Report suggests technology is driving up cost of insurance
Insurance rates for long-haul trucks and trucking have been rapidly increasing over the past several years. The culprit? Technology. That’s according to a recent report from Advanced Training Systems.
One would think that new technology in trucks that purportedly make driving safer would lower insurance rates. However, the opposite is true. According to Advanced Training Systems, premiums have doubled from an average of $6,000 to $7,000 earlier in the decade to $12,000 to $14,000, with some premiums going up to $20,000.
St. Petersburg, Fla.-based Advanced Training Systems, a designer and manufacturer of simulators for driver training, suggests all the gadgets are responsible for driving up costs. The company notes the average cost of a new truck ranges from $140,000 to $175,000.
“There’s a paradox here,” Advanced Training Systems CEO John Kearney said in a statement. “The cost of trucks today is going up because of the high technology embedded in today’s tractor-trailer rigs, which is given as a reason for these premium increases. Yet, at the same time, this technology is making the trucks safer – which, logically, should bring insurance costs down.”
The report points to data from the American Transportation Research Institute that reveals insurance accounts for the largest increases in operational costs for trucking companies. Insurance rose by 11 percent from 2013-14 and another 29 percent from 2014-15.
Kearney proposes that insurance companies need to be educated on the costly technology. More specifically, the higher costs are making trucks safer. Therefore, technology should lower insurance settlement costs.
The trucking industry itself is not completely off the hook. Kearney suggests trucking companies should invest in driver training, while truck manufacturers continue developing technology that improves safety. LL