Trucking Insurance Market Overview

Property & Casualty

Trucking Insurance Market Overview

Since 2020, rates in the trucking insurance marketplace have been widely varied due to outside factors. Inflation, nuclear verdicts, increased technology, and the lack of available drivers continues to drive costs. Rates for long-haul trucking for positive accounts, such as those with no Central Analysis Bureau (CAB) alerts, good loss history and sound drivers, can be as low as $6,000 per unit. Poor accounts or new ventures that want high growth can top $30,000 per unit for a combined $1M single limit depending on the state.  

A lack of Commercial Driver’s License (CDL) experience can also drive higher rates. It is estimated that 80,000 driver positions need to be filled to meet the current market demand, growing to 130,000 by 2030. Because of this, trucking companies have tried to fill these gaps by hiring drivers with less than the required two-year minimum of CDL experience. While some insurance carriers allow this, they tend to charge a higher rate for those drivers.  

For renewals, rates can vary from flat to 9% increases, and physical damage is no longer as profitable as in past years. AM Best anticipates the commercial auto-loss ratio to reach 103% in 2022. This would mean that for every dollar an insurance company collects, they are paying $1.03 in claims. As inflation continues to rise, this could further impact rates as insurers leave the trucking space and re-insurers are hit with losses for all other lines of coverage. 

  • The good news? There are steps trucking companies can take to help control their insurance costs. Allowing insurance companies access to telematics has provided some relief and has given those companies more flexibility on pricing.  
  • Implementing a driver scorecard with an incentive program could encourage drivers to practice safe driving and be mindful of their speed, hard braking and sharp turns.  
  • Creating and abiding by a formal driver recruitment plan. If a trucking company intends to hire someone with lower experience, try to pair them with a more experienced driver. 
  • Paying closer attention to Motor Vehicle Records M(VRs). Lawyers are using MVRs to attempt to prove negligence in hiring practices. 

Higher liability deductibles or captive programs have the most significant impact when trying to take control of trucking insurance programs. Captives can provide under a 5% increase or a possible decrease for year-over-year rates. This trend is dependent on claims with the opportunity to recoup premiums after a few years—an area where traditional insurance programs have not been successful. 

Brown & Brown has a team of trucking specialists that can help answer your questions and develop a plan of action that can lead you to success. Contact us today.

Property & Casualty Team

DISCLAIMER: Brown & Brown, Inc. and all its affiliates, do not provide legal, regulatory or tax guidance, or advice. If legal advice counsel or representation is needed, the services of a legal professional should be sought. The information in this document is intended to provide a general overview of the topics and services contained herein. Brown & Brown, Inc. and all its affiliates, make no representation or warranty as to the accuracy or completeness of the document and undertakes no obligation to update or revise the document based upon new information or future changes.