Get the Right Coverage at the Right Price for Your Towing and Trucking Business

As a transporter for hire,  it’s essential to have the right insurance coverage to protect your business when the unforeseen occurs. With insurance costs being a significant portion of the overall expenses, it is natural to want to find ways to save on those costs.

In this blog post, we’ll discuss strategies you can use to get the best deal on your trucking or towing services insurance and save money on your premiums. By following these tips, you can find a policy that offers the protection you need at a price that best fits your budget.

What is a truck insurance premium and why do you need it?

The insurance premium is the amount of money a transporter of goods pays to an insurance company in exchange for coverage. Premiums are typically based on several factors including the type and weight of the power unit, the nature and value of the goods being transported, the radius’ traveled, the quality of the employed drivers based on MVR activity along with coverage levels desired or required by contract. 

Transportation businesses are considered higher risk due to the nature of the business and the exposures that exist while on the roadway. High speeds, distracted driving and driver fatigue are leading causes of roadway accidents which lead to significant property damage, injury and even death.  

How to lower your truck insurance premium?

Insurance companies consider many elements when calculating premiums. Knowing what these providers are taking into account can help you secure dependable coverage at a reasonable price. We’ve compiled the top methods you can use to lower your transportation insurance premium:

1. Maintain Good Business Credit

Your financial rating is the factor your insurer will use to evaluate whether you can be trusted to make payments on time. If you have a poor track record of paying late or not making payments, you will be considered a high-risk customer, which will cause your insurance premiums to increase.

If the premium is paid on a monthly basis, be sure to pay on time.  When premiums are paid late, it requires an insurance carrier to incur additional administrative expense in order to comply with each state’s notification requirements.  Done repeatedly, it could result in a cancellation or an additional increased premium amount upon renewal.

Additionally, some insurers offer discounts for paying premiums in full upfront rather than in monthly installments. If you can pay your premiums in advance, consider this option to save on your insurance costs.

2. Implement safety measures

Insurance companies can offer discounts for businesses that take steps to reduce the risk of accidents and injuries. That’s why one of the easiest ways to lower your truck insurance premium is to make safety your top priority. 

Your past insurance claims will be considered when determining your premium rates. Safety measures can include implementing driver training programs, installing safety equipment such as front and forward-facing cameras or collision avoidance systems, and adopting safe driving practices.

3. Have a written safety policy

To demonstrate your commitment to safety,  it is essential to have clear and comprehensive safety policies in place. These should cover topics such as accident handling, drug and substance abuse, and other safety-related matters. Additionally, you should be able to demonstrate that such policies are being implemented through documentation. This could include providing evidence of completed training as an increased level of training can indicate a more robust safety profile. 

4. Hire drivers with good driving records

Insurance companies often offer discounts to drivers with clean driving records, suggesting a lower risk of accidents. To qualify for these discounts, make sure to hire truck drivers that know how to follow traffic laws and avoid getting tickets or causing accidents.

5. Consider your routes

Your trucks’ routes can affect the cost of your commercial trucking or towing insurance premiums. Such aspects as how often inclement weather appears and how densely populated an area can impact the risk level of a specific route.

Trucks with a larger area of operation typically have more expensive premiums than those with a limited range. This is because vehicles that cover more ground are considered more prone to accidents.

Furthermore, the premium amount can vary for trucks that cross over state lines. When a truck is insured in one state, another state’s regulations may apply when the truck crosses into it. This can alter the insurance risk, resulting in a change in premium amount during the policy term.

To reduce risk, avoid metropolitan regions and areas with frequent bad weather when planning your routes.

Lastly, insurance carriers look at jurisdictions and the accompanying legal climate within the routes of operation.  Fuel tax logs provide them a resource with which to pull this important information.

6. Maintain and improve your fleet

Insurance companies use the condition of your trucks as an indicator of how well you maintain your vehicles, which can significantly impact your insurance costs. Keeping your trucks in good working condition helps ensure they are safe to operate on the road and can also help prevent breakdowns and other issues that can lead to accidents. 

By investing in regular maintenance, you can demonstrate to insurance companies that you are taking steps to reduce the risk of accidents, which can help lower your insurance premium.

