Why Your Commercial Auto Premiums Are Increasing

Matthew Banchero | Apr 1, 2021 | minute read

Have you noticed your Commercial Auto Insurance premiums increasing year in and year out? You’re not alone. By the end of 2018, commercial auto insurance premiums had seen their 29th consecutive quarter of rate increases. 

And, sadly, the prognosis for the remainder of 2019 isn’t any better. This year alone, Commercial Auto Insurance premiums are expected to increase between 6 and 12 percent

With such skyrocketing rates, you’re likely wondering what’s happening in the market. We’ve got answers.

Factors That Are Increasing Your Commercial Auto Premiums

The bottom line is that commercial auto rates are increasing for established companies with a sizable fleet as well as new or small companies with just a few company vehicles. Let’s discuss the factors that are leading to the increased premiums. 

Increase in Miles Driven

We all remember the great recession, and how much so many companies had to scale back in its wake. Fast forward to 2019 and the economy continues to improve, and companies have more sales calls products to deliver, and other business travel to attend to. 

With companies consistently having their cars and trucks on the road even more, the risk of accident increases, leading to an uptick in commercial auto claims. And increase in claims overall means an increase in your individual commercial auto insurance policy.

Lower Fuel Prices

This factor may surprise you, but there’s a direct correlation between lower fuel prices and national accident rates (and more accidents = increased commercial auto insurance premiums). When gas prices are low, people and companies are less likely to limit the amount of time they spend on the road. With more cars on the road, more accidents are likely to happen.  


If your company has ever had to hire an attorney, you know that it’s expensive. And when an attorney gets involved in a case, you’re in for a fight. With auto accidents, in the past, attorneys typically only became involved if the case involved a claim for $100,000 or more. 

Nowadays, attorneys are willing to get involved and aggressively pursue claims for as little as $25,000. The involvement of attorneys is pushing up the price to handle individual claims, and those costs are being passed on to you in the form of increased premiums. 

Distracted and Impaired Driving

You can hardly get on the road anymore without seeing someone talking or texting on the phone, eating, or playing around with navigation apps. All of this equates to incredibly distracted drivers. Of all the causes of highway fatalities, the National Highway Traffic Safety Administration found that distracted driving accounts for 8.5% of all highway fatalities

Even worse than distracted driving, many people continue to drink heavily or take drugs and drive. In 2017 alone, 10,800 deaths were a result of drunk and drugged driving. Although drunk driving is decreasing, drugged driving is only increasing with the wider availability of marijuana and other substances. 

Increasing Medical Costs

It’s no secret that medical care costs in the United States are high. Recently, there’s also been an increased cost and frequency of soft tissue surgical procedures, a surgery type that is commonly used to treat auto accident victims. And not only is the surgery itself expensive, but it also requires follow-up treatments, which only adds to the increased costs. 

When it comes to medical costs and auto insurance, David Nelson, 2nd Vice President of Auto in Commercial Accounts at Travelers, said, “There’s a broad cost to deliver care in America. That trend isn’t going away any time soon, and the auto insurance market is impacted by that.” 

Vehicle Repair Costs

Just like rising medical costs, the cost of repairing vehicles is also increasing. As cars become more technologically advanced, they also become more expensive to fix. For instance, AAA discovered that vehicles with advanced driver-assistance systems (ADAS) cost twice as much to repair following collisions. With ADAS automobiles, just the cost of replacing the windshield is $1,500, as opposed to $500 for a standard windshield. With certain repairs costing nearly three times as much, it’s no wonder that the insurance companies are taking note and adjusting premiums. 

Leap | Carpenter | Kemps Insurance Agency Can Help You With Your Increasing Commercial Auto Premiums

Leap | Carpenter | Kemps Insurance Agency understands the position that you’re in as a business owner: you need to insure your company’s vehicles, but the cost to do it is always at the forefront of your mind. 

Our knowledgeable agents are here for you. With decades of experience helping businesses just like yours get commercial auto insurance, we know how to find the best rate for your company, and we won’t stop until we’ve found it. 

Contact us today to see how you can save money on your Commercial Auto Insurance.

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About The Author

My expertise lies in my knowledge from my over 15 years of experience in the commercial and personal insurance industry. My goal is to provide my clients with the proper insurance coverage at the most cost-effective solution.

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