Rising Costs of Commercial Auto Liability Insurance in Trucking Sector

The American Transportation Research Institute (ATRI) has unveiled a pivotal study examining the rising costs linked to commercial auto liability insurance in the trucking sector. This report delves into the risk management strategies that motor carriers deploy to manage these expenses. According to Lynette Woodie, ArcBest's manager of loss prevention and administration, the analysis provides crucial insights into the evolving insurance landscape and highlights proactive measures taken by fleets to effectively manage insurance rates.

From 2021 to 2024, liability insurance premiums surged 18.6%, reaching 10.2 cents per mile, surpassing consumer inflation by 5.4 percentage points. Despite a 2.6% decline in crash rates involving heavy trucks, increased crash claims expenses significantly contributed to rising insurance costs. During the same period, liability losses per mile spiked by an average of 33.1%. Additionally, premium costs for excess insurance coverage increased sharply, with the $5-10 million coverage layer escalating 34% to 1.58 cents per mile, and the $10-15 million layer rising 45% to 1.05 cents per mile.

However, certain risk management strategies have yielded favorable results. Fleets that adopted higher retained risk in their primary coverage layer reported lower combined liability losses and premium costs, irrespective of fleet size. Moreover, fleets that reduced total purchased coverage experienced an average decrease of 2.4% in combined liability losses and premium expenses in inflation-adjusted terms the following year. The adoption of six specific safety technologies played a notable role in achieving lower per-mile liability losses. ATRI's report provides valuable benchmarks to help fleets evaluate industry trends and refine their risk management strategies, offering insights on coverage limits, insurance spending, and deductible or self-insurance levels by fleet size. For more information, interested parties can refer to the full study.