Rising Trends in Commercial Auto Liability Insurance Premiums
The American Transportation Research Institute (ATRI) has released a pivotal study highlighting the rising trend in commercial auto liability insurance premiums within the trucking sector. The report further examines the risk management strategies that motor carriers are adopting to mitigate these escalating costs.
Between 2021 and 2024, liability insurance premium expenses surged by 18.6%, reaching 10.2 cents per mile. This increase outpaced consumer inflation rates by 5.4 percentage points, even as the occurrence of crashes involving heavy-duty trucks declined by 2.6%. The study attributes this rise in insurance costs primarily to a substantial increase in crash claims expenses, with respondents reporting a 33.1% average surge in per-mile liability losses during this timeframe.
Premiums for excess coverage exhibited even steeper climbs. Specifically, the $5-10 million insurance layer saw a 34% increase to 1.58 cents per mile, while the $10-15 million layer jumped by 45% to 1.05 cents per mile. These increases are linked to heightened litigation costs, which have driven up claims expenses substantially.
Risk management strategies implemented during this period proved beneficial. Fleets that took on more risk within their primary coverage reported lower overall liability losses and premium expenses, regardless of fleet size. Those reducing their total purchased coverage experienced an average 2.4% decrease in combined liability losses and premium costs, adjusted for inflation over the subsequent year. This improvement was largely due to reduced premiums and proactive safety measures, notably the use of six specific safety technologies that significantly decreased per-mile liability losses.
The report offers benchmarks for fleets to analyze industry trends and refine their risk management approaches. These include evaluating coverage limits, insurance expenditures as a percentage of revenue, and assessing deductible or self-insurance levels based on fleet size.
"ATRI's report provides invaluable insights into the shifting liability insurance landscape and how fleets are navigating these changes," stated Lynette Woodie, ArcBest's Manager of Loss Prevention and Administration. "Proactive fleets don't merely react to annual rate increases; they take initiative by analyzing data and collaborating closely with insurers to develop comprehensive risk management plans that enhance safety and cut costs."
The complete report is available on ATRI's website. As a non-profit research organization for the trucking industry, ATRI plays a crucial role in conducting research critical to the freight transportation sector's contribution to a safe, secure, and efficient transportation system.