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Truck insurance premiums rose as much as 29% in the 4th quarter compared to the previous quarter, but the average increase moderated throughout 2023, according to a report.
The highest increases were in the Southwest region consisting of Southern California, Arizona, New Mexico, Oklahoma and Texas, where one in five insurers reported this type of increase, according to Report of the Council of Insurance Agents & Brokers.
However, the report found that average increases for commercial auto premiums declined, from an average increase of 8.8 percent in the third quarter to a 7.3 percent increase in the fourth quarter, the report said.
Commercial car insurance increases in 2023
Q1 | E2 | E3 | Q4 |
---|---|---|---|
8.3% | 10.4% | 8.8% | 7.3% |
SOURCE: The P/C Commercial Market Indexwhere quarterly increases are based on consecutive quarters for premiums.
Prices are an important factor in operating costs in a low demand environment.
Trucker leaders say issues like nuclear verdicts — lawsuits involving $10 million or more in prize money — are contributing. Another factor includes the rising cost of repairs.
For owner-operator Joe Boelman, president of Trucking Solutions Group, a big increase can mean a big cost bump.
Knight-Swift Transportation Holdings has experienced the challenges of underwriting first hand in a tough operating environment for freight transportation. After quarterly losses repeated in 2023, the carrier announced in January that it would close its third-party insurance businesses. The losses came amid more frequent and severe claims, the company said.
That more challenging environment included “some smaller carriers that are likely being pressured to run more miles to offset the lower rates” and “have had to make some of their premium payments,” Adam Miller, now CEO of company. one Q1 2023 earnings call.
Many Trucking Dive truckers spoke with reported increases they have experienced with Progressive. Owner-Operator Independent Drivers Association EVP Lewie Pugh said insurers need to understand trucking, but it’s a market some insurers are looking to get out of. Progressive did not immediately return messages seeking comment.
Fourth quarter increases are also not as sharp as other quarters in 2023, suggesting some improvement. In Q2, one Pacific Northwest region had more than one in 10 insurers reporting increases from 30% to 50% compared to the previous quarter.
The Southeast had a similar percentage in this range in Q1and also in that quarter, the Pacific Northwest had an even higher level of businesses reporting that kind of growth.