Overdrive Staff
- Watchers credited several factors — from inflation in equipment and medical costs to nuclear verdicts and pressure to settle suits — for an unprecedented rise in trucking insurance premiums.
- The FTC has concluded an investigation into truck OEMs’ Clean Truck Partnership with CARB; Nebraska’s AG dropped a suit challenging the partnership.
- Truck and trailer parts distributor TruckPro recently donated $115,000 to four charity organizations that it supports.
Numbers from the Bureau of Labor Statistics show insurance premiums for the commercial vehicle sector are at all-time highs — likely no surprise to owner-operators and small fleets.
Overdrive’s sister dealer publication Truck, Parts, Service recently offered an update on how soaring insurance costs are affecting truckers’ equipment purchases. In reporting from TPS’s Beth Colvin, analyst Avery Vise of FTR Transportation Intelligence credited several factors, including inflation, for rising trucking insurance costs.
“If you think about even liability insurance, hospitalization costs have gone up, the cost of vehicles have gone up,” Vise said. “If you’re in an accident and you damage a car or total a car, the cost of that goes up. The lost income goes up. You have the nuclear verdict issue, which is kind of its own issue, but you also have the fact that the actual cost to replace things to compensate has gone up.”
Insurance underwriters are also anticipating further inflation as a result of any future tariffs on trucks and truck parts, particularly from Mexico and Canada, which has led to some insurance increases since January, Colvin reported.
“They are expecting the spare parts to go up a lot because of the embedded tariffs,” even if those tariffs aren’t active yet, and even if not every replacement part is exposed, said Thom Albrecht, CFO and chief revenue officer for Reliance Partners.
Beyond nuclear verdicts, litigation in general is also spiking insurance costs, as verdicts and case settlements below “nuclear” levels are still higher than they have been in the past.
“Maybe five to seven years ago, a broken leg and lost wages might have represented $80,000 to $100,000,” Albrecht said. “We see the same claim settle [today] for $300,000 to $400,000.”
As a result, owner-operators and fleets are holding onto equipment longer than they maybe traditionally would have.
As reported earlier this year, there are ways for owners to ensure they are making the best case for themselves when it comes time for their insurance renewal.
