Navigating a Challenging Market in 2025: How Business Owners Can Stay Ahead in Commercial Auto Insurance

?? Despite 52 consecutive quarters of rate increases, commercial auto insurance remains the most challenging sector for the industry. Here’s why that matters for your business—and how you can take back control on your commercial auto insurance policies.

?? The Bad News

Commercial auto has been the worst-performing commercial line for over a decade, with underwriting losses reported every year from 2013 to 2023. In 2023 alone, negative loss adjustments exceeded $3 billion pushing the net loss on Commercial Auto to $5 billion nationally.

The average loss per liability claim has more than doubled since 2014. Distracted driving and less experienced commercial drivers caused by massive driver shortages are driving the continued struggles of the commercial auto market according to the majority of reports.

?? The Good News

While commercial auto liability remains a significant challenge, the physical damage loss ratios have shown stability since 2018, with marginal profitability for some carriers. This suggests that some aspects of commercial auto are manageable and that targeted strategies by carriers can lead to better outcomes in the coming renewals.

The commercial lines sector has seen strong underwriting performance in other areas outside of auto. This broader market strength demonstrates that insurers are capable of improving results through disciplined underwriting. We've seen different carrier approaches in this market with some becoming very stable on renewals where others seeing continued struggles based if they have not been able to adapt.

?? Best Practices

Partnering with your Broker to proactively discuss the risks of your Commercial Auto fleet so you are not caught flat footed if you have a driver with activity coming on their record at renewal or company accident setting that has you set to nonrenewal.

Packaging multiple lines of business together if possible gives you more buying power that can give your broker leverage when navigating your renewals with underwriting.

Not turning in the small stuff, if you can afford to increase deductibles and avoid being dinked and dunked by claims this will make your business auto policy significantly more attractive to underwriters.

Implementing a Driver Employee Handbook will allow you to touch on the driving habits that you want to require from your employees such as: o??Cell Phone Use Policy: Detail restriction of use in company vehicles o??Auto Care Policy: Details such items as drivers must ensure the doors are locked and the keys are taken out of the vehicle if it is left unattended or doing a walk around each time parking back at the facility to ensure the vehicle is in the same condition as when they left. o??Vehicle Use Policy: Details expectations of personal use, authorized?personnel only being allowed to operate company vehicles, passengers limitations to those that need to ride in the vehicle to complete a job and any restrictions all being clearly stated.

Final Thought: Communicate and Strategize

This coming year will continue to bring much disruption to businessowners in their insurance program but approaching the market with a strategy to be executed by your broker will help you get the best results. If you follow some of the best practices listed above you will position yourself and your business to take back control of your commercial auto insurance program.

Thanks for taking the time to read the latest edition of The Broker’s Edge on Insurance!

I’m Trevor Elliott, a Commercial Insurance Broker with over a decade of experience working with business owners across various industries. My goal is to provide valuable insights to the insurance industry and strategies to help business owners navigate the world of insurance with confidence.

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