What affects insurance rates? – Freight waves

In this episode of WHAT THE TRUCK?!? Dooner talks to Ashley Hammonds, executive vice president and general manager at Reliance Partners, to break down some of the current trends in the industry and their impact on insurance rates.

Hurricane season is almost over. The official ending is November 30but most activity during hurricane season occurs in September and October. There is little expectation that another hurricane will make landfall in the US during the rest of the year. People continue to grapple with the utter devastation caused by Hurricane Helene and Hurricane Milton, which hit the Southeast just two weeks apart.

According to Hammonds, “Overall rates will not increase dramatically due to hurricanes, but there will be some incremental increases.” These increases will primarily impact businesses in the path of a typical hurricane. Most traditional policies cover any problems, damage or washouts resulting from natural disasters such as a hurricane.

Most significant truck damage during hurricane season can be minimized by moving equipment out of the eye of the storm and having backup trailers or trucks to ensure freight can be delivered. Everything can be done to avoid the risk of a claim. That’s the key in every situation: what’s the best course of action to avoid a claim.

Another trend unfortunately taking over the industry is freight theft, which will likely have a much greater impact on insurance rates. According to CargoNet there was one 14% increase suffer from cargo theft year after year. An industry-wide loss of approximately $39 million dollars for just the third quarter of this year.

Most cargo theft claims are difficult to investigate and the increase in thefts has left some insurance companies struggling to keep up, as more traditional insurance claims are also still awaiting investigation.

Hammonds said: “If 35 trailers of TVs are stolen on Tuesday there will certainly be a number of flags raised and the alarm raised. At the same time, you have two or three fatalities on the same day, so you have to assess what is most important to investigate.”

A carrier’s role in this could be more important than ever, as having the most information and willingness to help with a claim means the claim can be processed faster and that could result in faster payouts and less money tied up in claims that waiting to be investigated, which can result in faster payouts. in turn help keep insurance premiums low.

Hammonds says: “Be involved in claims. Don’t rely solely on the insurance company. Storage costs, costs continue to increase the longer the claim exists. Rates will skyrocket, but can be prevented with a phone call and intervention from carriers.”

According to Truck dive“The average increase in commercial auto premiums decreased, from an average increase of 8.8% in the third quarter to an increase of 7.3% in the fourth quarter.” specifically looking at the end of the year last year. Some increases were as high as 29%. With insurance being one of the largest expenses for motor carriers, anything to mitigate the increase is welcome.

When it comes to the future of insurance rates and the important aspects we need to pay attention to heading into 2025. Hammonds says: “Two things to watch for: the overall safety of carriers with FMCSA and losses. Losses will always be the biggest factor. Ultimately, insurers need to monitor losses and try to keep them as low as possible. That is what will be the leader when it comes to rates.”

Click here for more information about Reliance Partners.