What is a loss run and how does it impact your insurance premium?

If you have ever shopped around for commercial auto insurance, you may have heard the term loss run from your insurance broker. But what is that exactly? Keep reading to learn more about loss run reports, including how a loss run can impact your insurance premium and why it is important.

What is a loss run?

A loss run report is similar to a credit score. While banks look at your credit score to determine whether or not you’re loan-worthy, insurers look to your loss run report to get a better sense of the risks involved in insuring your business.

A loss run report sheds light on your past accidents, from how often they’ve occurred to how costly they’ve been to repair. This includes:

• The history of claims your business has filed
• The cost and severity of each claim
• The frequency of claims

How does a loss run impact your commercial insurance premium?

The number of reported trucking accidents in the United States has increased by 52% since 2009, with the average cost for a crash involving a medium or heavy truck coming in at roughly $150,000. This makes it important for insurance providers to assess the probability that a trucking business will cost them money in the long run before deciding to provide coverage.

A loss run report allows the provider to decide how high the risk is to insure your trucking business. A business with fewer accidents over an extended period of time will be considered lower risk to insure. The lower the risk, the lower your insurance premiums will be.

A loss run report allows the provider to decide how high the risk is to insure your trucking business. A business with fewer accidents over an extended period of time will be considered lower risk to insure. The lower the risk, the lower your insurance premiums will be.

Why is it important to provide a loss run?

Providing a loss run report is not just beneficial for the insurance provider. Below are three key reasons why it is important to provide a loss run report:

It can help you get quality insurance coverage

Insurance underwriters will typically ask for a 3-5-year loss run history that includes your policy number, date of each claim, the amount paid or on reserve, and a brief description of the claim. If you can’t back up your good loss history with evidence, you’ll have a hard time finding quality coverage.

It can qualify you for insurance discounts

Providing prospective insurers with a thorough, accident-free loss run report can reduce the cost of your insurance. Doing all you can to lower your premium will help keep more money in your pocket, especially since commercial auto insurance premiums increase every year to keep up with the cost of inflation.

Omitting a loss run can cost you

If you or your drivers have a few accidents under your belt, it may be tempting to forgo the loss run report. However, choosing not to provide a loss run when applying for insurance coverage replacement will allow the carrier to rate you as a new business, which can actually cost you higher premiums.

To get your loss run report, simply contact your current insurance provider. Be sure to specify how many years of claims history you need and when you need the report.

Get better rates on commercial auto insurance

SmartHop was built to help owner-operators and fleet owners like you earn more, save on operating expenses, and stress less. As a licensed agency for truckers, by truckers, our industry experts can connect you with the right commercial insurance coverage to fit your particular needs. Leverage our network of top-rated insurance carriers, with free quotes on insurance packages and no obligation to purchase.