Industry data reflects that continued pressure. Commercial auto rates increased 5.8% in the first quarter of 2026, marking the 59th consecutive quarter of increases. More recent data shows that rates continued to rise in the second quarter, although at a slower pace.¹ ²
There isn’t one single reason behind these increases. Instead, insurers are responding to a combination of long-term underwriting losses, increasingly expensive liability claims, changing driving behaviors, and higher vehicle repair costs.
Businesses can’t control those broader market conditions. But understanding what’s behind them, and where your organization can reduce its own risk, can help you make more informed decisions about your fleet and put your business in a stronger position with insurance carriers.
Commercial auto has been an unprofitable line of insurance for more than a decade. In 2024 alone, the industry recorded a $4.9 billion underwriting loss. Results improved in 2025, but the line remained unprofitable, with an estimated $1.9 billion underwriting loss.³ ⁷
For insurers, years of paying out more in commercial auto claims than they collect in premiums creates sustained pressure on rates. But claim frequency is only part of the story. The severity of those claims – how much they ultimately cost – has become an equally important concern.
One of the largest contributors to claim severity is social inflation, or increases in insurance claim costs beyond what can be explained by ordinary economic inflation.
Larger jury awards, increased attorney involvement, litigation funding and changing attitudes toward corporations can all increase the cost of resolving liability claims. These trends are particularly significant in commercial auto, where a serious accident can involve substantial bodily injury and potentially significant legal costs.⁴ ⁵
Bodily injury claims themselves are also becoming more expensive. Industry data cited in the original market analysis shows bodily injury severity increased 9.2% from 2023 to 2024, with medical inflation and changes in roadway conditions among the contributing factors.⁴
The result is straightforward: when serious accidents occur, they can cost considerably more than they once did.
The way people drive also plays a significant role in commercial auto losses.
Distracted driving remains a persistent concern. In a Travelers risk survey, 25% of employees reported having experienced a crash or collision while driving for work because of distraction from a mobile device or other technology.⁴
For employers, addressing distraction requires more than telling employees to put their phones away. Workplace expectations matter, too. Employees shouldn’t feel that answering a call, text or email is more important than focusing on the road.
A clear distracted-driving policy — supported and modeled by leadership — can help establish that expectation. Our Distraction-Free Driving resource provides additional guidance for employers looking to strengthen this part of their safety program.
Driver shortages, turnover and other workforce challenges can also put less-experienced drivers behind the wheel. The original market analysis notes that inexperienced commercial drivers have higher rates of preventable accidents, crash involvement and moving violations than more experienced drivers.⁴ ⁶
That makes driver qualification an important part of managing commercial auto risk.
A formal Motor Vehicle Record (MVR) evaluation process can help businesses establish consistent standards for who is permitted to drive on company business and identify concerning driving behaviors before they contribute to a loss. MVRs should generally be reviewed at hire and at least annually thereafter, with continuous monitoring offering an even more proactive approach.
For more guidance, see our Formal Motor Vehicle Record (MVR) Evaluation Policy.
Driver screening also plays an important role in protecting a business against negligent entrustment allegations. These claims can arise when an employer allows someone to drive on company business when the employer knew — or should have known — that the individual was not qualified to operate the vehicle safely. Importantly, that exposure isn’t limited to company-owned vehicles. Employees driving personal vehicles for business purposes can create risk as well. Learn more in Negligent Entrustment: What It Is and Why It’s a Problem for Employers.
It’s not only liability claims that are becoming more expensive.
Today’s vehicles contain increasingly sophisticated sensors, cameras, electronics and other technology. Even relatively minor accidents can require expensive parts and specialized repairs. The source material cites an average cost of approximately $4,000 for a minor fender-bender, along with repair timelines of six to eight weeks from scheduling through completion.⁶
Higher repair costs and longer downtime contribute to the overall cost of commercial auto claims, and ultimately to the pressure insurers are trying to account for in their rates.
You can’t change jury trends, medical costs or the price of vehicle repairs. But those aren’t the only factors carriers consider when evaluating your commercial auto risk.
Your organization’s own loss history, drivers, policies and risk management practices matter.
A strong fleet safety program can include:
Whether your organization owns a large fleet or simply has employees occasionally driving their personal vehicles for work, a thoughtful approach to fleet management can help reduce your exposure. Our Fleet Management: Protecting Your Operations on the Road article offers additional considerations for both owned and non-owned vehicles.
Commercial auto rates are influenced by forces much larger than any individual business. That’s why even organizations with good loss histories may still experience increases at renewal.
Risk management isn’t a guarantee of lower premiums. It is, however, one of the areas where your organization has meaningful influence.
A well-managed fleet can help prevent injuries and losses, protect your employees and the public, and demonstrate to insurance carriers that your organization takes its driving exposure seriously. Over time, those practices can also help strengthen the story your insurance team is able to tell on your behalf when approaching the market.
At Morris & Garritano, we can help you evaluate your commercial auto exposures, identify opportunities to strengthen your fleet safety practices, and understand how your risk management program fits into your broader insurance strategy. Talk with your M&G team about where your organization can focus next.
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Resources
Ensure your organization stays compliant with Medicare rules. Distribute the required Medicare Part D Creditable Coverage Notice to all Medicare-eligible participants by October 14, 2026 to help them avoid late enrollment penalties and meet federal requirements.
The temporary Medicare Part D premium stabilization subsidies are ending after 2026. As a result, some Medicare beneficiaries may see changes to their standalone Prescription Drug Plan (PDP) premiums and coverage options in 2027.
Learn how to engage your Medical Provider Network, train supervisors, guide injured employees to care, and support a smoother return-to-work process.
What "covered" should feel like.
What "covered" should feel like.
What "covered" should feel like.
What "covered" should feel like.
What "covered" should feel like.
