How Schools are Impacted by Continued Commercial Auto Increases
The 2018 Q4 report from The Council of Insurance Agents & Brokers (CIAB) notes that commercial auto insurance premiums have seen the 30th consecutive quarter of rate increases. The average increase of 7.0 percent comes following an equal increase of 7.0 percent in Q3. Commercial auto underwriting has been continually characterized as “restrictive,” with all regions having carriers push for increased premiums.
Some of the factors contributing to the industry-wide rate increases include:
- Distracted driving due to technology enhancements.
- A higher volume of cars on the road.
- More inexperienced drivers being hired due to a tightened labor market.
- Deteriorating road maintenance and quality.
- Increasing repair costs and higher value of modern vehicles.
- Third-party litigation funding.
Recently, there have been some national headlines regarding tragic accidents involving school buses. In some of these cases, including one Tennessee accident, the school districts were considered liable in the accidents due to negligence in hiring, training or investigation of bus drivers. In this example, the school district was made aware of complaints about the particular driver and was considered negligent for failing to take adequate action to protect the students.
Some states regulators are taking school bus safety into their own hands. A recent bill in South Carolina proposes to mandate three-point lap and shoulder seat belts in all newly-manufactured school buses in the state. Additional safety regulations may have an impact on keeping claim costs down, which may ultimately help stabilize the sky-rocketing commercial auto increases.
While the increases seem unavoidable, there are steps you can take to try to ensure the best rates possible. Taking a risk management approach to your training programs, hiring requirements and safety procedures can help to control your claim activity. This includes checking driver’s motor vehicle records, providing superior driver training, performing routine maintenance on vehicles and enforcing safe driving practices.
Combining that risk management approach with a broker that has strong, long-standing carrier relationships can help position your company, organization or institution for the best possible outcome. Contact a trusted advisor at RCM&D to learn more about how we can help your institution get the most favorable rates.
The issue of Commercial Auto Increases was ranked as one of the top risks for education institutions in the RCM&D report 2019 Outlook: Top Risks for Education Institutions. To receive a copy of the full report, please complete the form to the right.