6 Commercial Auto Insurance Trends Driving the Second Half of 2024

Commercial auto insurance plays an essential role in protecting an organization’s drivers and vehicles, providing coverage for property damage, bodily injuries and liability from road accidents. Yet, this insurance sector has been tough for a decade, with rising rates, limited options and challenging market conditions.

Let's explore the newest 2024 trends impacting the commercial auto insurance landscape.

1. Increased Vehicle Repair Costs

Technological advancements have made vehicles safer and more efficient. However, as commercial vehicles are outfitted with a variety of sophisticated features, they’re becoming increasingly expensive to repair. Furthermore, ongoing supply chain issues and increased demand for certain components have led to inflated prices for vehicle parts. Auto repair shops are also facing staff shortages for skilled positions, thus exacerbating labor costs for vehicle repairs.

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2. Rising Vehicle Replacement Expenses

The market for new and used vehicles, especially commercial vehicles, has seen sharp price increases in recent years. The costs of new and used vehicles are still near record highs. In fact, according to automotive research company  Kelley Blue Book, the price of new vehicles has risen by 28% since the beginning of 2020. These factors impact the overall cost of insurance claims when vehicles need to be fully replaced.

3. Surging Nuclear Verdicts

Nuclear verdicts refer to exceptionally high jury awards — generally, those exceeding $10 million. Such verdicts have climbed over the past decade. The Insurance Information Institute recently reported that the combination of social inflation and nuclear verdicts has led to a $30 billion surge in commercial auto claim costs since 2012. Consequently, insurers have to factor in nuclear verdicts when they price  commercial auto insurance policies, prompting higher rates.

4. Continued Driver Shortages

The nation’s commercial driver shortage is forecast to reach a record high of 82,000 in 2024, according to the American Trucking Associations (ATA). To minimize this shortage, some businesses have adjusted their driver attraction strategies. Yet, many businesses have had to lower their applicant standards to fill open positions. These drivers often have less experience, making them more likely to be involved in accidents and compounding commercial auto losses. Prioritizing  new driver training  can help.

5. Distracted Driving Concerns

While many factors can lead to accidents on the road,  distracted driving  is one of the most common concerns. As these incidents have become more frequent, commercial auto insurance rates have climbed in tandem, creating risk management challenges and posing profitability issues for insurers across the market.

6. Elevated Medical Costs

Medical costs have been increasing for some time. According to industry data, losses for bodily injury claims have jumped by 10% in the past five years. These rising costs have affected multiple lines of insurance, including the commercial auto sector. It’s not uncommon for the injuries of those involved in accidents to require multiple doctor visits or even surgeries, which can extend recovery time and influence the costs of related claims. These surging liability expenses have been incorporated within the price of commercial auto insurance

Commercial Auto Coverage for Your Adventure Sports Business

Any car, truck, van or similar vehicle used as part of your operations must be covered. It’s crucial to stay up to date on current developments impacting this line of coverage and work with your insurance professional to secure the right policy for your business. For additional risk management guidance and insurance solutions for your business,  request a free CBIZ Adventure Sport Insurance quote  today.

This blog may contain scenarios that are provided as examples only. In an actual claim situation, coverage is subject to the terms, conditions and exclusions of the policy issued. The information provided is general in nature and may be affected by changes in law or the interpretation of such laws. The reader is advised to contact a professional prior to taking any action based upon this information.

Beware of These Commercial General Liability Exclusions