Navigating Rising Commercial Truck Insurance Costs: Beyond Safety and Coverage

The Pre-Pandemic Trend of Rising Premiums

Commercial truck insurance premiums have been on an upward trajectory even before the pandemic disrupted the economy and supply chains. According to the American Transportation Research Institute (ATRI), despite reductions in insurance coverage, rising deductibles, and improved safety measures, almost all motor carriers saw substantial increases in insurance costs from 2018 to 2020. This trend is further exacerbated by the fact that insurance cost increases during this period far exceeded the crash rate increase, as noted by ATRI.

The Role of Social Inflation in Premium Increases

A recent study by Triple-I and the Casualty Actuarial Society (CAS) highlights that 'social inflation' accounted for $20 billion in commercial auto liability claims between 2010 and 2019. This phenomenon, driven by external factors beyond carrier safety, forces commercial trucking insurance costs to rise, ultimately affecting consumers through higher prices for goods and services. ATRI identifies three key areas influencing premiums beyond crash history and policy components: economic impacts on the insurance industry, carrier-specific factors, and social inflation.

Strategies for Managing Rising Costs

While external economic conditions, such as general inflation and rising health-care costs, contribute to increased insurance premium rates, carriers can mitigate these effects through specific operational strategies. Carriers demonstrating consistent year-over-year improvements in safety technology adoption, safe driver hiring and training practices, and crash history can potentially lower their premium costs. Additionally, understanding and addressing the impact of social inflation through litigation and government policy trends can help in managing insurance claims and costs.

For readers, it's crucial to stay informed about the factors influencing commercial truck insurance premiums and to explore strategies that carriers can adopt to manage these rising costs. Engaging with industry reports and studies, such as those from ATRI and Triple-I, can provide valuable insights into the current trends and potential solutions.