Insurance Risks in Commercial Trucking and Transportation Insurance

Insurance Risks in Commercial Trucking and Transportation Insurance blog image with semi-truck in background

From sleep deprivation to cell phone usage behind the wheel, the causes of truck-related accidents are growing with every passing year. This has resulted in blockbuster payouts. These high payouts have caused many of the major commercial fleet insurers to exit this market.

One of the most high profile incidents was when a Wal-Mart truck that hit the limo of Tracy Morgan in 2014, resulting in a six-vehicle pile-up, killing one and injuring several others.

While this industry has its fair share of risk, it's still crucial to understand that commercial trucking has specific insurance needs. Knowing what the risks are and the particular insurance needs are the best way to ensure you're prepared and protected if an accident occurs.

If you're ready to dive in and learn more about the risks and challenges in the trucking and transportation industry, keep reading. 

What Is Commercial Truck Insurance?

This is a type of auto insurance specifically designed to meet the needs of the trucking industry. General commercial truck policies will cover trucks if an accident occurs. Comprehensive and collision coverage includes most of the damages that are caused by several perils.

You can also opt for specialized commercial truck insurance for you or your fleet. This provides coverage for other perils along with specific liability issues. This is believed to be an affordable way to protect your investment as you're hauling time-sensitive or valuable materials from point A to point B.

Along with the primary and specialized coverage, you can also add non-trucking options to your insurance policy. For example, non-trucking liability coverage protects against incidents if a truck is not holding cargo. Another option is occupational accident coverage, which provides protection for drivers if accident dismemberment or death occurs.

Common Risks in the Commercial Trucking Industry

When you understand the potential risks in the commercial trucking industry, you can also better understand the need for quality and adequate trucking insurance.

Some of the most common risks in this industry include:

Driver Shortages

The commercial trucking industry is facing a serious driver shortage. In fact, it's predicted the deficit will more than double in the coming decade. This hurts the industry's ability to handle the needs caused by growing load deliveries.

This is a problem that is expected to grow in severity because of the parallel trend of high driver turnover rates. This high rate has added to the problem of reduced performance consistency and the artificial demand for experienced drivers.

Drivers without much experience are considered “higher risk” than those who have logged hundreds of hours on the road. This increases the risk of this industry and makes the need for proper insurance more essential.

Congestion and Parking Issues

Approximately 84% of drivers surveyed recently admitted to parking in an illegal or unauthorized area at least one time per week. This is a trend that is even higher in more congested regions and cities because big rig parking is much harder to find.

The fact is, the more time it takes a truck driver to arrive at their destination, the more money it costs them. Therefore, they are willing to risk parking in these areas.

The problem is one related to claims exposure. Drivers are adding risk as they makeup time by parking illegally or speeding to help avoid violating the maximum hours of service regulations.

Crash Behavior Prediction

Certain behaviors can be used to predict crash risk. This presents some value to insurers, rating professionals, and underwriters. With an understanding of what may cause risk, it is possible to look at a driver's history and determine if they are "high risk" or not.

New technologies, such as connected telematics and vehicles, motor vehicle reports, driver monitoring tools, and other products, are now available and can be used by insurers to detail vehicle and driver histories.

With these tools in place, it's possible to assess and to predict the potential risk of accidents, which helps underwriters’ better rate and price policies.

Specific truck driving behaviors are used for predicting things like the possibility of future crash involvement. Some of the behaviors include traffic violations, accidents, and convictions.

The Correlation Between the Risks and the Challenges in the Trucking Industry

There is some support between the correlations between the challenges the commercial trucking industry is facing, and the exposures and risks faced by the commercial auto industry. Right now, many industry experts are searching for solutions to the driver shortage issue, including the use of younger drivers to help fill in the gaps.

Also, operational costs, which affect the way trucking companies compensate their drivers and stay profitable, are a key area of discussion. Regulations and rules by the various safety organizations and the government affect aspects like driver rest periods and hours of service. There are also general rules for short and long hauls, which are constantly being examined and reviewed for changes that may cut costs while maintaining driver safety.

Do You Have the Proper Protection?

When it comes to insurance needs for commercial trucking, knowing the risks and challenges the industry faces is the best way to know what protections you need in place. The information here provides you with a basic overview of what type of insurance protections are needed.

Do you want more information about commercial truck insurance? Do you have questions about the policies that would be right for you or your fleet? If so, contact us.

Our team can help you with your insurance needs and ensure you have the coverage and protection needed. Our goal is to help you reduce your liability while staying safe and keeping others safe.