For Last Mile Delivery drivers and operations, commercial auto insurance can be a significant expense, so it’s crucial to understand those factors that are within your control and influence your premium. Chiefly, speeding violations can have a surprisingly powerful and negative impact on the underwriting of your policy and, ultimately, your wallet.

The Underwriting Perspective: Risk and Responsibility

Commercial auto insurance underwriters are in the business of assessing risk. We look at a variety of factors to determine how likely drivers are to be involved in accidents and generate claims. Driver behavior is a primary consideration, so we rely heavily on Motor Vehicle Reports (MVRs) to assess driver safety behind the wheel. From an underwriter’s perspective, a driver with speeding violations suggests a pattern of risky behavior and a higher probability of future incidents. Let’s take a deeper dive into how underwriters assess the risks of speeding violations.

The Ripple Effect: How Speeding Tickets Impact Your Insurability & Premiums

1. Eligibility: Some insurance carriers decline drivers with violations for speeding 15+mph over the speed limit within the last 3-5 years. That means that if you get just one speeding violation, coverage could be declined. Multiple speeding violations received during the policy term could result in cancellation or non-renewal of your policy.
2. Premium Factors: If an insurance carrier accepts drivers with high speeding violations, the drivers are considered a much higher risk and pricing will reflect that risk. A single speeding ticket could increase insurance premiums by as much as 25%. Conversely, drivers with clean records are typically eligible for discounts that decrease premiums.
3. Correlation to Accident Likelihood: Underwriters also look at speeding violations as a predictor of future accidents. Statistics from the National Highway Traffic Safety Administration (NHTSA) indicate that in 2023 speeding contributes to approximately 29% (almost 1/3) of all traffic fatalities each year.
4. Behavioral Risk Indicator: Insurers can view repeated speeding as a sign of disregard for traffic laws, hours-of-service regulations and correlates with other risk behaviors like aggressive or distracted driving. It also suggests that perhaps the company owner pushed drivers to sacrifice safety and adherence to government regulations for on-time delivery. Accounts operating with multiple drivers with speeding violations also suggest poor hiring standards and management. This affects how underwriters view the company’s commitment to safety and risk mitigation.
5. Personal Violations and Commercial Insurance: It’s important to note that personal speeding tickets can also impact your commercial auto insurance premiums. Underwriters look at a driver’s overall history, on and off the clock, to assess risk.
6. Other Factors/Relation to Operations: Regarding last mile delivery operations, where drivers and helpers are providing installation and set-up in offices and homes, underwriters are also considering lanes of travel. Drivers with speeding violations pose a higher risk as they are entering residential areas where families, children and pets are present.

How Can you Manage/Improve Driver Behavior?

Your insurance carrier may have driver safety courses you and your drivers can take at no extra cost. Ask your agent if your policy provides access to loss control and driver improvement courses. ELDs are a sound investment in your business’s commitment to safety. ELDs cap a truck’s maximum speed-typically around 65 mph. Their impact is direct and measurable, as the owner is provided with real time data. ELDs improve driver behavior and safety in the following ways:

• Prevent High-Speed Driving: ELDs physically restrict the truck from exceeding a set speed, eliminating the possibility of speeding violations.
• Reduce Crash Severity: Lower speeds mean shorter braking distances and less forceful impacts, which significantly reduces the severity of crashes.
• Promote Safer Driving Behavior: Drivers are less likely to engage in aggressive driving when they know their speed is capped.

Stay in the Slow Lane – You’ll Get Ahead of Rising Insurance Premiums!

Sources:

Ami Miller

Ami Miller is AVP, underwriting of the BizCHOICE Transportation Insurance Program, supporting relationships with our broker partners, 3PLs and insureds. Ami has 18 years of last mile delivery industry experience and is a member of the Motor Carrier Insurance Education Foundation, Women in Trucking and WSIA. She holds her BA from the University of Washington and her P&C License. Ami enjoys spending time with family, going to the beach, reading, and listening to music and attending live shows.