Insurance premiums for long-haul trucks and trucking companies have increased dramatically in the past few years, doubling from an average between $6,000 and $7,000 in the beginning of the decade to between $12,000 and $14,000 today.

There’s a paradox underlying this increase: Trucks are getting more expensive because of these high-tech features, and this in turn is causing insurance premiums for these trucks to increase. The paradox lies in the fact that these new technologies are making trucks safer, which should lead to cheaper truck insurance premiums.

According to the American Transportation Research Institute (ATRI), rising insurance costs are the largest single increases in operating costs for trucking firms. Between 2013 and 2014 they rose 11 percent before jumping another 29 percent the following year.

At the same time, equipment costs are also climbing. The average cost of a new tractor-trailer rig now ranges from $140,000 to $175,000 — at a time when a growing shortage of truck drivers is pushing up industry salaries. That rise has been driven by the new, more advanced technology being embedded into the trucks.

Computer code on PC Screen

Tech impact adds up

Is this a means of profiteering on the part of insurance carriers? Of course not. Commercial auto insurance has regularly been one of the worst-performing segments of the insurance industry, and for every $100 in commercial auto premiums collected in 2016, U.S. insurers paid out $110.40, leading to an exodus of carriers from the truck insurance business and driving up costs. But these rising premiums for trucks, simply because they cost more, don’t bring into account the improved safety technology provides.

Look at all the new developments in safety provided by LIDAR, or laser radar. By scoping out the road ahead and detecting the vehicle’s surroundings, LIDAR provides the same features and benefits that many passenger vehicles offer, such as forward collision warnings, emergency braking and lane changing assistance, among many others. It’s traditionally been too expensive for use in trucking but is now reasonably-affordable enough to be a feasible option. And when applied to trucks, LIDAR technology can see nearly 360 degrees and 1,000 feet in each direction. Considering a fully-loaded big-rig’s size and very-long stopping distance, that increased “visibility” of its surroundings could make all the difference in case of an emergency.

Perhaps the largest, even dramatic, impact that technology can have on insurance rates, however, is through better truck driver training and simulators. Accidents and loss claims are a major factor behind insurance rates, and by making trucking safer and reducing the number of accidents and claims, you can keep rates low. Advanced simulators help with that, by creating safer, more expert drivers.

Truck Driver Spain, Lorry Driver, Insurance premiums for long-haul trucks and trucking companies have increased dramatically in the past few years, doubling from an average between $6,000 and $7,000 in the beginning of the decade to between $12,000 and $14,000 today.





New breed of driver

Drivers are now trained extensively in both the classroom and behind the wheel, learning how to handle a tractor-trailer’s unique challenges. But there are certain things they can’t do in training, like manage a real tire blowout, negotiate black ice, descend mountains or avoid an oncoming collision. Attempting a situation like that for the sake of training simply carries too much liability and could be expensive were it to result in an accident, not to mention the danger to life and limb.

But trucking schools and companies can use simulators to replicate these situations. With practice and the help of a simulator, drivers can develop muscle memory for handling dangerous scenarios. And instead of a dangerous accident, a ticket or an expensive lawsuit, and the resulting larger premiums, they walk away unscathed.

Accidents due to poor training are a risk companies can’t afford to take. Thanks to the use of training simulators and the many new tools and technologies now integrated into trucks, they don’t have to. Advanced training with a simulator means safer drivers and less accidents, and insurance premiums can reflect these statistics with lower rates.

Technology isn’t the only factor impacting trucking insurance premiums, but it can have a huge impact on them. If trucking companies keep investing in the development of technology that make trucks safer, there should be a way to keep insurance costs low.

(from Property Casualty 360)

 

 

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