{"id":4458,"date":"2020-02-24T16:10:52","date_gmt":"2020-02-24T15:10:52","guid":{"rendered":"http:\/\/en.advancedfleetmanagementconsulting.com\/?p=4458"},"modified":"2020-02-24T16:10:52","modified_gmt":"2020-02-24T15:10:52","slug":"get-a-grip-on-fleet-insurance-costs","status":"publish","type":"post","link":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/2020\/02\/24\/get-a-grip-on-fleet-insurance-costs\/","title":{"rendered":"Get A Grip on Fleet Insurance Costs"},"content":{"rendered":"

Get A Grip on Fleet Insurance Costs<\/strong><\/h3>\n

The high cost of insurance is largely the responsibility of the insured \u2014 that means looking at the impact of everything from proper truck maintenance to how safely drivers operate on the road<\/p>\n

Figuring out how to lower fleet insurance costs is not rocket science. What it take is Business Administration 101: putting to work critical and analytical thinking to identify what\u2019s driving up insurance costs and what actions will help bring them under control.<\/p>\n

Even the Federal Motor Carrier Safety Administration preaches that \u201csafety is good for your business.\u201d According to the agency, the average cost of a \u201clarge truck\u201d crash involving a fatality is $3.6 million. A crash with injuries costs almost $200,000 per crash, and the average cost of all large truck crashes is about $91,000 per crash.<\/p>\n

According to Mitchell Keiper, business analyst at HNI Risk Advisors, a study by HNI of more than 24,000 accidents that occurred between 2010 and 2016 makes it clear the cost of a truck accident is on the rise.<\/p>\n

\u201cIn 2010, 1.5% of all accidents incurred more than $100,000,\u201d he advises in a blog post. \u201cIn 2016, that number nearly doubled to 2.9%.\u201d More significant is that despite being a small fraction of accident frequency, these large accidents account for approximately 75% of all incurred losses.<\/p>\n

He also points out that \u201cbig accidents are becoming increasingly penalizing.\u201d That trend is being driven by so-called nuclear verdicts, in which juries award tens of millions to hundreds of millions of dollars to the families of crash victims.<\/p>\n

\u201cPlaintiff 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,\u201d Keiper says. \u201cThese nuclear verdicts have been extremely detrimental to insurance companies as well,\u201d leading many to exit the trucking space all together. The upshot is there are fewer insurance companies to absorb those large losses \u2013 so premiums rise for all.<\/p>\n

Even though there are fewer insurance providers to pick from, Dave Lubeck, business development consultant for Progressive Insurance, recommends seeking out an agent and\/or insurance carrier with \u201cexperience with your type of business. Your business may require a combination of commercial auto and business insurance coverages, and an experienced agent or carrier can help assess your business and tailor a policy specific to your needs.<\/p>\n

\u201cThe amount and type of coverage needed is based on preference and the type of business you\u2019re in,\u201d he adds. \u201cNot all insurance packages will fit your needs, and value doesn\u2019t always mean savings. Consider all the factors, like coverage customization, customer service, and discounts.\u201d<\/p>\n

Keep the enemy in sight<\/strong><\/h5>\n

But you can\u2019t rely only on your insurance provider to solve your problems. Nor can you shrug off the high cost of insurance on litigious ambulance-chasers. Walt Kelly\u2019s cartoon character Pogo said it best: \u201cWe have met the enemy, and he is us.\u201d<\/p>\n

Let\u2019s face it, when it comes to the high cost of insurance, it\u2019s largely the insured who are responsible. That covers everything from proper truck maintenance to how safely drivers operate on the road. What matters most is how fleet managers help ensure their trucks are as safely spec\u2019ed and maintained as possible and that the safest drivers possible are behind the wheel.<\/p>\n

Conducting an internal safety audit or risk-management analysis is a critical first step to doing your part to rein in insurance costs. You\u2019ve got to know what\u2019s costing you what before you can start focusing your efforts on cost control.<\/p>\n

One way to do that is by properly wielding data on your fleet operation\u2019s safety profile. \u201cInsurance companies make decisions on premium costs based on claim histories \u2014 the record of events that indicates whether a commercial vehicle operator is a good risk,\u201d according to Teletrac Navman, a provider of\u00a0 GPS-based truck tracking software.<\/p>\n

