Why Your Commercial Auto Insurance Is Increasing
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
Hired and Non-Owned Auto Liability Best Practices
As a business you may rely on your employees to run errands on your behalf, visit customers or clients, or even rent vehicles for business purposes.
Consider this, a business has outside sales reps driving their own personal vehicles to make sales calls and visit customers.
One salesperson was driving their vehicle to visit a customer when she hit the stopped car in front of her at an intersection. The sales rep was cited for the accident. A lawsuit was filed by the injured party naming both the salesperson and her employer as defendants.
The salesperson’s personal auto carrier provided defense for her and the businesses hired and non owned auto insurance coverage provided defense on behalf of the business/her employer.
Now consider this, before you sent the salesperson out to the sales appointment on behalf of your company, you did not take the time to make sure that your employee had adequate personal auto insurance.
The driver of the vehicle your employee struck suffers major injuries and will require significant medical and therapeutic treatment and your employee driver does not have the personal auto liability limits to help cover the injured parties medical expenses.
Many states have requirements when it comes to having personal auto insurance but what practices and requirements should your organization have in place to adequately protect you from financial and reputational loss?
Here are four ways to make this safe play to help protect your organization and your drivers:
1- Create a plan for running motor vehicle records or MVR’s. The plans should require that you:
- Run MVR’s at the time of hire or before you allow an employee to drive on your company’s behalf.
- Run MVR’s at least annually for employees that drive regularly.
- If your organization participates in a monitored driver safety program MVRs should also be obtained on drivers who exhibit repeat driving offenses.
2- Determine MVR acceptability. In general, drivers with more than two minor moving violations in the last three years or drivers with any major moving violations in the last five years should be considered ineligible.
3- Verify adequate personal insurance limits at least annually. All drivers who drive their vehicles on your behalf should maintain the insurance limits of at least 100/300 thousand personal auto liability limits.
4- Train your staff on appropriate driving behaviors. Your specific training needs depend on vehicle type, use, and frequency but all drivers that drive on your behalf should receive annual distracted driving training at a very minimum.
Help make your employee drivers safer on the road so you can maintain focus on your businesses primary mission. A simple company errand or routine driving by employees on behalf of your company can be a major risk exposure for your business.
Need help developing a Hired and Non-Owned Auto Liability Best Practices plan for your business? Contact me today for resources.
2023 Distracted Driving for Business [Infographic]
The 2023 Travelers Risk Index finds that employees use their phones when they are behind the wheel, which may contribute to distracted driving behaviors.
In fact, most employers (87%) expect their employees to respond to work-related messages when they are out of the office during work hours.
And 44% of employees who take work-related calls while driving do so because they believe they always need to be available for work.
Business managers can help PUT A STOP to this dangerous behavior by communicating and reinforcing driving policies, speaking up when a colleague is driving distracted, and not calling employees when they know they are behind the wheel.
This is a huge liability for any company with vehicles on the road!
According to the National Highway Transportation Safety Association, the total economic impact of motor vehicle accidents was $340 billion in 2019, the equivalent of approximately $1,035 for every person living in the United States. Here’s a look at key findings from the 2023 Travelers Risk Index and how a distracted driving policy can help businesses.
California DMV Employer Pull Notice (EPN) Program
Any business with job positions that require employees to operate company owned, leased or personal vehicles for business use faces a heightened liability risk.
One small distraction behind the wheel can lead to a serious accident causing injury or death to others. Or, a not so serious accident with someone who sees “deep pockets” because they were hit by a vehicle operated by a business can lead to a large defense claim.
Think about it, you constantly hear personal injury attorney advertisements on the airwaves encouraging people who have been hit by commercial vehicles to call them because “big money can be at stake.”
What this means is your business must have a Motor Vehicle Record (MVR) Program in its driver qualification and selection process.
Without going into full scale detail about MVR programs in this post, businesses should, at a minimum, require applicants for driving positions, to submit a copy of their driving record as part of the application process. Additionally, require drivers to provide updated MVRs on an annual basis to evaluate driving performance and qualify them for continued operation of company owned and/or leased vehicles.
Drivers that received violations and/or were involved in preventable vehicle incidents may need training, counseling or other appropriate actions to correct poor driving behaviors.
