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Factors that Can Raise the Cost of Commercial Auto Insurance

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What Could Cause Commercial Auto Insurance to Increase in San Diego, CA

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Commercial auto insurance is an invaluable asset for any business regularly using vehicles for business-related purposes in one way or another. Surprisingly, it’s not unusual for commercial auto insurance rates to increase even if employees have good driving records. The reason is because the history of vehicle-related claims is only one of the factors that could cause commercial auto insurance rates to go up. Some others are discussed below.

Distracted Driver Incidents

According to Carinsurance.net, distracted drivers are responsible for nearly three million vehicle-related accidents each year. If you have a year when some of your drivers are involved in accidents of this nature while driving for work-related purposes, your commercial coverage rates could increase. Even if this isn’t the case for your business, some auto insurance providers may increase rates if there’s a higher statistical average of accidents of this nature nationwide.

Lack of Experienced Drivers

As the economy gets back into gear, it’s becoming increasingly difficult for businesses to find experienced drivers. For example, the American Trucking Associations estimates the commercial trucking industry alone has a deficit of approximately 50,000 drivers. Having an added influx of inexperienced drivers in certain industries means some commercial insurance providers could view this as a risk that justifies increasing rates.

Higher Accident-Related Costs

In general, costs related to accidents are going up. This may, in turn, result in an increase in commercial auto insurance rates. Health insurance premiums and medical costs across the board have been rising, which increases costs insurance providers have to absorb for drivers or passengers injured in accidents. Vehicle repair costs are also on the rise. A 2018 AAA research paper points out costs associated with fixing newer, more advanced vehicles with driver-assistance systems and other complex features can make repairs twice as costly after an accident than what’s common with vehicles without such features.

More Drivers on the Nation’s Roads

A 2019 American Driving Survey conducted by the AAA Foundation found that Americans collectively spend about 70 billion hours on the road, a nearly 10 percent increase from 2014. This increase in driving time on many well-traveled roadways and highways boosts the risk of accidents for commercial drivers, which could be another reason commercial auto insurance rates are increasing for more businesses.

Business-Specific Factors

There are some factors more specific to your business and its vehicles and drivers that could also affect your commercial auto insurance rates. These include:

• Total number of accidents among your employees
• Severity of any accidents specific to your business, including total costs involved
• How well your commercial vehicles are maintained
• Whether or not you have higher-valued commercial vehicles that could be more expensive to repair or replace

Keeping Your Insurance Rates in Check

If you have concerns about your commercial auto insurance rates, talk to your insurance agent to ask about steps you may be able to take to reduce what you’re paying for coverage. Typically, insurance providers are willing to work with commercial policyholders with generally good records when it’s possible to do so. 

If you aren’t sure whether you’re required to purchase commercial auto insurance, it’s a great idea to contact a knowledgeable insurance agent for information. The experienced agents at Altra Insurance Services can help you with a wide variety of insurance options, including motorcycle, homeowners, and commercial insurance. San Diego residents should call one of our friendly representatives today at 800-719-9972.

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