Rancho Mesa's Media Communications & Client Services Manager Alyssa Burley and Account Executive Casey Craig discuss strategies for lowering commercial auto premiums.

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Director/Host: Alyssa Burley

Guest: Casey Craig

Producer/Editor: Lauren Stumpf

Music: "Home" by JHS Pedals, “News Room News” by Spence

tRANSCRIPT

Alyssa Burley: Hi, this is Alyssa Burley with Rancho Mesa's Media Communications and Client Services Department. Thank you for listening to today's top Rancho Mesa News. Brought to you by our Safety and Risk Management Network StudioOne. Welcome back, everyone. My guest is Casey Craig, Account Executive with Rancho Mesa. He specializes in providing commercial insurance for paint, plaster and drywall contractors. Today, we're going to talk about strategies to lower commercial auto premiums. Casey, welcome to the show.

Casey Craig: Thanks for having me.

AB: Of course. So business owners are looking for ways to help lower or at least maintain their operating costs as we navigate inflation. One way they are looking to do this is with their commercial auto insurance premiums. Now we're in California. Why are we seeing commercial auto premiums increase?

CC: Yeah, so we've kind of created a bit of a nightmare scenario here where we've got so many drivers on the road. Every vehicle is getting more expensive. The bumpers are now really technologically sound. But we have distracted drivers. So even though we're getting safer vehicles, the drivers are not driving them safely. This is kind of leading to a lot more frequency and severity, which is a bit of a nightmare for the carriers.

CC: So you're seeing right now commercial auto carriers are actually bailing from California. There's not as many of them offering renewals. What that's going to do is put a lot more stress on the carriers that are staying here, because now everybody needs renewal terms from new carriers. So they're getting a little overwhelmed because they don't have enough personnel to, you know, follow up like they should be.

CC: These carriers are kind of restricted on the amount of increases that they can apply each year. And the losses that they're having is making it impossible for them to be profitable. So they want to have larger increases. They're not allowed to. And right now the result is they're just leaving California.

AB: Wow.

CC: Yeah.

AB: All right. So what can our listeners do as the insurer to help their companies look like a better risk for these auto insurance carriers and try to mitigate premium increases?

CC: One thing that they can try to do is they can increase, for their employees, they should increase the minimum limits. So right now in California, we have minimum limits of 15 thousand, 30 thousand, and 5 thousand. That's been seen for the last 50 years, over 50 years. And, uh, as we just talked about, cost of vehicles has gone up. The other thing it's a big part of it is the cost for medical care has gone up. So if anybody does get injured, it costs a lot more to treat that than it did 50 years ago. This is something that we've been pushing for to get readdressed. But as a company, you should probably get ahead of this problem. I mean, recommended limits can be as high as 100, 300, 100. So that's just for your employees that are not driving company vehicles so that if they were to get injured going to and from work, they've got a little bit more coverage that doesn't go directly to your guy’s liability insurance.

AB: And these are four drivers that are driving their own vehicles.

CC: They are. Yeah. So if you have a company vehicle, you're going to have coverage there. But a big exposure is people that are out there driving their company vehicles and then you're going to see people getting rear ended. And it's not their fault they're out there, but it's always going to follow who's ever insurance and is in the glove box. So whoever hit the person, if they have those low minimum limits, then it's going to go to who got hit and it's going to cover through their limits. And if they have low minimum limits as well, then it will eventually get to your guys company policy if they're driving to and from work. So it insulates you a little bit as far as you're not going to be having as many fender benders getting to your commercial auto policy if it's just them going to and from work.

AB: All right. So we need to make sure that employees driving their own vehicles for work are increasing their limits to keep up with the rising costs of all of these auto claims. And that might mean updating a company policy to say these are the new limits.

CC: Absolutely. California's actually stepping in a little bit, which is nice. In January 1st of 2025, they're going to be releasing the Protect California Driver's Act, which is going to increase those minimum limits from 15,035 to 30, 6015. So basically doubling them, which is great. It still is probably a little lean for what you guys need to insulate yourself,

AB: Yeah.

CC: But it's definitely a step in the right direction.

AB: So while the insured is updating their company policy to include the new limits, should they consider including the use of technology to monitor their drivers when they're driving a company owned vehicle?

CC: Absolutely. Yeah. A big thing that's going on right now is GPS. I mean, people are using it to essentially look for lost vehicles or stolen vehicles. But in reality, we should be using this as a proactive tool. So things that carriers are trying to get ahead of is having bad drivers on the road for your company. So you can use GPS now to track speeding, to track aggressive turns, aggressive braking. All of these things are indicators that an accident's going to be happening. So if you guys are tracking this before the accident does happen, it'll save you guys on your premiums.

AB: And you can do that proactively instead of waiting for the accident and then go back and look at the data. We can actually look at it essentially in real time.

CC: Exactly.

AB: Yeah. Okay. So when the auto carrier sees that the company is using GPS devices to monitor the driver behavior and they're proactively using the data to prevent accidents that can help reduce premiums because the carrier has evidence that the insured, our client, is taking safety seriously. So does implementing a driver training program help with premiums, too? So maybe you're looking at the data and you're saying, hey, this employee, maybe they're speeding or maybe they're doing something that we can give them some training. Is that going to help?

CC: Yeah, I think the whole goal here is to differentiate yourself from your industry. So if everybody is just having a driver behind the wheel, the carrier can't differentiate who's going to have losses. But if they can go, they're pulling these people off the off of their driving schedules because they're showing to be reckless drivers. Yeah, that's a subjective credit. You're really being proactive and that's what carriers are looking for.

AB: So if our listeners are interested in providing driver training for their employees, our SafetyOne™ application has that available to our clients. So definitely take advantage of that. And in addition, there's other things like a vehicle daily report. So before you take a company vehicle, check to make sure that the tires look good, there's no cracks in the windshield. The brakes are great. You know, things like that to prevent, you know, having a blowout on the freeway or something like that. So, Casey, I really appreciate you coming in. If listeners have questions about managing their commercial auto risk, what's the best way to get in touch with you?

CC: I can be reached at ccraig@ranchmesa.com or you can call me at 619-438-6900.

AB: All right. Well, Casey, thank you so much for joining me in StudioOne.

CC: Thanks again for having me.

AB: This is Alyssa Burley with Rancho Mesa. Thanks for tuning into our latest episode produced by StudioOne. For more information, visit us at ranchomesa.com and subscribe to our weekly newsletter.