The transportation sector has been hit by rising insurance costs over the last several years. There are several reasons driving costs – from nuclear verdicts to high vehicle repair costs, driver shortages, and other issues. Let’s take a look at how some of these issues impact insurance premiums in the trucking industry.
Nuclear Verdicts
Nuclear verdicts, those $10 million and more, are driven by social inflation and an aggressive plaintiff bar. Social inflation refers to societal and behavioral shifts that drive up the cost of claims beyond the rate of traditional economic inflation. The increasing capacity of third-party litigation funding has become standard. This leads to larger jury verdicts and settlements, increased litigation, and higher insurance payouts, including punitive damages. We also have fewer experienced drivers on the road, leading to more frequent and more severe auto liability claims.
With higher and more frequent claims payouts, insurance companies have raised their rates, particularly for Commercial Auto and Excess Liability insurance.
Vehicle Repair Costs
Modern trucks are equipped with advanced technology, making the cost of parts and vehicle repairs more expensive for insurers when a claim is filed.
Underwriting Trends
Telematics is no longer just a competitive edge; it’s becoming a baseline expectation in both the Commercial Auto and Excess Liability insurance markets. Insurance companies now prioritize technology-driven risk assessment, meaning fleets that lack robust telematics may face limited market access and increased premiums. Telematics data gives underwriters a more detailed view of a fleet’s risk profile, allowing for more informed decisions. Common requirements include speed tracking, braking analysis, and, in many cases, video-based safety systems.
Insurer Capacity
Even in a difficult risk environment, market capacity remains strong, with private equity continuing to fund new entrants in the trucking sector. However, the added capacity has not translated into meaningful rate relief. Most insurers are still pushing for increases at renewal. Well-performing accounts are typically seeing single-digit to low double-digit hikes, while higher-risk fleets are facing increases of 10%–15% or more. In addition, many carriers are restructuring their per-unit auto rates, driving notable shifts—particularly for heavy units, where rates have risen sharply in response to loss experience.
Despite these challenges, there are opportunities for trucking firms to see more favorable rates. A strong safety culture is critical in having a positive risk profile, and adopting the latest in technology (including telematics) also plays a role in pricing.
About Western Truck
Western Truck Insurance Services is an insurance brokerage specializing in commercial truck insurance. We know this stuff and want to make sure you do, too. Our clients appreciate our dedication to finding competitive rates and providing unparalleled service, complemented by excellent insurance options. They also value how our state-of-the-art automation provides lightning-fast truck insurance quotes, customer service, insurance certificates, and coverage changes. Contact us today at (800) 937-8785 to learn more.