Learn about some of the factors driving Michigan’s high commercial auto insurance rates.
Recently, Insurance Marketplace Realities released their 2019 report that predicts that commercial auto rates will rise between 6% and 12% by the end of this year. Should this prediction hold true, it would mark the eighth consecutive year of increasing commercial auto insurance costs. But why exactly are commercial auto premiums on the upswing? Here are some of the factors that are driving Michigan’s high commercial auto insurance rates.
Increased Cost of Auto Accident Settlements
Insurance Marketplace Realities draws attention to the unprecedented increase in jury awards to auto accident plaintiffs as one of the reasons for high commercial auto insurance costs. The high legal cost as well as larger settlements naturally translates into higher commercial insurance rates.
More Cars on the Road
As the U.S. economy strengthens and the unemployment rate drops, there are more cars on the road. This increases the chances of getting into an auto accident. This increased risk translates into higher auto insurance costs for businesses.
Shortage of Experienced Drivers
Companies that are relying on commercial drivers are currently experiencing a labor shortage. This shortage has forced the industry to rely on less experienced drivers. With more inexperienced drivers behind the wheel, this increases the risk of an accident not just for the truckers, but for everyone on the road.
Increased Rates of Distracted Driving
The rise of smartphone use has led to a dangerous increase in distracted driving. Because distracted driving accidents are generally more severe, these types of accidents drive up auto insurance costs for all drivers.
Higher Repair Costs
Today, advances in automobile technology and specification make newer cars extremely expensive to repair. To ensure that policyholders have enough coverage to address elevated repair costs, commercial auto insurance rates have increased accordingly.
These are some of the factors that are driving Michigan’s high commercial auto insurance rates. Curious to learn more about the major insurance trends that are affecting your business? If so, then contact the experts at CIA Insurance and Risk Management for assistance today.
Post written by SAM CRUDO, Chief Executive Officer
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