is Driving Up HGV Driver Insurance Premiums?
Here are some of the main culprits for road haulage rate increases:
Inner-city RTAs – Cyclists and pedestrians are a constant hazard, and the new Rules Of The Road that came into effect recently may only increase the risks for drivers. RTAs that involve personal injury are far more likely to result in high payouts for underwriters.
Theft from vehicles – On the rise, and feeding into rising insurance costs.
3 ways to reduce your HGV driver insurance premiums
Getting your HGV driver insurance premiums lower takes a bit of effort across several fronts. Each activity slices just a little of your risks and the sum should bring a noticeable cost reduction.
Assess all potential risks, from driver capability to anti-theft security steps
Consider installing dashcams and telematics
Train drivers to higher skill levels
There are other steps that can be introduced too such as how to respond efficiently after an incident. The end result should be a more professional approach that will impress insurers that your company has a realistic approach to risk detection and management.
The price of cover depends on the insurer, the level of cover, and how risky you’re perceived to be. The formula is simple: less risk = lower premiums.
The cost of insurance always depends on these things:
The level of cover required
How much risk do you present to underwriters
The nature of your business (e.g. waste, hazmat’s)
Accident history
Driver profile (young or mature)
The different criteria used by each company to assess the risk
Thoroughly Review The Level Of Cover
While ‘Goods In Transit’ cover is a necessity, having options such as ‘Business Legal Expenses’ cover is probably worth thinking twice about if you are really trying to pare costs to the bone. Extras like that certainly add peace of mind but are not triggered very often.
It pays to consult a broker or valuation expert so as to avoid the risk of underinsuring.
Install Dashcams
Insurers are beginning to look favourably on dashcams as a means of clearly identifying other drivers being at fault for incidents. This infamous dashcam recording of irresponsible and repeated sudden braking by a motorist on the M8 near Glasgow illustrates how useful such footage can be. Not all insurers will reduce premiums if dashcams are fitted but the number that does so is growing.
Use Your Insurance Broker To The Max
While direct advertisers and comparison sites will always be popular, many hauliers depend on their brokers to find the best insurance deal. Haulage insurance specialist brokers deal with a panel of insurers who offer HGV insurance and they fully understand the ins and outs of the industry. There are also underwriters that you will never have heard of and who do not advertise or appear on comparison sites. Only a good broker will know of them, and also know whether or not they would be interested in your business.
Expert knowledge can save you money by highlighting ways you can reduce premiums. Every insurer has different underwriting criteria and established brokers are best placed to know which insurer(s) may be a good match for your particular operations profile and requirements.
It’s well worthwhile building a relationship with a good broker. Just like any critical supplier, maintaining regular contact may mean that you get valuable tips that shave a few points off costs at renewal time.
The British Insurers Brokers Association (BIBA) counts about 1800 regulated firms in its membership. Website: https://insurance.biba.org.uk/find-insurance
Search for ‘Hauliers’ or ‘Young haulage drivers’ depending on your needs. You can search within your postcode area or nationwide. Alternatively, search Google for ‘HGV insurance brokers’.
Look At Your Risk Profile And Manage It
Your claims history may indicate areas to look at more closely if a pattern emerges. Some drivers may have had more accidents or incidents. If so, a course in defensive driving is certainly worth considering. Many insurers take such training into account when calculating premiums. Either way, if it results in fewer claims then that should be reflected in reduced premiums in years to come.
Actively Check Your Drivers’ Licenses
A TM may be unaware that a driver has accrued points on his license while driving his private car (non HGV). Human nature is that employees will not own up to something that has no direct bearing on their wages but which could impact the company’s driver insurance costs. A pattern of minor motoring offenses may be indicative of bad driving habits or needless risk-taking that could crossover into the day job driving your HGVs.
Fighting Rising HGV Driver Insurance Premiums Is A Constant Battle
Once you make it part of your business as usual processes, monitoring and managing relevant risks becomes second nature. All employees have a part to play and it should be an accepted element of your company’s mindset.
About AVAIL – your driver solution
At AVAIL, we’re not a traditional agency, but a driver solution that matches HGV drivers with Operators for a set low fee of £7.50 per driver per day all through the AVAIL platform. Our online platform uses specially designed software that can be used anywhere at any time, the platform has just over 17,000 HGV drivers who’ve had their licenses checked and are insured for up to £10,000 negligence in the event of any damage to the vehicle.
To find out more or book in for a demo, then click here availlogistics.co.uk/operatorhub
