Navigating changes in the Commercial Auto market

In recent years, the commercial auto market has experienced significant changes that are likely to impact your FedEx business during your upcoming policy renewals. 

Inflationary trends have led to increased costs for vehicle repairs, labor shortages have resulted in longer repair times for vehicles, and supply chain challenges have affected the cost of parts. 

However, it's important for you to recognize that certain factors are within your control and can help mitigate these rising costs. Below, we highlight key areas where you can focus to decrease renewal costs in the future.

4 tips to help reduce rising costs:

1. Evaluate deductible options: By opting for a higher deductible, Service Providers can potentially improve their loss ratio, which in turn provides an opportunity to earn future credits. Careful consideration of deductible options can help strike a balance between cost savings and financial protection. 
2. Review stated value: When it comes to commercial auto policies, the payout for vehicle losses is typically based on the actual cash value or the stated value of the vehicle, whichever is less at the time of loss. A vehicle's stated value is also used to ensure you are paying the correct amount on your insurance premium based on the market value. It is crucial for you to review and keep the stated value of your vehicles close to market value. This helps to ensure that in the event of a loss, you will receive adequate compensation, minimizing potential financial setbacks. 
3. Monitor claims activity: Advancements in vehicle technology have the potential to drive down claims activity. We recommend SP’s implement, monitor and assess the available technology to monitor their vehicles. By leveraging advanced safety features and telematics, you can potentially reduce the frequency and severity of claims, leading to lower insurance costs.
4. Reduce UM/UIM coverage: While it is important to maintain adequate coverage, you can evaluate your business’s specific needs and consider adjusting the coverage accordingly. This can help strike a balance between protection and cost savings. 

While the commercial auto market is experiencing changes that may impact your upcoming NTL/PD policy renewals, by focusing on areas within your control, you can take proactive steps to decrease renewal costs in the future. 

If you have additional questions, or would like to learn more about these options to help reduce your insurance costs, reach out to a member of your regional account team.