What Causes Commercial Truck Insurance Rates to Increase?

"Why is trucking insurance so expensive right now?" 

The truth is that commercial trucking insurance costs have increased dramatically over the last several years. Many owner-operators are shocked when they receive renewal quotes that are thousands of dollars higher than expected. 

Unfortunately, this is happening across the entire trucking industry, and there are several major reasons why rates continue to rise.

 

Accidents and Claims Are More Expensive Than Ever

Insurance companies are paying out larger claims today than they were just a few years ago. 

Medical bills have increased significantly, vehicle repair costs are much higher, and lawsuit settlements continue to grow. Even a relatively small accident involving a commercial truck can quickly turn into a very expensive claim. 

In serious accidents, insurance companies may end up paying hundreds of thousands — or even millions — of dollars in damages, medical expenses, and legal fees. 

Because of these rising claim costs, insurance carriers have tightened underwriting guidelines and raised premiums across the trucking industry.

 

Nuclear Verdicts Are Impacting the Trucking Industry

Another major reason trucking insurance costs are rising is because of what the industry calls "nuclear verdicts." 

These are extremely large lawsuit settlements awarded against trucking companies after serious accidents. In some cases, juries have awarded multi-million-dollar settlements that far exceed what insurance companies previously expected to pay. 

As a result, many insurance carriers now view trucking as a higher-risk industry than ever before. 

That increased risk leads directly to higher premiums for trucking companies across the country.

 

Your Driving Record Plays a Huge Role

Your motor vehicle record is one of the biggest factors insurance companies consider when calculating your premium. 

Violations such as: 

• Speeding tickets 
• Reckless driving 
• Accidents 
• D.U.I.s 
• Failed inspections 
• Hours-of-service violations 

can significantly increase your insurance costs. 

Even one incident can sometimes cause insurance companies to dramatically raise rates or decline coverage altogether. 

Insurance companies want to insure drivers who demonstrate safe and consistent driving habits over time.

 

New Ventures Usually Pay Higher Rates

If you recently started your own trucking company or received new authority, your insurance costs will almost always be higher during the first year. 

Why? 

Because insurance companies consider new ventures riskier. Even if you have years of CDL experience, underwriters still look at the age of your business and MC authority. 

Without operating history, insurance carriers have less data to evaluate risk. 

The good news is that maintaining a clean driving record, avoiding claims, and operating safely can help lower your costs over time. 

After your first year in business, additional insurance companies may become available, which can create more competitive pricing.

 

The Type of Freight You Haul Matters

Not all trucking operations are viewed the same by insurance companies. Certain types of freight and operations carry more risk than others, including:

• Long-haul trucking 
• Hotshot trucking 
• Refrigerated freight 
• Hazardous materials 
• Oversized loads 
• High-value cargo 

The radius you travel, the states you operate in, and how often your trucks are on the road can also affect your premium. 

For example, operating in highly congested areas or states with higher claim activity may increase your insurance costs.

 

Truck Values and Repair Costs Continue to Rise

Commercial trucks today are more advanced and expensive than ever before. Modern trucks contain: 

• Advanced safety technology 
• Collision avoidance systems 
• Sensors and cameras 
• Electronic logging systems 
• Expensive engine components 

While these technologies can improve safety, they also make repairs more expensive after accidents. 

Even minor damage can result in large repair bills, which insurance companies must account for when pricing policies.

 

Insurance Markets Change Constantly

Many truck drivers do not realize that insurance pricing is heavily influenced by the overall insurance market. 

When insurance companies experience large underwriting losses across the trucking industry, they often: 

• Increase premiums
• Tighten eligibility requirements 
• Reduce coverage availability 
• Become more selective with risks 

This is known as a "hard insurance market," and trucking has been experiencing one for several years.

 

We Shop Multiple Insurance Companies for You

At Tailored Insurance Group, we understand how frustrating high trucking insurance costs can be. 

That is why we work with multiple insurance companies to help owner-operators and fleets find the best possible rate for their specific operation. 

Not every insurance company evaluates risk the same way. One carrier may decline a risk, while another may offer significantly better pricing. 

Our goal is to help trucking companies: 

• Save time 
• Compare multiple options 
• Find affordable coverage 
• Stay compliant 
• Protect their business 

If your trucking insurance renewal shocked you or you are tired of rising premiums, reach out to us today for a quote or policy review. 

We are here to help keep your business moving forward. 

God bless and keep on trucking.