Our research shows that understanding the process of how the FCMSA uses the safety data it collects can have a sizable impact on what motor carriers ultimately pay to your insurance company.
As we take this look into what really matters in controlling your trucking insurance premiums, let’s focus first on something that is often discussed but not always fully understood: “safety scores.” We’re using “air quotes” here in reference to the fact that although motor carriers may refer to their CSA scores, the agency that administers the Compliance, Safety, Accountability (CSA) program – the DOT’s Federal Motor Carrier Safety Administration (FMCSA) – does not issue scores at all.
The FMCSA groups motor carriers with those who have a similar number of safety events and assigns each carrier a percentile rank (what most of us know as “CSA score”). This safety data is held in FMCSA’s Safety Measurement System (SMS), an online database updated with new information from roadside inspections every month.
Insurance carriers tell us that a trucking company’s awareness of its SMS data is often just as important as its actual ranking. All SMS data is divided into 7 Behavior Analysis and Safety Improvement Categories (BASICs):
Unsafe Driving
Crash Indicator
HOS Compliance.
Vehicle Maintenance
Controlled Substances/Alcohol
Hazardous Materials Compliance
Driver Fitness
A trucking company’s policies and practices related to these categories are a big part of their safety profile, and how insurance underwriters arrive at their premium rates. There’s a simple reason for this: traffic violations and accidents drive safety ranking. Every operator in this industry should be focused on following those practices that are proven to actually reduce the incidence and severity of the violations and crashes that will inevitably occur. These are not only the things operators do that maintain and improve on good percentile rank. They are also things that insurance carriers look for when underwriting – and rating – their commercial transportation policies.
The most important of these practices belong to one of two categories: Driver Safety and Vehicle Maintenance.
Driver Safety: You’ll find that hiring drivers with good safety records is absolutely essential as all of your drivers' roadside inspection and accident reports are reflected in your CSA ranking. You must review the FMCSA’s Pre-Employment Screening Program (PSP) reports for every new hire. PSPs contain driver history including five years of crash and three years of inspection data from the FMCSA’s Motor Carrier Management Information System (MCMIS). We have found that companies who use PSP reports as part of their hiring process lower their crash rate by 8% (and driver out-of-service rate by 17%). Once they become your employees, you need to provide your drivers a safety program with ongoing training and check-ins, and minimize your risk by reviewing harsh driving incidents on a regular basis.
Vehicle Maintenance: A review of the SMS handbook will show you that all violations related to vehicle issues are assigned a severity weight that reflects the crash risk based on a scale of one (lowest crash risk) to 10 (highest crash risk) for each of FMCSA’s BASIC categories. Let’s look at some of the most frequent violations.
Consider that 30% of all roadside violations are connected to lights and over 11% are for tires. If 2 to 6 points on the BASIC 10-point scale are normally awarded to violations related to lights, it’s not hard to see why maintenance issues can quickly add up to a high CSA ranking. This is why preventative maintenance programs and a mandate for drivers to complete pre- and post-trip inspections are among the most important practices for keeping your ranking low.
Your CSA information has an impact on your premiums for another reason. That data is used in your Central Analysis Bureau (CAB) report, which insurance carriers give a great deal of weight in calculating your insurance rate. CAB reports are available exclusively to Central Analysis Bureau subscribers and provide comprehensive, up-to-date information on motor carriers’ safety, finances, and overall operations.
CAB subscriptions cover a wide range of tracking and monitoring devices and are a good example of the huge part technology plays in managing the cost of your insurance. In the next part of our series, we’ll be looking at how the kinds of key metrics we’ve discussed can be improved with your use of ELDs and other devices that can help you keep your insurance costs down.
It’s clear that when motor carriers are making decisions as to the rates they offer, they are also looking for a close partnership between their insurance carrier and the agents who work with them to apply for and maintain their coverage. DNI Services is committed to providing that kind of partnership, and this series is part of that commitment. We hope that sharing some of this information will help you make it through one of the biggest concerns that the trucking industry is now dealing with.
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