Factors Affecting Insurance Costs_Blog

Factors Affecting Insurance Costs

The world of commercial trucking insurance can seem like a complex maze. When you buy insurance, you sign into an agreement that the insurance company will assume the financial responsibility in the event you have a loss. This agreement entails paying the company a specified premium. To protect themselves, insurance companies compile information about a trucking business to construct a risk profile. If the carrier presents as a high risk, they could have a larger premium, or the insurers might decline to provide them with coverage altogether.

Remember: All agreements come with stipulations that carriers must abide by for the agreement to remain valid. For instance, an insurance company may require you to list every person who will be driving your truck. If someone not listed is involved in an accident while operating your truck, the agreed-upon coverage could become null and void. This underscores the importance of having a reliable insurance agent who can secure the exact coverage you need and educate you about any stipulations.

So, what determines a trucking company’s risk?


The area where your trucking company is based plays a significant role in influencing insurance costs. Variations in insurance regulations, road conditions, and accident rates among areas can portray a trucking company as more or less susceptible to incidents. For example, cities tend to have a higher probability of accidents occurring than rural areas, which is why city operations usually have higher rates.

Operating Radius & Mileage

Your trucker’s operating radius and mileage also factor into the risk assessment. A larger travel radius corresponds to a higher likelihood of incidents. Consequently, trucking companies operating solely within a state often benefit from lower insurance premiums compared to their interstate counterparts. Insurance companies also request an IFTA (International Fuel Tax Agreement) report to facilitate a more precise risk assessment.


Your team of drivers is as crucial as the routes they plan to traverse. Factors such as a driver’s experience and driving history significantly impact insurance premiums offered by providers.

Supplying a list of Commercial Driver’s Licenses (CDLs) enables insurance companies to assess driver experience and driving records. Typically, drivers with clean driving records usually enjoy lower rates because they are less likely to be involved in accidents or violations.

Note: Each insurance company may have unique requirements and risk assessment methods.


The age and type of equipment used can also exert influence on insurance rates. Older vehicles may be considered riskier due to potential maintenance issues, resulting in higher insurance premiums. Additionally, specialized equipment may necessitate specific coverage, which can be costlier than standard coverage for common freight-hauling trucks.


The type of cargo you intend to transport significantly affects your insurance premium. High-value freight typically leads to higher insurance costs because the expense of replacing damaged or stolen high-value freight is greater compared to lower-value cargo. The same principle applies to hazardous versus non-hazardous materials. Furthermore, the weight of the cargo can impact rates since heavier cargo is more likely to cause damage in an accident, thereby requiring higher coverage.

USDOT Authority

Through your authority and filing information, insurers can get a snapshot of your trucking operation. This includes, but is not limited to operating status and type, power unit count, insurance history along with BASIC Scores.


When it comes to safety, providers take into account safety scores, violations, and more. Carriers with low safety scores tend to receive lower insurance rates, as they are perceived as lower risk. On the other hand, companies with high scores and multiple violations are seen as having a higher accident risk. Prioritizing safety by instituting an extensive safety program, not only protects your drivers and assets but also positions your company as a responsible and reliable partner in the eyes of insurers.

Loss History

Providers review loss history and claims to assess the carrier’s safety and risk management practices. It’s essential for carriers to proactively manage their loss history by implementing safety measures, providing driver training, and maintaining a commitment to accident prevention. A positive loss history and claims record can help carriers secure more competitive insurance premiums.

Tips to Lower Your Insurance Premium

Now that you know the factors influencing your insurance costs, what can you do to lower your premiums?
      • If you cannot change your company’s location, focus on factors you can control, such as your workforce, cargo selection, or implementing a safety program.
      • Shop around and obtain quotes from multiple insurance companies. Not all insurers assess potential risks in the same manner. Comparing quotes from various insurance providers can assist you in securing the right policy at the most favorable price. The simplest way to do this is by collaborating with an agent who has extensive market access.

If you need assistance in reducing your insurance premiums or want help exploring multiple insurance companies, don’t hesitate to reach out to Marquee Insurance Group. We’re here to assist you in obtaining the coverage you need at an affordable price.

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