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Why are Haulage Premiums rising, and how can you navigate this challenge?
Having worked with haulage companies for many years, we understand the challenges your industry faces. One significant issue is the rise in haulage costs of insurance premiums. In our article, we will explore the main factors driving the cost of claims up, which is the main factor contributing to the increase in premiums.
The Rising Cost of Materials
The increase in the cost of car parts is one of the factors contributing towards claims inflation. With supply chain disruptions and higher material costs, parts are more expensive than ever. This means repairs cost more, leading to increased claims costs.
Increased Claims Frequency
As the number of vehicles on the road returned to pre-pandemic levels, the frequency of claims also increased. Insurers base their premiums on risk, which means higher recognised risks result in higher premiums.
Inflation
Inflation is another big player here. As the cost of living rises, so does the cost of doing business. Everything from labour to utilities is much more expensive, and these increased operational costs are reflected in insurance premiums. Insurers need to ensure they can cover the higher costs of claims, which leads to higher premiums for everyone in the motor trade industry.
Advancements in Vehicle Technology
Modern cars are packed with advanced technology, which, while improving safety and performance, also means repairs are much more complex and costly. Fixing a bumper isn’t just about panel beating anymore – it can involve dealing with sensors, cameras, and other high-tech equipment. These types of repairs drive up insurance costs even further. We’ve also seen an increase in electric vehicles on the road and these are known to be more expensive to repair.
Law and Rule Change
Changes in legislation can also impact insurance premiums. For example, stricter safety and environmental standards can lead to increased costs for compliance, which insurers may pass on to policyholders in the form of higher premiums.
Fraud
Fraud hit the motor trade industry years ago. It is still present and will affect premiums. Fraud makes the sector unattractive to insurers due to the amount of work needed to understand the real from the fake. Cash for crash and ghost broking gave the sector a poor reputation and one that insurers choose to remove themselves from. The Insurance Fraud Bureau reported 13,700 offences of crash for cash in 2023 alone.
Claims Value
All the above factors are leading to increased claims costs. As a result, insurers have to recalibrate their premium rates to account for the growing expenses.
What Can You Do To Navigate The Challenges?
There are a number of ways to help your business mitigate the impact of rising insurance premiums:
- Improve the security of your premises and vehicles.
- Install trackers, so your vehicles can be tracked in the event of theft.
- Insurers offer discounts for certain alarms and perimeter fencing. Consider installing those.
- Use telematics, they can monitor your driver's behaviour, encouraging better driving and reducing the chance of an accident.
- Install CCTV systems on your vehicles, they can assist in defending claims.
- Review and update your policy regularly. Failing to disclose relevant information or changes to your operation could invalidate your current coverage and result in financial losses.
- Partner with the Haulage Insurance Specialist.
One Broker Can Help You And Your Business
At One Broker we work with a wide range of insurers who specialise in offering Haulage Insurance Covers at a competitive rate. We can help you find competitive premiums without compromising your coverage.
If you have any concerns about your insurance premiums and need to speak to a specialist, please feel free to call us on 01603760511.
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