If your employees drive for work, you’ve seen commercial auto rates keep climbing. Premiums and repair costs have risen year after year, and there’s little sign they’ll come back down. 

That can be frustrating. It can also feel like you have no choice but to keep paying more at every renewal. 

There’s no quick fix. But once you understand what’s pushing rates up, you can see where you have some control. There are practical steps you can take to reduce your risk and put your organization in a stronger position, even while premiums keep rising. 

A lot has shifted over the past decade or so in the world of auto insurance, bringing an expensive array of challenges that create severe underwriting pressures for carriers. Here’s what I mean.  

Between 2015 and 2025, claim severity surged by a whopping 64%. Chalk that up to several factors, including bigger settlements and higher associated legal fees, higher medical expenses, and even the inflationary push of administrative costs. It doesn’t take more than one accident to experience a staggering loss.  

The legal system isn’t immune to changing attitudes and cultural shifts, and commercial auto is disproportionately impacted by social inflation and nuclear verdicts. We’re seeing increased legal involvement in minor accidents, which increases costs and settlements, third-party litigation funding that pushes cases to their limits, and jury awards that go into the millions.  

A severe commercial auto accident can threaten primary and umbrella limits, meaning you need to review your limits, contractual exposures, and documentation and post-accident procedures.  

The intricate electronics that go into vehicles—components like cameras and proximity sensors, LED and matrix headlights, advanced driver-assistance systems, and high-tech powertrains—make repair a lot more costly. What once might have been a simple bumper replacement can now require sensor replacement, diagnostic work, and recalibration. In fact, over just the past six years, average repair prices rose more than 40%.  

The safety technology that helps prevent crashes makes repair after a crash more expensive, which leads to a tradeoff when you’re considering fleet replacement and deductibles.  

In 2022, distracted driving was responsible for approximately 3,000 deaths and 289,000 injuries, and I don’t imagine those numbers have decreased since then. Yes, phones are a big part of the problem, but so are dashboard infotainment systems, electronic logging devices, and plain old fatigue. Taken together, these factors are responsible for a lot of preventable crashes, and commercial auto insurance is understandably affected.  

Changing behavior depends not just on writing your own distracted-driving policy but on consistent training, enforcement, coaching, and leadership support.  

When there aren’t enough drivers to fill the jobs, quick hiring decisions, abbreviated training, and reduced experience standards tend to lead to greater losses. The immense pressure the ongoing commercial driver shortage puts on employers shifts how hiring decisions are made, and commercial auto loss unsurprisingly has become more frequent and severe.  

As challenging as it may be, I urge organizations to maintain their high driver standards and stick to a strong hiring process that includes motor vehicle record reviews, road testing, onboarding, and coaching.  

As expensive as your policy may have become, it still isn’t relieving the pressure on underwriters. Commercial auto has seen losses for more than a decade—to the tune of $4.9 billion in 2024, the 14th consecutive year of losses. That’s a tough reality for all involved, and even worse: These increases aren’t a temporary spike but a desperate reaction to an industry crisis. There’s not much you can do about that one, but it does provide some helpful perspective. Insurers are experiencing a struggle that could frankly be making your challenges even tougher.  

I can’t deny that a lot of the factors I shared here are outside of your control, but you aren’t without some options. Focus on the internal controls that minimize loss frequency and implement rigorous risk management to protect your people, your assets, and your value to underwriters.  

I’d love to tell you this is temporary, but it might be our new reality. No matter the trajectory of the economy, legal trends, repair costs, and driver challenges, you and your teams are best served when you maintain strong safety, hiring, and risk management policies—and those elements are completely under your control. Can we call that a little bit of good news?