But why is this happening, and why now? How come it seem like your insurance company is charging you a crazy rate when just this past year things were reasonable? There are several causes of the chaos that's the tow truck insurance industry, and we'll try to create sense from the changes that have been affecting towing companies around the nation.
Why are tow truck rates going up so much?
Well, it's not just the tow truck industry that's getting hit by higher insurance rates. Commercial auto insurance rates are going up generally. There are more drivers around the road, which means more accidents and more insurance payouts. Distracted driving plays a sizable part in these accidents, as does a lack of safe driving habits. Commercial auto claims will also be becoming more severe, meaning that they're larger and more expensive. This is partly because of the costs of medical care, auto parts, and auto repairs have also been rising.
According to an article by Nicholas Porto titled “Battling the Rising Costs of Towing Insurance” in the May 2019 issue of Tow Times, there are three reasons that tow truck insurance rates are going up, up, and up.
1. Tow truck insurance carriers are backing away in the industry as if it were a venomous snake.
2. Towing is not a cheap industry because of the equipment needed.
3. Towing is really a highly dangerous industry.
What can your tow truck business do in order to keep its premiums down?
The insurance industry isn't something that we are able to control. The business owner doesn't have a say in what their carrier decides to do when it comes to covering tow trucks. However, there are some things that your organization can perform to lower its risks and, in turn, do its best to keep premiums down.
To avoid losses and claims, making sure that your drivers are safe is among the best things you can do to help your organization. You do not want your drivers to obtain into any sort of accident, so you need to stress safe driving habits and implement a distracted driving policy that prohibits texting and anything else that could take the driver's focus away from their truck and the road.
Having safety meetings at least once a month could be a good method to reinforce your business's commitment to safe driving habits. You can have individual appointments with your drivers to check on in with them and see should they have any suggestions for improving safety. These meetings will keep the risks at the front of everyone's mind and reinforce how important it is to reduce them as much as possible.
The tow truck insurance market is tough right now, there's no denying it. With carriers backing from the market left and right, it might be difficult to find coverage, and once you discover it you might understand that the cost is extremely high. All we are able to do is take measures to reduce our risks and sit tight to weather the storm.