This is where the the California DMV Employer Pull Notice (EPN) program comes in to play.
The California DMV Employer Pull Notice (EPN) program enables commercial organizations to monitor the driving records of employees who drive for them. By monitoring their employees’ driving records, organizations can:
- Ensure that each driver has a valid driver license.
- Recognize problem drivers or driving behavior.
- Improve public safety.
- Minimize liability.
How it Works:
Each employer enrolled in the EPN program is assigned a requester code. The requester code is added to applicable employees’ driver license records. When an employee’s driver license record is updated due to an action or activity, the DMV makes an electronic check to determine if a pull notice is on file. If the action or activity is one that must be reported under the EPN program, a driver record is generated and mailed to the employer.
Every year on the enrollment date, the EPN program automatically generates and mails a driver record when any of the following actions or activities occurs:
- The driver is enrolled in the EPN program.
- When a driver has any of the following actions or activities added to their driver record:
- Convictions.
- Failures to appear (FTAs).
- Accidents.
- Driver license suspensions or revocations.
- Any other actions taken against their driving privilege.
With the potential risk your business faces by having owned, leased or personal vehicles on the road, now is the time to put any and all risk management practices into place to to help lessen the likelihood of a loss. And the California DMV Employer Pull Notice (EPN) program is a great starting point. Check it out for yourself and contact me if you need any help with this.
-JK
The U.S. Is seeing Some of the Largest Increases in Auto Accidents in More Than 50 years…
…And commercial auto insurance rates are spiking hard as a result. Carriers are backing down on coverage and most are putting some serious restrictions on their appetites.
See Property Casualty Insurers Association of America’s (PCI) 7 summer driving safety tips:
Also, see more from Hanover on why auto insurance rates are rising so dramatically:
-JK
Commercial Auto Insurance Prices Likely to Keep Rising
Most lines of insurance cycle between soft and hard markets over a number of years, which has a direct impact on the price of insurance. The commercial auto insurance market is currently hardening after many years of a soft market, which has resulted in higher prices for both commercial and personal auto policies.
Between 2011 and 2016, competition between auto insurance carriers created a soft, buyer-friendly market. Since then, however, the high cost of claims and increasing costs of vehicle repairs have contributed to a noticeable transition in the market.
Contact me today. I can provide you with resources to help you understand and save on commercial auto insurance, including this prior post, “California Commercial Auto Insurance – Losses & Costs Rising.”
-JK
California Commercial Auto Insurance – Losses & Costs Rising
Right now there are industry-wide challenges with increasing loss costs in commercial and personal auto insurance, particularly in California. If you have a commercial auto insurance policy for your business, you’re probably seeing your premiums increase. If not, you can expect to. I’ve been seeing it with pretty much all major insurance carriers on the market. We’ve been having to shop coverage for clients like crazy due to the steep premium increases.
California Commercial Auto – What’s Driving Losses?
More traffic: Total miles driven increased 50 percent faster in California than in the rest of the country since the start of 2015. More vehicles = higher frequency of accidents.
Distracted drivers: One-quarter of crashes involve drivers talking on phones or texting.
Escalating medical costs: Medical care costs are climbing more than 1.5 times faster than other costs.
More fatalities and other severe accidents: Accident rates per person and per mile
of driving are rising in California.
Inexperienced or undesirable drivers: A shortage of skilled commercial drivers with good driving records = greater odds for accidents.
Rising auto repair costs: Record U.S. auto sales mean garages are often servicing newer cars with more expensive parts. Even minor repairs can cost big bucks.
What you can do to help ease your commercial auto insurance loss costs?
- Implement a fleet safety program and follow proper fleet maintenance procedures.
- Enforce company policy for use of company vehicles (e.g., limitation on personal use, who can use company vehicles, hours of operation, etc.).
- Regularly check employees’ driving records and take appropriate action driving records are not acceptable.
- Use telematic devices to monitor employee driving habits and usage of company vehicles.
- Be aware of the risks involved with employees using their personal vehicles on the job.
- Provide Driver Safety Training for their employees. Important topics include, but are not limited to: Distracted Driving; Speeding; DUI; Need for Rest; What to do if your vehicle breaks down, etc.
