Closing the Underinsurance Gap in Commercial Truck Insurance

When it comes to mitigating insurance risk, accuracy makes all the difference. Insurers have a wealth of data available to them—from driver speed to truck utilization—but that data is only available once the vehicle is in use. At Price Digests, we’ve noticed that there’s still a critical gap in information at the underwriting stage. Here’s why commercial trucks are underinsured so often, and what insurers can do to change the status quo.

So, why does this matter now? The funds from the historic Infrastructure Investment and Jobs Act (IIJA), also known as the Bipartisan Infrastructure Law are beginning to be rolled out. And as large-scale construction projects begin around the country, they’re expected to drive up commercial truck sales.

With the construction sector set to increase demand for all types of trucks and the push for fleet electrification, underquoting these trucks could lead to massive premium leakage for insurance carriers and a struggle for truck owners to insure their truck’s full value.

Having the right data now will help insurers and fleet owners determine future costs for fleet upgrades and all the trucks needed on these job sites.

These solutions help take the guesswork out of underwriting and allow you to insure the full incomplete vehicle value based on the body type or an approximation based on its usage classification. With measurable, justifiable data for the complete truck, you can set premiums with confidence and reduce exposure to risk. 

Before a truck can begin its useful life, it may need additional customization to the cab and chassis. In this incomplete stage, it’s nearly impossible to quickly and accurately assess the vehicle’s Original Cost New (OCN) tied to the Vehicle Identification Number (VIN) without data sources similar to Price Digests. As a result, many insurers underestimate OCN, which sets the stage for premium leakage in the future. The customizations needed to make a truck complete are specific to the needs of the business, and the specialized applications of the truck. This can include upfitting for construction work, towing vehicles, or local deliveries. But the VIN alone doesn’t reveal these final configurations.

Common Hurdles to Underwriting Accuracy

Every underwriter takes accuracy seriously, but insurers face numerous pressures and limitations that get in the way of integrating more data into their processes:

• Pressure to improve speed to quote: The need for quick quotes often leads to shortcuts in assessing a truck’s true value.
• Inability to access data due to antiquated or disjointed technology: Outdated systems hinder the acquisition of accurate data.
• Difficulty modernizing underwriting practices: Traditional methods can’t keep up with the evolving complexities of the industry.

These hurdles result in underwriters having to request information about final truck configurations or move forward with inaccurate information, disrupting the quote process and/or underquoting. Moreover, the increasing frequency of commercial motor exposures are putting pressure on profitability, making it more urgent than ever for insurers to access automated, advanced analytics to close the data gap in the underwriting process.

The Solution: Better Truck Intelligence

New developments in insuretech allow insurers to gain better information and correct understated premiums. Intelligence solutions like TruckBody IQ®, leverage decades of real-world data and a deep understanding of industry-specific truck configurations to predict final buildouts and take the guesswork out of estimating OCN. When you can be confident that you’ve captured the full vehicle value, you can set premiums with confidence and reduce your exposure to risk.

Accurate valuation tools like TruckBody IQ® are the key to preventing underinsurance and ensuring that insurers and truck owners are adequately protected in this evolving landscape. Don’t let your insurance policies fall short—embrace the power of data to secure the future of commercial trucking.

Since 1911 Price Digests has served the vehicle data needs of the insurance, finance, government, and dealer markets through its portfolio of VIN decoding, specifications, and market value data solutions for the commercial truck, passenger vehicle, marine, powersport, and recreational vehicle asset classes. Our data + intelligence solutions pave roads to faster and better decisions, whether it’s seamlessly integrated APIs, online subscriptions, or custom data delivery.