On this episode on WHAT THE TRUCK?!? Dooner sits down with Ashley Hammonds, executive vice president and general manager at Reliance Partners to break down some of the current trends in the industry and its impact on insurance rates.
Hurricane season has almost come to a close. The official end is Nov. 30, however most of the activity for hurricane season happens in September and October. There is little expectation for another hurricane to make landfall in the U.S. for the rest of the year. People are left grappling with the utter devastation caused by Hurricane Helene and Hurricane Milton that hit the Southeast only two weeks apart.
According to Hammonds, “Overall rates wont see a huge increase as a result of hurricanes but there will be some incremental increases.” Those increases will primarily affect those companies domiciled in the path of a typical hurricane. Most traditional policies will cover any issues, damages or washouts as a result of natural disasters such as a hurricane.
Most of the significant damage to trucks during hurricane season can be mitigated by moving equipment out of the eye of the storm, having backup trailers or trucks to ensure freight can be delivered. Anything can be done to avoid the risk of a claim. That is the key in any situation is what is the best course of action to prevent a claim.
Another trend that’s unfortunately taking over the industry is cargo theft, which is likely to have a much larger impact on insurance rates. According to CargoNet, there was a 14% increase year over year in cargo theft. An industry wide loss of roughly, $39 million dollars for just Q3 of this year.
Most cargo theft claims are difficult to investigate and with the rise in theft it leaves some insurance companies scrambling to keep up as more traditional insurance claims are also still waiting for investigation.
Hammonds says, “if you get 35 trailers of tvs stolen on a tuesday, it definitely raises some flags and sends the alarm out. At the same time you have two or three fatalities on the same day so you have to triage what is most important to investigate.”
A carrier’s role in this could be more crucial than ever as the most information and willingness to help with a claim means that the claim can get processed faster and that could result in faster payouts, less money tied up in claims waiting to be investigated which can in turn help keep insurance premiums low.
Hammonds mentions, “Be involved with claims. Don’t rely solely on the insurance company. Storage fees, fees continue to build the longer the claim sits. Rates will skyrocket but are preventable with a phone call and intervention from carriers.”
According to Trucking Dive,”Average increases for commercial auto premiums softened, from an 8.8% average uptick in Q3 to a 7.3% rise in Q4.” specifically looking at the end of the year last year. Some increases were as high as 29%. With insurance being one of the top costs for motor carriers, anything to mitigate the increase is welcome.
When it comes to the future of insurance rates and the important aspects to watch heading into 2025. Hammonds says, “Two things to watch, overall carrier safety with FMCSA and losses. Losses will always be the biggest factor. At the end of the day insurers have to watch the losses and try to keep those as low as possible. That’s’ what is going to lead the pack when it comes to rates.”