It’s a simple fact of accounting that profits are generated after expenses are deducted from revenue. To improve your cash flow, it would be great to generate more revenue. However, in this economy, owner operators and contracted truckers may be faced with less opportunity for revenue. So, the wise strategy is to reduce your expenses. One expense to consider is insurance premiums. But you want to be certain that cutting your premiums doesn’t end up hurting your business. To arrive at the right balance, take a look at the following: changes in your business operations, your equipment and its depreciation, your deductible, ways to consolidate providers or ways to find discounts with providers.
Business Operations – One way to lower your premiums is, when the way you operate your business changes, contact your insurance agent and give him or her the details. Coverage costs can change if for example, the type of freight you haul or the type of trailer you use changes. You may be able to save money with a different type of coverage.
Equipment & Depreciation – Your truck may be the single most expensive item you have, but even its value depreciates over time. If it has been a year or more since the value of your truck was assessed, speak to your insurance agent. You may have the opportunity to reduce your physical damage premium. Be careful as well because over-estimating the value of your truck may actually work against you. If you are in an accident where your vehicle is totaled, insurance providers typically pay the lower of the actual cash value versus the stated value.
Deductible - Talk with an insurance agent about raising your deductible, but do so only if you can pay that deductible in the event of a claim. If you are an independent owner/operator, you might also consider combining damage and cargo deductibles or including related costs such as legal fees or lost wages due to downtime. When you talk to an insurance agent about covering these business expenses, be sure you will still have the coverage you need even if you shoulder more of the out-of-pocket costs.
Consolidate and Discount – If you are currently using multiple trucking insurance companies for different trucking related policies, consider combining policies with one insurer. You might be able to save money with a single truck insurance company that offers discounts for multiple types of coverage. You could also simply ASK your trucking insurance provider what discounts they offer. For example, do they provide for safe driver discounts? Do they have age-related discounts available? Might they offer a flexible payment plan to cover your insurance premium instead of paying the entire amount at once or up front? You would be surprised how many trucking insurance providers are willing to work with you to get your business. It is a win-win situation for you and the insurance company!
It can be tough to generate income in this economy, but by using these simple tips, you may be able to lower your expenses. Less money coming out of your pocket means more money for you. A reputable commercial trucking insurance company will work with you to provide the coverage you need at the price you can afford.