Insurance Company Rates Drive Across All Lanes with Trucking Industry

The American Transportation Research Institute reported that insurance premiums for trucking companies increased on average from 0.059 cents per mile to 0.087 cents per mile as of 2020. Considering the overall increase in miles covered, the increase of three-tenths of a cent per mile has really added up. Even with safer driving conditions, new technology to manage the supply chain, automated vehicles, and more, insurance companies seem determined to raise rates for the trucking industry with few alternatives.

Nuclear Verdicts and Trucking Insurance

For many years now, so-called “nuclear verdicts” have been one of the major driving forces behind rising insurance premiums for the trucking industry. Nuclear verdicts occur when there is a traffic accident involving a truck and the judge rules against the trucker and the carrier company, levying penalties in excess of $10 million. Last year, information came to light that a lot of traffic accidents were not the fault of truckers, but were caused by “distracted driving” on the part of drivers in cars and other personal vehicles. “Distracted driving” is defined as talking on the phone while driving, driving and texting, or doing any other activity that would prevent drivers from paying full attention to the road and their surroundings. Regardless of new laws against distracted driving, nuclear verdicts against trucking companies have not stopped, and insurance companies are continuing to raise premiums because the trucking industry is considered a risk.

Lower Traffic Congestion

Starting in 2020, traffic congestion has been much lower compared to previous years. With most people working from home during the COVID-19 pandemic, there were fewer personal vehicles on the road. This made driving conditions much safer for truckers, and the number of accidents plummeted. Still, insurance companies raised rates, attributing the hike to economic adjustments, or the burden placed on drivers to keep supply lines moving. While e-commerce, orders to grocery stores, and supplies to healthcare facilities did reach new highs during the pandemic, there were fewer accidents, so there was a disconnect as to why insurance rates rose for the trucking industry.

The Rise of Technology

Blockchain technology, logistics, ELDs, and even automated vehicles are designed to keep truckers safe and reduce accidents by monitoring vehicles for faulty parts, excessive speed, road conditions, and more. Automated vehicles still need drivers to navigate on a granular level, but are supposed to be able to manage major highways without a problem. In theory, all of this new technology should lead to safer driving conditions. Yet even with safer technology, insurance companies have been pivoting, saying that they only have data from human drivers to go on, and technology has not proven itself to be safer, despite reports from carriers that use automated vehicles. This is the reasoning that insurance companies have been using to justify further hikes in premiums for the trucking industry. So if insurance companies are intent on not picking a lane and finding every reason to raise premium rates, what are large carriers, small trucking companies, owner-operators, and the trucking industry at large supposed to do?

Affordable Insurance Programs for the Trucking Industry

The upfront cost of insurance can be very steep, especially for new and small trucking companies. At Single Point Capital, we believe trucking companies should not have to experience a strain on finances just to get the insurance they need to run operations. For these reasons and more, we offer a deferred down payment program to trucking companies that have enrolled in our freight bill factoring services. Single Point Capital will defer up to 50% of the initial down payment for insurance in three easy steps:

  • We will work with your insurance carrier to confirm your plan and the initial down payment

  • Single Point Capital will pay up to 50% of the initial cash outlay

  • The balance we cover is repaid over a period of 6-10 weeks from a small percentage of the invoices you factor with us

Our flexible down payment program allows trucking companies to get the insurance they need without the steep upfront costs, so they can get up and running without placing a strain on cash flow. To learn more, contact Single Point Capital today.