Another vital aspect to consider is the age of your truck fleet. As trucks age, they are more likely to require repairs and are more prone to breakdowns. Insurance companies consider the age of your trucks when determining your premium, so a fleet of newer vehicles may be less expensive to insure.

You should also consider the safety features and technology in your trucks. For example, if your trucks are equipped with collision avoidance systems, lane departure warning systems, or cameras, this can help to mitigate the risk of accidents. 

Insurance companies may also offer discounts for vehicles equipped with these types of safety technology, which can help lower your insurance premium.

7. Take into account your truck’s size and weight

The size and weight of your trucks have a significant influence on their insurance premium. Usually, larger power units  will have a higher insurance premium than smaller and lighter ones. This is because more oversized vehicles are likely to cause more damage in the event of a collision with another vehicle or object.

8. Consider the cargo you’re hauling

The nature of the cargo your trucks are hauling can significantly impact the cost of your truck insurance premium. Some types of cargo are more likely to be damaged or stolen, such as electronics or pharmaceuticals, which would likely raise the premium cost compared to less valuable items, like food or clothing. This has shown to be a higher risk for insurance companies, which explains why the premium cost is affected.

9. The number of employees

The number of drivers employed by your trucking or towing company is linked to the price of truck insurance premiums. Those with more crew members on their team will likely have to pay a higher insurance premium than those with fewer employees.   You may still need to pay a higher premium per truck. In fact, you may pay a lower rate per truck depending on the fleet size and other factors mentioned in this article.

Workers Compensation is directly affected by this as payroll is a factor when calculating the premium. 

10. Time in the industry

The time a business has been operating affects the cost of insurance premiums. Generally, premiums will be lower for corporations that have been in the market for 2-3 years or longer. Insurance companies deem longer-established companies to be more reliable and secure, so those with shorter histories will usually be charged more. If you are relatively new to the trucking or towing industry (1-2 years), you should anticipate higher premiums than those with a longer track record.

11. Increase your deductible

Another way to lower your insurance premiums is to consider raising the deductible, which is the amount you pay out of pocket before the insurance company covers the rest of the costs. A higher deductible can lead to lower premiums, but it’s essential to make sure you can afford to pay the higher deductible in case of a claim.

For example, let’s say you have a $1,000 deductible, and a claim arises that would cost $10,000 to repair. With this deductible, you would pay $1,000 out of pocket, and your insurer would cover the remaining $9,000. If you increase your deductible to $2,000, your premiums may be lower, but you would pay more out of pocket in case of a claim.

It’s essential to strike a balance between a high enough deductible to lower your premiums and a low enough deductible that you can afford to pay if you need to file a claim.

12. Bundle your insurance policies

If you need multiple types of coverage (e.g., liability, cargo, physical damage, etc.), consider packaging  them with the same insurer if they are willing to do so.  This can often result in discounts, as insurers may offer reduced rates for customers with multiple policies.

It’s also advisable to use one insurance company for your entire fleet. Using multiple companies to insure individual vehicles often results in higher rates and larger insurance costs and it may fall you out of favor with the DOT.  Many companies provide incentives when you add more vehicles to their insurance plan, such as discounts and lower interest rates. 

13. Work with an insurance agent who can shop around and compare quotes:

An insurance agent with transportation knowledge can help you explore your options and find the right coverage as well as shop the marketplace for the most advantageous rates  They can also assist you in identifying any discounts or special programs available to your business. Working with an insurance agent can be especially helpful if you’re unfamiliar with the insurance industry or have a complex insurance need.


It can be challenging to lower your transportation insurance premiums. Although individually, the strategies mentioned may not drastically reduce your premium, they can significantly lessen the amount you pay while ensuring that your coverage remains at or above the minimum requirement.

Thankfully, you can tailor your insurance policy to fit your budget and the demands of your business. Mike Keith Insurance is here to support you in finding the right blend of coverage and rates.
With over 50 years of experience, Mike Keith Insurance, Inc. is the Agency of Choice for many Tow and Recovery businesses. Our unparalleled service and “A” rated carrier base allow us to provide you with the most reasonable price and best coverage you need. Contact us today, and we will work together to design a program that best suits your needs!