If your business owns or operates company vehicles, you’ve definitely seen your commercial auto insurance premiums rise in recent years. Whether you have a a few vans for deliveries, many service trucks, or a small sales fleet, your business is not immune to the rising commercial auto insurance costs.

You’re not alone. Across the country, insurers are reporting double-digit increases driven by several economic and behavioral trends. But understanding why rates are rising is important. Knowing what you can do to control your costs is crucial. This knowledge can make a big difference for your bottom line.

Here’s what’s driving 2025’s auto insurance market, based on Travelers’ recent analysis of national trends.

1. The Cost of Accidents Keeps Rising

Medical costs, vehicle repair costs, and legal expenses have all climbed sharply. Even a minor fender-bender now costs thousands more to settle than it did a few years ago.

What you can do:

• Make driver safety a non-negotiable part of your business culture.
• Review your loss-control programs regularly.
• Implement driver training and enforce policies for seatbelt use, mobile phone restrictions, and safe following distances.

2. Lawsuits Are Bigger and More Frequent

“Nuclear verdicts” — jury awards exceeding $10 million — are now more common. Even small claims often involve higher legal fees and settlements.

What you can do:

• Make sure your liability limits are sufficient; a $1M policy might not go as far as it once did.
• Consider adding an umbrella policy to protect against catastrophic claims.
• Document all driver training, vehicle inspections, and maintenance — this can be critical in defending a claim.

3. Distracted Driving Is a Growing Problem

Cell phones, dashboard screens, and in-cab tech have created more opportunities for driver distraction. Even one distracted-driving claim can significantly impact future premiums.

What you can do:

• Adopt a written distracted-driving policy — and enforce it.
• Use telematics or driver-monitoring tools to track unsafe behavior.
• Reward safe driving performance and make accountability part of your company culture.

4. Newer, Less-Experienced Drivers Mean More Risk

The national driver shortage has forced many businesses to hire younger, less-experienced drivers. Unfortunately, accident data shows that inexperience leads to more claims.

What you can do:

• Require new hires to complete safety orientation before driving company vehicles.
• Pair newer drivers with seasoned employees for mentorship.
• Review MVRs (motor vehicle records) regularly and establish clear standards for eligibility.

5. Vehicle Repair and Replacement Costs Have Soared

From supply-chain disruptions to advanced vehicle technology, repairs are simply more expensive. A cracked sensor-filled bumper can cost thousands to replace — and insurance reflects that.

What you can do:

• Keep vehicles well-maintained and up-to-date with safety systems.
• Install anti-theft devices to deter catalytic converter theft.
• Evaluate whether certain vehicles should be replaced or removed from service.

6. Third-Party Drivers Can Create Hidden Liability

If your company uses contractors, delivery partners, or outside carriers, you could be held responsible if they’re involved in an accident. This is true even if you don’t directly employ them.

What you can do:

• Verify that all vendors and contractors carry proper insurance.
• Require certificates of insurance and written hold-harmless agreements.
• Review contracts annually to ensure you’re protected from vicarious liability.

How to Take Control of Your Auto Insurance Costs

You can’t control market inflation or national loss trends — but you can control how your business manages risk. Insurers reward companies that demonstrate strong safety programs, driver accountability, and proactive fleet management.

Here’s how to start:

• Review your coverage limits and deductibles annually.
• Implement or update your driver safety program.
• Track claims trends and address root causes early.
• Work with a broker who can advocate for your business and negotiate terms based on real risk improvements.

Final Thoughts

Commercial auto insurance is one of the most volatile segments in today’s market. However, informed and proactive business owners can keep costs in check. If your company operates vehicles or relies on drivers to serve clients, now is the time to strengthen your risk management approach.

Contact me to discuss ways to reduce your exposure. This will put you in a stronger position for your next renewal.

-JK