Have you wondered what is going on with your trucking insurance premiums? There are many reasons why a trucking company’s insurance premium has gone up even if you haven’t had any claims in the past three to five years. In this article, I will discuss the following five factors that are driving your cost up:
1. Your FMCSA report is unflattering based on commercial vehicle compliance stops
2. Your CAB score is low
3. Your vehicle or mobile apps are collecting information about your driving behavior and selling it upstream
4. Your DataQs information is inaccurate
5. Nuclear claims
What is a FMCSA report?
The Federal Motor Carrier Safety Administration aggregates information about your trucking company’s performance. You can look at your public information using the SAFER snapshot tool. Your public information is shared with insurance companies that feed it into rating algorithms to determine pricing. If you think you are paying too much for insurance a great first step is to see what your online profile looks like to insurance companies.
Your SAFER Snapshot is a helpful tool to identify behaviors that are causing financial leakage for your trucking firm.
What is a CAB Score?
If you follow industry news, you’ve learned how important the Central Analysis Bureau (CAB) is. Thousands of abstract data points, including information from the FMCSA, LexisNexis, and Verisk are fed into complex and proprietary algorithms that score your compliance and safety performance against actuarial data on a range from 0 to 100. If that score comes back marginal or high-risk it can lead to adverse pressure for trucking companies.
How might a negative score put negative pressure on a trucking firm? For one, an Inspection Selection System (ISS) score of 75+ might trigger increased vehicle inspections by commercial vehicle inspectors. As more negative information is collected, it can exacerbate damage and create a negative feedback loop. You may find your insurance policy canceled, insurance companies suddenly wary to do business with you, or steep rate increases at your renewal.
How Do Cell Phone Apps Monitor My Driving Behavior?
Trucking companies frequently resist installing telematics from their insurance company because of the invasion of their privacy. The insurance industry found a workaround; your cell phone.
Edmonds.com published an article a couple of days ago about how personal driving behavior is being sold to LexisNexis and Verisk from cell phone apps Life360, GasBuddy, and MyRadar. It was a follow-up to an article first published by The New York Times early this month. I’m positive this is only the tip of the information-sharing iceberg. Make no mistake; your hijacked personal information is trickling upstream into insurance companies' rating algorithms.
What is DataQs?
The FMCSA has a driver dashboard called DataQs. It allows users to create an account to track and review data related to their federal and state information. Because information is gathered on the front end by humans, errors can occur. If incorrect information is not caught, it can skew how your business is rated and viewed. Something as simple as misrepresenting the number of miles driven in a year can have swift backlash.
Identifying data errors is only the beginning. Correcting the error and having it expunged from your FMCSA report is what matters. As you can imagine, not every insurance agency has the technical ability to identify the problem or have it removed. Most often, incorrect information is undiscovered and left to rot like cancer cells.
What Are Nuclear Claims?
A nuclear claim is an award or settlement over $1 million. For the past twenty years, the trucking industry has watched nuclear claims destroy their industry. It doesn’t matter if your trucking firm has had a nuclear claim or not. Your insurance company is making you participate in those nuclear verdicts by increasing your rates. It is common for injury lawyers to play the insurance lottery with trucker’s policy limits.
That may be changing. Earlier this month, Inside Lane published a long overdue article about how the trucking industry is pushing back. It is worth the read.
Who writes your policy matters. Look for an insurance company with an assertive claim investigation unit. Ask your agent if their attorneys are easily bullied into settling frivolous lawsuits. It also helps to have an agent with a spine. Read how we recently fought to get a downtime claim paid for one of our sand and gravel haulers. It felt good to win.
Wilson Insurance’s Trucker Advocacy
As part of our agency’s customer advocacy, Wilson Insurance monitors your company’s metadata to identify factors that contribute to increased insurance costs. We correct misinformation so your premium is accurate. We monitor your FMCSA report to identify behavior that leads to financial leakage. If negative information is identified, we work with our customers to develop a plan to correct the behavior. We communicate your efforts to insurance markets that present your efforts in the best possible light.
As far as we are concerned, truckers are heroes. We think you should be treated that way.
If you are looking for a proactive, assertive agency that will work hard to earn and keep your business, I would love to talk to you. You can reach me at justin@wilsoninsuranceaz.com or 480-964-2400.
Justin Chappell
VP Business Development
Wilson Insurance