Commercial trucking insurance protects drivers, vehicles, and cargo, even when the business’s needs change. Many business owners set up their insurance plans and never review them again, but businesses almost always change over time. Accidents can expose coverage gaps that cost the business its revenue, vehicles, and even its operating license. Commercial trucking business owners need to know the right time to update their fleet’s insurance plan, not only to extend coverage but also to prevent unneeded expenses.
With numerous regulations and workflow changes occurring daily, many commercial trucking businesses rely on local insurance experts to clarify their requirements and update their insurance plans for compliance. This article details this process to help trucking company owners avoid costly coverage gaps, reduce insurance costs, and remain compliant throughout industry changes.
Fleet Growth or Downsizing
A change in the size of a business’s fleet is the best time to update commercial trucking insurance plans. The coverage the business requires is proportional to the number of vehicles it needs to protect. Consequently, businesses encounter two risks to their insurance ROI depending on their fleet size. If they operate a fleet with insufficient coverage, there may be dangerous coverage gaps. On the other hand, paying to insure more vehicles than they use results in unnecessarily high premiums.
When new vehicles or drivers are onboarded, the insurance company should be notified. When several vehicles are removed from the fleet, the policy should be similarly adjusted. In this way, business owners can work with their providers to match the coverage to their current needs rather than relying on outdated premium assessments. In many cases, a growing trucking business can use this opportunity to switch from per-vehicle insurance coverage to a commercial fleet policy, bundling coverage to save money and reduce administrative expenses.
Workflow Changes
When a trucking business changes its workflow, it’s always a good idea to reassess how this may affect its coverage requirements. For example, adding new or heavier vehicles to the fleet may require higher liability limits. Likewise, a new cargo type can also increase the business’s risk exposure, which may result in changes to its FMCSA cargo insurance minimums based on the hazard level or value of the new cargo type.
This is not only true for businesses switching from freight to hazardous chemical transport. For example, transporting people carries its own minimum liability requirements as well. Time-sensitive cargo, such as medicine, is also covered differently.
Even a new route can have lasting implications for the business’s trucking insurance requirements, especially if the route is longer than previous ones, passes through areas with higher accident rates (such as large cities), or crosses a state border. Even something as seemingly simple as changing a route to include a mountain pass can impact insurance requirements if the route has a high accident rate.
Significantly changing a route, vehicle weight class, or cargo type without notifying the insurance provider can result in severe penalties, including fees, claim reductions and denials, or even the loss of operating licenses.
Regulatory Changes
Commercial trucking regulations can change frequently, increasing or decreasing a business’s insurance requirements, enforcing new safety mandates, or introducing new environmental standards.
For example, the FMCSA is phasing out traditional MC number identifiers and replacing them with USDOT numbers under the URS or Unified Registration System. This means that insurance policies and endorsements must now list trucks by their USDOT numbers and match these numbers to the corresponding liability filings. Non-compliance can result in claim reductions or denials, which can cost a business millions following a severe accident involving their vehicles.
These changes can significantly impact a commercial trucking business’s insurance profile, including its compliance requirements. Local insurance experts will be aware of how recent regulatory changes affect businesses in their state. This is why businesses should periodically check in with local insurers, review new regulations, and adjust their insurance plans accordingly.
Safety Violations
Just as a new route or cargo type changes a business’s risk exposure, new safety violations, claims, or accidents can influence a business’s perceived risk level to its insurer. Additionally, new DOT infractions or incidents involving property damage or cargo loss can change how deductibles, premiums, and benefits are calculated.
To offset these changes, businesses can demonstrate their devotion to mitigating risks by upgrading the safety workflows within their organizations, such as by installing telematics systems, rolling out new safety training programs, or making vehicle safety updates.
Renewal Period
Many businesses locked into an old policy haven’t renegotiated their rates, shopped other providers, or reassessed their endorsements for years. Insurance providers often revise their policy language and pricing models every year, so when a business owner enters their business’s policy renewal period, they should use the opportunity to update their coverage.
Business owners need to know that auto-renewal is not a requirement, though it may save administrative time and labor. Auto-renewal is a convenience, but it is also a risk that denies businesses the chance to shop their needs between providers, review new policy language, and make sure the policy covers the fleet’s current needs.
Update your Trucking Insurance Policies with Experienced Local Advisors
Commercial trucking insurance policies should adapt to regulatory changes, fleet growth, route changes, new safety violations, and more. At Pro Insurance Group, our team helps commercial trucking businesses update their insurance plans to reflect these and other changes to make sure you never overpay for the policies you need.
Contact our team today to learn about local and federal commercial trucking insurance requirements and how your business’s policy should adapt to prevent costly coverage gaps and overpayments.