You work hard to promote safety in your trucking business. You’re managing both the risk and the cost of insuring that risk. You’ve successfully avoided accidents and kept your driving record clean. To save money, you may have decreased the coverage on your liability insurance and increased the deductible you’ll pay in the event of a claim.
Despite everything you’ve done, the cost of your auto liability insurance has increased. A recent study by the American Transportation Research Institute (ATRI) found that industry-average liability premiums rose 37.8% over the decade between 2015 and 2024, outpacing inflation by 4.4%.
At the same time, carriers lowered their overall coverage, assuming more risk for themselves. They also increased their deductibles and implemented training and technology that reduced the number of claims against them.
Still, the rates went up
The ATRI report, “Trucking’s Rising Insurance Costs: Issues and Opportunities,” noted that their annual survey identified the cost and availability of insurance as the trucking industry’s third most pressing issue, behind the economy and lawsuit abuse.
During the decade-long research period, heavy-duty truck-involved injury and fatal crashes per 100 million miles decreased by 8.4%. While the industry succeeded in reducing crashes, insurance premiums rose by an average of 8.3% per year. The insurers collecting the extra premium dollars, however, weren’t making money. In fact, A.M. Best, a credit rating agency that specializes in the insurance industry, noted that liability insurance lines were unprofitable for insurance companies in the same decade that premiums were rising precipitously.
How does the insurance industry raise premiums while paying out fewer claims and still lose money? For the most part, it’s happening in the courtroom. Those high-profile, higher-dollar lawsuit payouts are disastrous for trucking and the insurance industry alike. The ATRI report claimed that large litigation payouts have been rising at an annual rate of 5.7% over the past decade. That’s nearly three times the average inflation rate.
Are healthcare costs also to blame?
Another reason for increased liability insurance is the increased cost of healthcare. Liability insurance generally covers the medical expenses of claimants. As those expenses rise, payouts for litigation rise, too.
If you own and operate a small trucking business, you’ll pay more per mile for liability insurance than larger carriers do. According to the ATRI study, fleets with over 1,000 trucks spent an average of 2% of their 2024 revenue for liability premiums, while fleets with 100 or fewer trucks averaged 4.8%, nearly 2.5 times as much. The study noted that fleets with 5 to 25 trucks averaged 20.3 cents per mile for insurance costs, while fleets with 101-250 averaged 10.4 cents per mile. One reason for this is the size of deductible amounts. A larger fleet may be able to absorb $100,000 or more of cost before insurance kicks in. A smaller fleet may find that amount devastating. Large fleets may also choose to self-insure to certain amounts, with some paying up to $1 million or more before insurance kicks in.
What about safety programs?
Another reason for lower premiums that can’t be overlooked is carrier safety programs. Larger carriers invest in training, either teaching their own drivers through safety classes or contracting with vendors who provide online courses. They also invest in technology, utilizing in-cab video as well as purchasing trucks with the latest advanced driver assistance systems (ADAS). These systems, such as automatic braking and lane departure warnings, help prevent accidents.
Independent carriers aren’t necessarily excluded from these practices, however. Providers of online training often have no minimum subscriber limit, so that even a single owner-operator can participate in safety training. Providers can even provide documentation of which courses were taken as well as evaluation scores. Dash cameras are available, too. Independent versions available at truck stops may be helpful, but the larger providers may accept single subscriptions and offer monitoring services as well as training options. The ATRI study showed that 68% of participating fleets deployed road-facing cameras in 2024, while 32% used driver-facing cameras.
Smaller, independent carriers are more likely to purchase older, used equipment that may not have the safety features of newer trucks. It’s important to understand that spending a few more dollars on a truck may pay off in savings on liability insurance as well as in increased fuel efficiency.
Another action that can increase insurance rates is to change operating conditions. An independent contractor who decides to terminate a lease agreement and obtain their own authority is viewed by the insurance industry as a brand-new operation, no matter how many years they operated safely while leased to another carrier. In some cases, owners switch back and forth, leasing to carriers for the steady revenue when the freight market is tough, then running under their own authority when times are better. The problem with this approach is that the owner cancels their liability coverage each time they lease to someone else. When they restart their insurance to strike out on their own again, they are treated as a brand-new carrier.
Larger carriers can hire experts to help them navigate safety and insurance hurdles, but that doesn’t mean small carriers can’t benefit, too. When it comes to insurance, find an agent who can advise you of best practices and can shop your specific needs to multiple companies. Insurance carriers can be very specific about who they’ll insure. Some won’t work with newer carriers while others may exclude small carriers. Rates can change based on mileage and even the states you run in. While any agent can sell you a policy, you’ll want to find one that will work with you to minimize your safety risks while finding the insurer that is the best fit for your operation.
If your small trucking business depends on hiring drivers, you’ll want to maintain high standards. Insurance carriers consider driving records and other data when determining rates. The wrong hire can cost you in insurance premiums and cost even more in the event of an accident.
While tort reform has been discussed for years, lawsuit payouts continue rising and pulling insurance rates upward. Seek the best advice you can, and stay safe.
Cliff Abbott is an experienced commercial vehicle driver and owner-operator who still holds a CDL in his home state of Alabama. In nearly 40 years in trucking, he’s been an instructor and trainer and has managed safety and recruiting operations for several carriers. Having never lost his love of the road, Cliff has written a book and hundreds of songs and has been writing for The Trucker for more than a decade.
