How to price trucking insurance: rating factors and a worked example
The rating factors that drive trucking insurance premiums, from vehicle weight and radius to cargo and telematics, with a worked quote for an eight-truck long haul fleet priced by a real rating model.
Trucking is the high-severity end of commercial auto. A loaded tractor-trailer at highway speed can cause a very large loss, so the factors that matter most are the weight of the vehicles, how far they travel and what they carry. Risk management, such as telematics and a formal safety programme, earns credits because it changes how often those losses happen.
This article walks through those factors and prices an eight-truck long haul fleet with a real rating model: the commercial auto fleet example, one of the default models in Ptally. The rates are illustrative and are not taken from any insurer.
The main rating factors
Weight and class
Trucking fleets are mostly heavy and extra heavy vehicles. In the example model a heavy truck has a base of $3,800 and an extra heavy truck $5,400. A weight factor then adds 1.25 for vehicles up to 45,000 lbs and 1.45 up to 80,000 lbs, the usual maximum for a loaded tractor-trailer.
Radius of operation
Long haul is the biggest single load after weight. Each long haul vehicle takes a 1.35 factor in its own premium. The example model also has a fleet-wide radius factor of 1.25 for long haul operations. As we note in the fleet pricing article, a real product should decide whether radius is rated at vehicle level, fleet level or both, because both together compound.
Cargo
What is in the trailer changes the severity of a loss. General freight is neutral. Refrigerated loads take 1.08, for breakdown and spoilage exposure. Hazardous goods take 1.35, because a spill or fire costs far more to clear up.
Risk management
Two credits reward operators who manage their drivers:
- Telematics: 8% off. Telematics data shows speeding and harsh braking, and helps recover stolen units.
- Safety programme: 5% off for a formal driver safety programme.
Claims record and state
A credit of 3% per consecutive claim-free year, floored at 25%, rewards a clean record. A state factor reflects claim costs, from 1.00 in Texas to 1.25 in New York.
Underwriting rules
The example model declines fleets of more than 200 vehicles. It refers fleets of 50 or more vehicles, and fleets of five or more vehicles with no claim-free years, to an underwriter. A real trucking product would usually add rules on driver experience, MVR violations and safety ratings, each as another rule in the same step.
A worked example
Take a Texas carrier running eight trucks on long haul refrigerated routes: six heavy trucks at 40,000 lbs and two extra heavy trucks at 80,000 lbs. It has two claim-free years, a formal safety programme and telematics on every truck.
First, each truck:
| Vehicle | Class base | × Radius | × Weight | = Premium |
|---|---|---|---|---|
| Heavy truck (×6) | $3,800 | 1.35 | 1.25 | $6,412.50 each |
| Extra heavy truck (×2) | $5,400 | 1.35 | 1.45 | $10,570.50 each |
| Vehicle total | $59,616.00 |
Then the fleet:
| Step | Value | Reason |
|---|---|---|
| Vehicle total | $59,616.00 | Eight trucks |
| × State factor | 1.00 | Texas |
| × Experience credit | 0.94 | Two claim-free years |
| × Safety programme | 0.95 | Formal programme |
| × Telematics | 0.92 | Fitted |
| × Fleet radius | 1.25 | Long haul |
| × Cargo | 1.08 | Refrigerated |
| + Policy fee | $200.00 | |
| = Fleet premium | $66,320.46 |
The calculation is 59,616 × 1.00 × 0.94 × 0.95 × 0.92 × 1.25 × 1.08 = 66,120.46, plus the $200 fee.
Two variations from the same model show how much the operator factors matter:
- Hazardous cargo instead of refrigerated: $82,850.58. The cargo factor moves from 1.08 to 1.35.
- No telematics, no safety programme and no claim-free years: $80,681.60, and the quote is referred to an underwriter because a fleet of five or more vehicles has no claims-free history.
Things to watch in a trucking model
Schedules change often. Trucks are added, replaced and sold during the policy year. Pricing each vehicle with a child model means a mid-term change is one more run of the same model, not a recalculation by hand.
Credits stack. Experience, safety and telematics credits multiply. Together they take 18% off in the example above. Many rating guides cap the total credit, which is one more step in the model.
Referral is part of the price. For trucking, the decision to refer is often as important as the premium. Keep refer rules in the model next to the rates, so they are tested and released together.
Building the model
The full model, with every rate table, rule and test, is on the commercial auto fleet example page. Price a quote over the API and add ?debug=true to see each truck's premium and each fleet factor in the response. To attach the right cargo and telematics wordings to the policy, see building policy documents from the quote response.
Getting started
Ptally is free to build on, with no implementation fee. Send us your trucking rating guide or spreadsheet and we will help you turn it into a tested model, or start from the default fleet model and change the rates yourself. Talk to our team.