Posted on: July 30, 2024|By: Monica Orosz

An urgent need exists for more comprehensive training of new commercial truck drivers, says a report by the Insurance Bureau of Canada. Driver shortages and access to adequate training and risk management are two key challenges faced by the commercial trucking industry. Let’s examine why more training for new commercial truck drivers is needed. Additionally, let’s examine how it can not only make them safer on the road but also help lower insurance costs.

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The importance of trucking on the economy

The report found truck drivers with less than three years of experience are more likely to be involved in a crash.

Training for new commercial truck drivers: Commercial Insurance Coverage

Truck drivers in Alberta, Ontario, and the Atlantic provinces with two or fewer years of driving experience were involved in between two and three collisions per 100 vehicles in 2022. In contrast, drivers with six years of experience got involved in about one crash per 100 vehicles.

What is the cost of commercial driver accident claims?

In 2022, new commercial truck drivers with less than a year of experience paid an average annual insurance premium covering third-party liability of up to $5,000. While the cost may be high, it is important to note that it drops to just under $3,000 for new drivers with at least a year of experience. For drivers with seven years of experience, third-party liability premiums were below $1,000.

MNP’s Training and Regulation Suggestions

Of the seven provinces and three territories reviewed, three have mandatory training: Alberta, Ontario, and Northwest Territories. MELT has not yet been implemented in Quebec, Atlantic Canada, Yukon, and Nunavut.

What exactly is Fleet Insurance?

Save money on Commercial Fleet Insurance for new commercial truck drivers

The importance of trucking on the economy

Canada’s trucking sector is critical to the success of Ontario’s economy. It transports over 90% of all food, consumer goods, and materials to consumers nationwide. Celyeste Power, President and CEO of IBC says of her company’s report findings. “The property and casualty insurance industry is working closely with the trucking sector to find solutions to some of the challenges it currently faces, including driver shortages and access to adequate training and risk management.” IBC commissioned MNP, a Canadian professional services firm, to identify factors driving up the insurance cost for truck operators. MNP reviewed driver training programs in various Canadian and international jurisdictions, offering proposals to improve training requirements.

The report found truck drivers with less than three years of experience are more likely to be involved in a crash.

The increased risk of a crash also means an increased risk in crash severity. Thus, claims costs for the insurer, the report finds. “Collisions involving heavy loads or dangerous goods tend to be more severe and have potential for greater damage. As a result, the level of required liability coverage increases when these goods are transported, affecting premiums,” the report finds.

Training for new commercial truck drivers: Commercial Insurance Coverage

Commercial auto coverage is typically more expensive because the risk is much higher for liability and property damage claims. Why? Because there is transporting people or goods for money involved. Several factors can impact insurance rates. However, businesses can keep their premiums low by not having many claims on record. Additionally, they can cut costs by employing experienced drivers and encouraging good driving habits through training courses. Some factors that are used to determine commercial rates are:

Number of vehicles
Vehicle type
Experience of drivers who will be covered by your policy
How the cars are stored at night
Alarm systems in the vehicles

Learn more about how auto insurance rates are calculated.

Truck drivers in Alberta, Ontario, and the Atlantic provinces with two or fewer years of driving experience were involved in between two and three collisions per 100 vehicles in 2022. In contrast, drivers with six years of experience got involved in about one crash per 100 vehicles.

What is the cost of commercial driver accident claims?

There is also the potential threat of litigation that drives up claim costs and premiums. “Premiums for vehicles traveling outside of Canada are impacted by exposure to excessive jury verdicts in the United States – court verdicts where juries award plaintiffs exceptionally high amounts,” the report states. This particularly affects truck drivers in Alberta. MNP goes on to show the impact of improved training on the reduction of claims costs for an inexperienced truck driver. The report goes on to further state that, “Reductions in claim costs would be reflected in adjustments to insurance premiums.”

Here’s how the severity of third-party claims differs with years of experience:

For truck drivers with driving records of one year or less, the average severity of a third-party collision liability claim hovers around the $30,000 mark.
For drivers with more than seven years of experience, the average severity of the third-party liability claim is closer to $10,000.
The additional frequency and severity of claims for inexperienced drivers means premiums for third-party liability coverage are higher for new commercial truck drivers than for experienced drivers – to the tune of almost $4,000 more per year.

