Due to factors such as historic economic inflation and increasing nuclear verdicts, insurance rates are on the rise. According to the American Transportation Research Institute, per-mile premiums for carriers have increased by almost 50% over the last decade. Those expenses could become even greater in 2024—unless fleets take proactive measures.
The continued adoption of safety tech, including advanced driver-assistance systems (ADAS), dashcams, and telematics, can help businesses prevent or lessen the severity of collisions, as well as improve overall fuel efficiency, and reduce component wear and tear—by discouraging harsh braking and accelerating, for example. These benefits lead not only to reduced maintenance and repair costs but also lower insurance premiums. Some insurance companies, such as Northland Insurance, have programs that include additional savings for carriers that use telematics.
Read more: Northland Insurance introduces risk management tools to mitigate crashes, theft
Now that telematics data allows carriers to share data across their network, many fleets are incorporating that data into their safety programs. This data allows fleets to recognize what mistakes drivers are making and coach them individually. Donato Monaco, president of Northland Insurance, noted he found rewarding good drivers to be the most effective strategy for improving safety, rather than merely reprimanding drivers who need improvement.
Telematics devices such as cameras can also prevent pricey litigation by exonerating truck drivers. As more trucks on the road become equipped with camera technology, there is a possibility that nuclear verdicts could become less commonplace, though multimillion-dollar settlements for at-fault carriers could still affect premiums industry-wide.
Reward vs. risk
However, as trucks become smarter through aftermarket devices and telematics installed during manufacturing, cyberattacks become a greater risk. Additionally, the number of criminals exploiting cybersecurity vulnerabilities in brokerage operations has increased by up to 400%, according to Ron Green, vice president of business development at supply chain security company Overhaul.
When shopping for insurance, carriers can look for providers who will aid them in establishing good cyber security and cyber hygiene practices.
“Good insurance helps you test and prevent,” Monaco said.
The number of cargo theft incidents continued to rise in 2023 and show no signs of slowing, experts from theft prevention network CargoNet said. According to the company’s latest data, truck cargo theft for the third quarter of 2023 increased 59% year-over-year after comparable increases in quarters one and two.
Insurance with value-added services for cargo theft should be considered, Monaco said, in light of these trends.
