Commercial Auto Insurance Premiums – What’s Going On?

commercial auto insuranceWhat’s Going On with Commercial Auto Insurance Rates in 2022



Have you seen the cost of your commercial auto insurance premiums go up over the past few years?

Curious what may be on the horizon?

In this video and post, we’re going to talk about the cost of commercial auto insurance and what to expect in commercial auto rates in 2022 and beyond.

So, whether you’re a contractor with a fleet of trucks, or are hauling goods for deliveries, or any other commercial business with a business auto or commercial auto policy, you’ve likely experienced rate increases over the last several years.

Unfortunately, it looks like we’ll continue to see rate increases into 2022.

The prediction is that rates will rise anywhere from 10 percent to 25 percent this year.

What’s driving these commercial auto insurance rate increases?

Well, there are several factors:

Liability lawsuit verdicts continue to rise, and something called nuclear verdicts is increasingly prevalent.

Nuclear verdicts are those where settlements exceed $10 million.

Those sorts of awards have frightened underwriters and insurers to the point of wanting to restrict writing new policies and increasing the costs of those they do write.

Second, on the list of problems is the driver shortage. This makes the news almost every day!

The trucking industry has a shortage of about 80,000 drivers nationwide for a variety of reasons. But, that shortage is forcing employers to lower their driver acceptability standards to fill open positions.

And that has and will continue to lead to more crashes.

The next biggest factor influencing costs is distracted driving. You would think by 2022 that we would have tackled this problem, but unfortunately, we haven’t.

Distracted driving accidents injure almost 400,000 people a year and cause an estimated $46 BILLION worth of damages and claims each year.

To top it all off are rising accident costs. Not just for physical repairs to vehicles, but also rising medical costs for injured parties

Roll it all up and you get fewer insurers willing to write commercial or business auto insurance, and those that do are charging higher and higher rates for it.

What can you do about it?

While there are fewer drivers available, we encourage you to have a strong posture relative to recruiting experienced drivers with good driving records.

If you’d like a copy of our driver eligibility matrix, let me know, I’d be happy to send it to you.

Now is the time to look at your risk control practices when it comes to your fleet auto.

What can you do to improve driver safety training? What are you doing to manage your fleet appropriately?

What can you do to reinforce the need for more focus and less distraction on the road?

Need help here? Let me know and we can provide you with some of our risk management resources specifically targeted to your issues.

Technology solutions

Have you considered Telematics for your fleet?

Telematics will help identify problem driving habits hopefully before they become serious accidents and can bolster training and your safety culture.

Accident Investigations

In addition to doing everything you can to prevent accidents, what are you doing to investigate those that do occur?

Good accident investigations help prevent future accidents and reinforce your company’s commitment to safety.

When it comes to Commercial Auto Insurance 

I’d recommend speaking to your broker at least 4 months prior to your business auto insurance renewal to understand and prepare for what may be happening with your rates.

Does your broker have wide access to the marketplace to solicit quotes from other underwriters?

If not, it may be time to speak to another broker who can not only access the marketplace but help you with solid risk control recommendations.

Here’s the bottom line

If you’re already doing a lot of the positive things I mentioned above to control risk in your company, you need to be selling that to your broker and your insurance company.

If you’ve got a written risk control plan for your fleet, a driver selection process you stick by, or a well-documented driver training plan then I recommend asking your broker to organize a zoom call or a physical visit with your insurer’s underwriter to your business.

This is so you can “show off” all the positive things you do to control risk.

This is your opportunity to differentiate your business from all the others that don’t take risk control seriously so you can achieve some rate relief.

This is more than window dressing

If you have all the documentation for safety, but no one is following the rules or if there is no accountability, and your claims are out of control, you’re probably not going to want to arrange that visit.

This is where the rubber meets the road and if you can’t demonstrate how you are different, you’ll probably not achieve great rate results.

The fact is, that in a troubled line of coverage like commercial auto, you’re going to get painted with the same rate increase brush as everyone else.

Unless you can demonstrate excellence in preventing claims now and into the future.

The more aggressive you are at safety, the more aggressive your underwriter can be in your pricing.

Need help with your Commercial Auto Insurance?

If you need help with safety and compliance in commercial auto and any other risk management area, let’s chat.

We’ve got a lot of expertise and resources to help you reduce and manage risk.


Leave a Comment