In 2022, new commercial truck drivers with less than a year of experience paid an average annual insurance premium covering third-party liability of up to $5,000. While the cost may be high, it is important to note that it drops to just under $3,000 for new drivers with at least a year of experience. For drivers with seven years of experience, third-party liability premiums were below $1,000.

So, how can new commercial truck drivers avoid accidents and costly claims? The report makes several training and regulatory suggestions.

MNP’s Training and Regulation Suggestions

Although commercial trucking insurers have been saying that training programs and better regulatory practices are needed anecdotally for years, they have yet to be implemented. However, the new report by MNP shows the results of a thorough review of Canada’s training programs for new truck drivers. Mandatory Entry-Level Training (MELT) for new commercial truck drivers needs to be implemented across Canada. Trucking companies must follow this up with mentorship and onboarding programs. MELT training can cost anywhere between $10,000 and $15,000, making the program cost prohibitive. Financial aid may be required for new drivers to make the MELT training more accessible.

The report shows the results of a thorough review of Canada’s training programs for new truck drivers. MNP’s review contains several proposals to improve training and oversight. Insurers are hoping governments and trucking associations will take up its recommendations.

National Safety Code (NSC) standards for entry-level training of new drivers should be implemented across the country. “While most NSC standards have been implemented through regulation or legislation, implementation of NSC 16: Entry Level Training (Class 1) varies by jurisdiction,” the report says.

Of the seven provinces and three territories reviewed, three have mandatory training: Alberta, Ontario, and Northwest Territories. MELT has not yet been implemented in Quebec, Atlantic Canada, Yukon, and Nunavut.

A need for oversight and enforcement of standards: “There is inconsistency in how training is delivered, and not all schools provide training consistent with the defined standards,” the report says.
Governments improve regulatory oversight of training providers: “Increasing oversight and enforcement of training standards at driving schools offering commercial driver training can increase the quality and consistency of training,” MNP says.
Onboarding and Mentorship: Entry-level programs are intended to provide exposure to the industry and basic skills to pass the Class 1 test. The development of competent drivers requires onboarding and mentorship.
Ongoing learning: Periodic refreshers on safety and updates on new developments throughout a driver’s career are necessary.
Better enforce safety violations: Regulators need to better enforce safety violations that come up during roadside safety inspections, the MNP says.

What exactly is Fleet Insurance?

Any business that has more than a few vehicles on its books should consider fleet insurance as beneficial. It allows you to insure all vehicles under one policy rather than individually. You can either insure all drivers to all vehicles or assign named drivers.

Under a fleet insurance policy, the vehicles are insured rather than the individual drivers. This gives you greater flexibility over who can drive which vehicles. If a driver calls in sick, you can just assign another driver to their vehicle until they’ve returned. In short, commercial fleet insurance is a more affordable option for businesses than getting fleet vehicle insurance for each vehicle separately.

Save money on Commercial Fleet Insurance for new commercial truck drivers

Be sure to ask your isure broker about the discounts and deals available that may lower the premium you pay. Other ways to reduce the costs of your fleet insurance policy without reducing the coverage or giving it up are:

Ensure your fleet drivers have excellent driving records so you can get discounted rates.
Raise the deductible amount, but make sure that the business can afford the deductible amount at the time of a loss.
Purchasing all of your insurance policies via the same insurance provider can reduce overall premiums.
Installing anti-theft and safety equipment, maintaining safety standards, having GPS equipment, and being claims-free.
Enrolling drivers in safe driving classes can help keep fees down. It will also help reduce the risk of accidents.
Look for ways to reduce the amount of time you spend behind the wheel.
Implement risk management practices to prevent accidents and claims.
Using a usage-based insurance or telematics device to monitor and promote safe driving will help reduce your premiums.

If you own a large trucking company, there are many ways to manage costs. The MNP’s report on the need for better training for new commercial truck drivers can pay dividends over time in a reduction of claims costs. Additionally, the right fleet auto insurance can provide financial protection for your company. Should an accident occur involving one of your vehicles and/or employees, you will need commercial insurance for all the vehicles you use for business, even if it is only occasional. Fleet insurance policies vary from provider to provider, so make sure to go over all of the policy details with your isure broker.