The company says driver scorecards, based on telematics data collected by fleets, can provide the information needed to reward good performance, discover areas for improvement, and develop training that supports safety. This process ultimately can help reduce insurance premiums as well as other operating costs. In addition to creating a safer working environment for drivers, taking these steps can bring not only reduced insurance premiums, but also benefits such as lower fuel spend and extended vehicle life.<\/p>\n

Dashboard cameras provide video documentation of what happens when a motor vehicle is in use, Teletrac Navman notes. \u201cTruck and fleet cameras can record driver performance, traffic conditions, aggressive driving or moving violations, or the cause behind a collision or other incident. That video data is objective, and following an accident it can serve as reliable evidence in a dispute regarding which party was at fault. This makes it valuable in protecting fleets against expensive legal action \u2013 both in proving that negligence was not involved, and in expediting a rapid settlement instead of prolonged, costly litigation.\u201d<\/p>\n

\"\u201cUsage
\n

\u201cUsage Based Insurance\u201d is the new buzzword in the insurance business. UBI is a method by which mileage and driving behaviors are tracked using odometer readings or in-vehicle telematics devices. National Association of Insurance Commissioners says this enables monitoring a driver\u2019s behavior directly while the person drives.<\/p>\n<\/figcaption><\/figure>\n

A new insurance buzzword<\/strong><\/h5>\n

According to Mark Walton, co-founder and CEO of Gorilla Safety, a fleet and safety management software provider, Usage Based Insurance is the new buzzword in the insurance business. UBI is a method by which mileage and driving behaviors are tracked using odometer readings or in-vehicle telematics devices, says the National Association of Insurance Commissioners.<\/p>\n

\u201cThe basic idea is that a driver\u2019s behavior is monitored directly while the person drives,\u201d explains NAIC. \u201cThese telematics devices measure a number of elements of interest to underwriters: miles driven; time of day; where the vehicle is driven (GPS); rapid acceleration; hard braking; hard cornering; and air bag deployment. The level of data collected generally reflects the telematics technology employed and the policyholders\u2019 willingness to share data. The insurance company then assesses the data and charges insurance premiums accordingly.\u201d<\/p>\n

Walton points out that, \u201cthroughout the underwriting process, there are chances for fleets to sell themselves to the insurance carrier. With the advent of fleet technology solutions, clarity and intelligence are perhaps among the most important differentiators used to distinguish any company from its peers and secure better pricing. Modern [telematics] technology now makes it easier than ever to track, manage, and leverage fleet capabilities, ensuring stability and continuity of best practices.\u201d<\/p>\n

He says telematics allows fleets to more easily manage and measure for better loss control and risk management. \u201cWith GPS and tracking, we now know which driver took which load where. There is also the ability to see exactly how many hours the driver operated the vehicles, and that information can be used to segment the risk profiles of any given fleet\u201d by insurance carriers. And, Walton adds, fleets can \u201cleverage the intelligence gleaned from using technology into both greater credits and lower overall claims that hopefully result in lower premiums over the long term.\u201d<\/p>\n

\u201cProgressive is very excited about the use of telematics data,\u201d says Dave Lubeck. \u201cBy leveraging our learnings about driving behavior from our Personal Lines organization and Smart Haul [Progressive\u2019s new ELD-based UBI program for truck drivers], we see a lot of opportunity to understand more about commercial vehicle usage for underwriting applications and for fleet management.\u201d<\/p>\n

by David Cullen<\/a><\/p>\n

Source: https:\/\/www.truckinginfo.com<\/a><\/p>\n

FLEET MANAGEMENT AUDIT<\/h3>\n

Fleet management is the use of a set of vehicles in order to provide services to a third-party, or to perform a task for our organization, in the most efficient and productive manner with a determined level of service and cost.<\/p>\n

Fleet management activities are shown in the following graph 1:<\/p>\n

\"fleet<\/p>\n

Graph 1: fleet management activities<\/p>\n

The proposal audit analyses and assesses all fleet management activities shown in the graph 1, and its main goals are:<\/p>\n