The Canadian Underwriter has recently reported that Facility Association drivers will soon have the opportunity to use telematics to improve their driving records.
The insurance industry has been taking note of the rising number of claims made by those in the trucking industry, and especially by drivers from Alberta. Experts say that the cause for the increased claims and driver violations has to do with lack of training. Commercial drivers do not receive the same kind of driver education in Alberta, which results in decreased skill levels.
Between 2016 and 2020, there was a 95% increase in insurance claims in Alberta for all commercial trucks, which is enormous as compared to a 25% increase in Eastern Canada. In addition, vehicles are not being maintained properly. A commercial vehicle inspection blitz conducted by Edmonton police in the fall of 2022 inspected 238 trucks, with 110 pulled off the road due to failure to comply with safety regulations.
To exacerbate the problem, a number of drivers in the Canadian trucking industry have been steadily leaving their jobs, which has left a shortage of experienced operators. The reason is due to a combination of factors, including people reaching retirement age. An new increase in demand for truckers to get goods to the market as Alberta’s economy booms once again is now making the situation unsustainable.
What is the Facility Association?
The Insurance Bureau of Canada (IBC) describes the Facility Association’s mission as, “to administer the automobile insurance residual markets, enhance market stability, and guarantee the availability of automobile insurance to those eligible to obtain it.” Serving the residual market means they provide coverage to drivers when insurance companies in the regular market refuse an applicant as too risky.
The vast majority of drivers are covered for automobile insurance through the regular competitive marketplace. The Facility Association works with specific insurance companies in Alberta to provide overage to those who may be having difficulty obtaining insurance. Common reasons are:
- A bad driving record or no record at all.
- A history of claims made.
- The type of vehicle that is owned.
- How the vehicle is used.
- A history of late or no payments.
Since 2018, the Facilities Association says it has noted a marked increase in the number of trucks it is insuring in Alberta. There was a 47% increase in the number of vehicles insured through Facilities Association in 2021 over 2020, and another 14% added to that in 2022.
Drivers who are insured through the Facility Association pay higher premiums than others, and therefore should do what they can to move into the competitive marketplace. Telematics for truck drivers will soon be one way to do it.
Trucking and telematics
Starting May 1, 2023, Facilities Association drivers can voluntarily enroll in their telematics program, which then qualifies them to receive a reduction in their premiums of up to 8%.
Truckers displaying poor driving habits are incentivized to improve through a video-enabled application that sends information about behaviours behind the wheel back to the Facilities Association’s connected insurance technology provider Foresight Insurance Analytics. The program provides a daily score that drivers can then work to improve. They will be marked on a number of factors, including red-light violations, distracted driving, following too closely, hard braking, late braking, weaving in and out of lanes, being hard on the gas, harsh turning, not wearing seatbelts and lane violations.
The result is additional driver training and experience, and, ultimately, safer roads for everyone. Participation may allow truck drivers to leave Facilities Association sooner and return to the standard market, where they will have more options and access to lower prices. Contrary to common business models, the Facilities Association’s goal is have the smallest slice of the truckers’ insurance market as possible.
Remember that owners of fleet vehicles in Alberta may also consider telematics for their coverage, which will reward drivers for good behavior and let you, as the owner, know who is operating your vehicles properly and who is not.
Do you need commercial auto insurance?
Examples of business owners that may require commercial auto insurance include:
- Caterers of any sort
- Tradespeople (electricians, landscapers, plumbers, inspectors, etc.)
- Retail store owners
- Contractors
- Massage therapists
- Delivery drivers
- Health care providers
- Rideshare (Uber) or private drivers
Anyone with a vehicle registered underneath their business’s name, and that is mainly used for business purposes, requires a commercial auto insurance policy.
Commercial insurance coverage from Lane’s
In addition to commercial auto insurance, Lane’s also offers policies for commercial property insurance, commercial surety bonds, contract surety bonds, and contractors insurance. Contact us at our Calgary, Edmonton, Banff, and Alberta offices today.