Need help with these things? Contact me today. Buying a commercial auto policy is one thing, but implementing these risk management procedures along with the policy can help your business tremendously with costs.
-JK
Powerful Driving-Safety Ad
This powerful and simple driving safety advertisement from the New Zealand Transport Agency will really make you think about speeding and will probably give you some serious goosebumps when you watch it.
From Mashable: the public-service announcement dissects an accident by freezing the moment before impact. A man who pulled out of an intersection too fast pleads for his life and that of his son. The request falls on deaf ears, though. “I’m going too fast,” replies the driver of the oncoming car. The point: Other drivers make mistakes, too, so be careful.
Take a look for yourself:
Be careful out there and make sure you think of others first before yourself when you’re running late for that party, for work, or wherever else you’re trying get to. Give yourself plenty of time so that you’re not putting yourself in the situation where you feel the need to speed.
-JK
New High-tech Auto Theft Device Showing Up In The U.S.
From Long Beach, CA to Chicago, IL, thieves with no keys are breaking into automobiles with mysterious new high-tech hand-held box device. It appears this is the latest high-tech crime tool as cars have become “rolling computers.” Check out this news piece from CNN which was originally published on 6/21/13.
According to the California Highway Patrol, there were more than 700,000 auto thefts nationwide in 2011, with 156,796 occurring in California, the most for any state.
It’s important to know what to do if your vehicle is stolen. Here are a few suggestions:
1 – The best offense is a good defense. Consider purchasing comprehensive car insurance, which covers your vehicle if it is damaged in anything other than a collision. This includes auto theft, vandalism, floods, hailstorms and fire damage.
2 – Contact police immediately if your vehicle is stolen and file a report. The chances of recovering a stolen vehicle decreases as time passes.
3 – Be sure to have the following information when filing a claim with your insurance carrier:
- Policy number
- When and where you last saw your car (date, time and location)
- Year, make and model
- Vehicle identification number
- License plate number
- Police report number
4 – Be sure to list any additional valuables that were in your car at the time it was stolen.
5 – Offer photos of your car, if possible, to the police and your claims adjuster.
-JK
Drunk Driver Nearly Causes Multiple Accidents – Ends Up Crashing
Check out this cliff-hanger video. This drunk driver nearly causes multiple accidents but ends up crashing and putting his/her own life in jeopardy. Some tense moments on this two lane highway!
According to Mothers Against Drunk Driving (MADD), out of every three traffic deaths involve drunk driving. Every 53 minutes on average, someone is killed in a drunk driving crash (9,878 people in total in 2011). Every 90 seconds, someone is injured because of this entirely preventable crime.
About one-third of the drunk driving problem – arrests, crashes, deaths, and injuries – comes from repeat offenders. At any given point we potentially share the roads with 2 million people with three or more drunk driving offenses.
What to do when you spot an Impaired Driver
- Stay far behind the suspected drunk driver.
- Get out of the way and expect the unexpected.
- Wear your safety belt (and make sure that any children or other passengers have their safety belts fastened as well) – It is one of your best defenses against a drunk driver.
- Stop right away and look for a phone.
- Report suspected and impaired drivers to the California Highway Patrol or local police by dialing 911. Give the location, direction of travel, and description of the car and driver’s behavior.
What NOT to do when you spot an Impaired Driver
- Do not try to pass the car!
- Do not try to stop the vehicle.
- Do not follow too closely. The car may stop abruptly.
- Do not attempt to act in the capacity of the police.
- Do not try to detain or confront the driver.
- Call the local police or 911 and let them take care of it!
Most of the time, the signs of a drunk driver aren’t as obvious as the white Ranger in this video. Stay alert on the roads out there!
–JK
About Me
I grew up in Fullerton, CA and graduated from Servite High School in Anaheim. I have my Bachelors degree from Loyola Marymount University in Los Angeles. I currently live in Tustin, CA.
Please contact me if you need help with any of the following lines of insurance for your business:
-Cyber / Data Breach
-Commercial Property
-Commercial General Liability
-Products Liability
-Workers Compensation
-Commercial Auto
-Umbrella/Excess Liability
-Errors & Omissions/ Professional Liability
-Employment Practices Liability
-Directors & Officers
-Life & Disability Insurance
Jimmy Kinmartin, CPCU 