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5 Factors That Affect the Cost of Commercial Auto Insurance

5 Factors That Affect the Cost of Commercial Auto Insurance

5 Factors That Affect the Cost of Commercial Auto Insurance

Commercial auto insurance is a type of insurance that provides coverage for vehicles, cars, trucks, or buses used by your business. It may include comprehensive insurance, collision insurance, liability insurance, uninsured motorist, and underinsured motorists. Beyond these basic features, you can customize your policy to cover other endorsements like roadside assistance, rental reimbursement, auto loan or lease coverage, expanded towing, medical payments coverage etc.

Factors That Affect the Cost of Commercial Auto Insurance

Accidents are seen as the most common cause of a rise in auto insurance premiums. However, accidents aside, the cost of coverage is increasing, and even the most careful drivers are being affected by it. Besides, the occurrence of certain unanticipated events might cause your auto insurance premiums to go up.

The following are a few factors that may affect the cost of your commercial auto insurance premiums.

Number of Miles Driven

Due to the pandemic-induced recession, manufacturers reduced production, resulting in decreased sales and deliveries. Due to the drop in deliveries, companies had to let go of their drivers. However, of late, with the expansion of the e-commerce market, there has been an increase in production and related activities. However, a new problem has now surfaced. Companies would rather rely on their old workforce to perform all the new duties than hire new drivers or buy new vehicles. Therefore, the existing vehicles are driven for longer distances and time, resulting in more miles driven. More miles driven directly equates to higher risks of auto accidents, resulting in a rise in premiums.

Change in Fuel Prices

The price of fuel has an inverse relation with the frequency of accidents. When fuel is expensive, people tend to spend less time on the road to save money. This results in a decline in the frequency of accidents. When fuel prices are stable, there would be more cars on the road, including personal and business vehicles, increasing the risks of accidents, leading to higher premiums.

Distracted Driving

Nowadays, several forms of distractions exist while driving. Many systems operated in the car, such as the radio, GPS, and Bluetooth, demand a lot of visual attention. This, in turn, causes the driver to be less focused on the road, increasing their chances of being involved in an accident. Texting as a distraction no longer affects just drivers but even pedestrians who walk on the lanes with their eyes glued to their mobile devices.

Increase in Medical Expenses

A steady increase in the frequency and cost of surgeries required post accidents also affects auto insurance premiums. Injuries that require surgery need extensive treatment and several subsequent check-ups. All this escalates the overall medical bills, ultimately affecting the premiums paid to cover oneself against auto accidents.

Rise in Lawsuits and Legal Expenses

Lawyers are now doing all they can to hold the transportation company responsible for the accident. They are actively involved in claims for large and small sums of money, leveraging every piece of information as aggressively as possible to make money from an untapped source. This aggressive involvement of attorneys tends to increase the legal costs associated with an accident, ultimately affecting the premiums.

Commercial auto insurance can be quite costly, and the intricacies hard to navigate. If you need help with commercial auto insurance, contact our experts at Remland Insurance in Orange, California today.


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