Rising litigation costs drive trucking insurance spike
Liability insurance premium costs in the trucking industry jumped by 18.6% to 10.2 cents per mile from 2021 to 2024, despite heavy-duty truck-involved crash rates falling by 2.6% at the same time, according to new research from the American Transportation Research Institute.
The data confirms a sharp rise in crash claims expenses fueled the surge in insurance costs, ATRI said. Among respondents, per-mile liability losses rose by an average of 33.1% over the same period. Premium costs for excess coverage rose at an even higher rate. From 2021 to 2024, per-mile premium costs for the $5-10 million insurance layer rose by 34% to 1.58 cents, and per-mile premium costs for the $10-15 million layer rose by 45% to 1.05 cents.
These increases in excess coverage expenses point to the role of rampant litigation in inflating claims costs.
“ATRI’s report gives us invaluable visibility on the changing liability insurance landscape and how fleets are navigating it,” Lynette Woodie, ArcBest manager of loss prevention and administration, said in a news release. “Good fleets don’t just react passively to rate increases each year: they take the initiative by analyzing data and working closely with their insurers to craft a holistic risk management plan that improves safety and reduces costs.”
Several risk management approaches yielded positive outcomes during this period, ATRI added.
Fleets with more retained risk in their primary coverage layer experienced lower combined liability losses and premium costs during this period, regardless of size. Furthermore, fleets that reduced total purchased coverage experienced an average reduction of 2.4% in combined liability losses and premium costs in the subsequent year when adjusted for inflation. “These outcomes can be attributed to a combination of premium reductions and aggressive implementation of safety strategies by fleets,” ATRI stated. “For example, the deployment of six safety technologies had a statistically significant correlation with lower per-mile liability losses.”
The full report includes a variety of additional benchmarks for fleets to evaluate trends and assess their own risk management approach, such as coverage limits, percent of revenue spent on insurance, and deductible or self-insurance levels by fleet size.