But just because your construction business needs to have commercial auto insurance, doesn't mean you have to overpay for good coverage.
Here are seven ways you can save on your insurance rates, and put some extra cash back into your business where it belongs.
1. Hire Solid Drivers
Will your employees be driving your truck, vans, or other business vehicles? Then you want to be smart in your hiring practices and look for people with clean, solid driving records (You can check a would-be employee's driving record through the DMV).
Drivers with spotty records will come with higher premiums, and some carriers will even decline to cover the driver should they operate one of the vehicles.
But drivers with clean records can save you money. And give special notice to potential employees who are authorized to operate commercial vehicles; drivers with a commercial license can get you even lower rates.
2. Choose a Higher Deductible
One easy way to lower your monthly premiums is to raise your deductibles. The extra money that you save on premiums each month will often make up for the larger deductible amount in the event you need to file a claim.
3. Install GPS on Fleet Vehicles
Many insurance companies will offer you a lower rate on commercial auto when your fleet vehicles have GPS systems installed. GPS systems tend to reduce the amount of claims due to vehicle theft, reckless driving, and misuse of vehicles. When employees know a GPS system is on the company vehicle they are using, improved driving behavior often follows. Fewer claims due to GPS means lower rates for your fleet.
4. Evaluate New Purchases
Think twice before paying top dollar for that new work truck or fleet vehicle. The higher the value of an automobile, the higher the premium will be. To get the true price of that new work truck, look at the price of the vehicle plus the price of its annual premium.
5. Update your Policy
Have you retired vehicles or lost employees this year? Don't forget to update your commercial auto policy so you aren't paying to cover vehicles not in use, or the drivers no longer operating them. Keeping your policy updated means you only pay premiums for the vehicles and employees that you need to cover, and can likely put a few extra bucks back into your business.
And while you are updating your policy, ask your insurance provider what kind of discount you can get for combining other policies with your commercial auto. Citizens General offers a 10% discount off both your general liability and your auto policies if you combine both.
6. Don't let your Policy Lapse
When times get tough or work slows down, it can be tempting to try cutting corners. But letting your auto coverage lapse during off-season or slow times can actually cost you more money.
Insurance companies often provide rate discounts for continuous coverage. And when you let your policy lapse, your rates can often be higher when you decide to pick it back up again.
And don't forget the high price you pay if your work vehicle or employee isn't covered in the case of an accident. With an estimated five-million accidents occurring every year in the U.S., your work truck is at risk every single time you pull out of your driveway.
7. Pay your Premium Upfront
Construction can be a cyclical-business, with busy seasons that are more profitable and slower seasons where money is tight. Want to make this a money saving advantage? Most insurance providers will allow you to pay your annual premiums upfront, and will give you a reduced rate as an incentive, which can be up to 10% off. When business is booming and cash is flowing in, pay off your premiums for the year and you won't have to worry about making monthly payments in the slower seasons.
Your work vehicles work hard for you. Skimping or skipping on insurance coverage for them is not an option. But you can cover your trucks, vans, and other fleet vehicles and still save money. Don't overpay for your coverage, and put some cash back into your business instead.
Guest blog by Citizens General.