With commercial vehicle premiums rising for 59 consecutive quarters, many fleet operators have come to accept renewal increases as a given. But a fleet’s individual renewal outcome depends on more than broad market conditions.
For fleets with strong claims management practices, favorable pricing is within reach. How quickly a claim is reported after an accident, how thoroughly the scene is documented and how effectively that information is relayed to underwriters all factor into how insurers price risk.
Fleets tend to fall short in these 3 areas.
Here are three common challenges when trying to control claims cost and secure better terms at renewal:
1) Late reporting
Delayed reporting is the single biggest claims cost driver and one of the clearest red flags for underwriters. When a claim isn’t reported promptly, adjusters lose the ability to intervene early and contact the claimant before attorneys get involved. Once they do, the likelihood of litigation and associated costs grow significantly. Some policies even require reporting within a day or two of an accident to avoid a potential claim denial.
2) Incomplete documentation
Many fleets are still using generic accident reporting designed for personal vehicles. When drivers don’t have the right tools to thoroughly document witness information, accident details and vehicle data, adjusters end up needing to piece it together after the fact. This slows down the entire claims process.
On top of that, memory fades fast — studies show drivers lose accident details within a week and — crash scenes are usually cleaned up within hours. When that information is gone, fleets lose the ability to properly defend themselves and positively influence the outcome of a claim.
3) Disconnected data and a reactive renewal strategy
Many fleets have invested in telematics, but the data doesn’t always make it to the right place. Telematics vendors and insurance carriers don’t always integrate well, meaning the safety and operational data a fleet is capturing isn’t necessarily visible to the carrier pricing their risk. When that data is siloed, fleets cannot clearly tell the story of what they’re doing on the safety and claims side.
Compounding this, most fleets wait until 60 days before renewal to engage their underwriter. By then, underwriters are seeing the account for the first time under time pressure, with no context for the progress the fleet has made throughout the year. That last-minute approach makes it significantly harder to positively influence renewal pricing.
Luckily, fleets can overcome these obstacles.
Each of the three challenges above has a practical solution. Here’s where to start:
1) Report claims the day of the accident.
Make same-day reporting a company policy, and ensure drivers know it. Require drivers to contact both the insurance carrier and the safety manager immediately after an incident. Timely reporting raises the likelihood of quicker settlements and protects against a coverage denial for failure to report promptly. Fleets that consistently report within 24 hours send a clear signal to underwriters that their claims process is working.
2) Standardize post-incident documentation.
Equip drivers with a fleet-specific accident report form rather than a generic personal auto form. A thorough report captures:
- Basic information (date, time, location, how the accident occurred);
- All parties involved (names, contact information, photos of licenses and insurance cards);
- Vehicle information (VINs, license plates);
- Pictures (vehicle damage, accident scene, location, signage, etc.); and
- Police information (officer name, badge number, report number, any citations issued).
Additionally, train drivers to collect any witness statements and write down their own statements as soon as possible post-accident.
3) Build your underwriting story year-round.
Work with your insurance broker to assemble a 12-month action plan that documents loss trends, frequency and severity data, lag time reporting improvements and safety culture changes throughout the policy year. Where possible, adopt telematics that integrate directly with your insurance carrier so they have real-time visibility into your safety practices.
Conduct regular claim reviews throughout the year and ask your broker to check your current safety and claims procedures against industry best practices. Mock severe claim events are another valuable tool, giving your team the chance to work through a major incident scenario before one happens. When you give underwriters a clear story of how your fleet manages claims, prioritizes safety and addresses issues proactively, your company will be in a much stronger position to negotiate more competitive pricing at renewal.
A premium increase isn’t inevitable after a claim.
Working with a transportation-specialized broker makes all of this more manageable. The right broker conducts regular claim reviews, runs mock claim scenarios and actively builds your underwriting narrative throughout the year on your behalf.
Many fleets assume annual premium increases are unavoidable. But having the right processes and partners in place can reduce your litigation exposure, keep claims costs in check and improve your outcomes at renewal.
Dan Wilhelm, CIC, is the transportation practice leader for global insurance brokerage Hub International. He has more than 25 years of insurance experience, and a strong entrepreneurial background. He specializes in complex risk for all lines of coverage for middle market and large accounts related to automobile, construction, manufacturing, food processing, distribution and transportation. He is licensed in property and casualty as well as life and health. Dan helps develop cost-effective and comprehensive insurance programs for all areas of coverage.
