5 Forces Driving Commercial Auto Insurance Costs

Travelers red umbrella logo
By Travelers
2 minutes
Closeup of two hands on car steering wheel driving safely down a road.

Over the past decade, auto insurance rates have increased steadily; well exceeding the rate of inflation over the same period. But what's driving this upward trend? Explore factors that have significantly impacted the rates for commercial auto.

1. Bodily Injury Loss Costs

gray icon for bodily injury loss costs

In the five-year period from 2018 to 2022, auto severity has increased a substantial 40% even as frequency has declined.1 Causes include an increase in deadly accidents, rising verdicts in legal cases and medical cost inflation. In fact, the latter is expected to grow 7% in 2024, up from 6.0% in 2023 and 5.5% in 2022.2

Develop a Strategy to Control Your Company's Medical Costs

2. Attorney Involvement

gray icon of a gavel

With attorneys actively pursuing auto accident business, more claimants now have legal representation. These claims see higher rates of expenditures for medical procedures and treatment.3 A complete fleet management program can help reduce your exposure.

Practice Smart Fleet Management

3. Distractions and Impairment

gray icon of a distracted driver holding up a cell phone

Distractions behind the wheel, from vehicle infotainment systems and mobile devices to driving under the influence, can lead to significant risks: 30% of companies surveyed reported that they have employees who have been involved in crashes due to mobile phone distraction, and deaths due to preventable crashes are up 18% versus pre-pandemic levels.4 

Safeguard Your Business with a Distracted Driving Policy

4. Inexperienced Drivers

gray icon of the front end of a truck colliding with something

Resignations and retirements are leading to a shortage of commercial operators, increasing the chance that less experienced replacement drivers are behind the wheel. Operators in new vehicles and covering new routes can also contribute to an increase in accident rates.

Recruit Safe Drivers for Your Business

5. Vehicle Repair and Replacement Costs

gray icon of a car with semi-circles on either side of it for emphasis

Autos have become more expensive to insure and repair. Newer vehicles are outfitted with advanced materials and technology designed to make driving more comfortable and safer. When these vehicles are involved in an accident, costs can be high, and labor shortages and inflation have only exacerbated the issue. In fact, motor vehicle parts and equipment costs have increased almost 24% since September 2019.5 Meanwhile, used car prices are still up almost 47.9% in 2023 compared to the average from 2015 to 2019, despite recent softening.6 This directly impacts the cost of claims in the event of a total loss. Finally, rising auto thefts are further contributing to increased claim costs.

1 LexisNexis Risk Solutions Auto Insurance Trends Report
2 Health Research Institute
3 Attorney Involvement Keeps Claims Soaring (June 2023, The Institutes)
4 Travelers 2023 Risk Index – Distracted Driving
5 Auto Insurance: The Uncertain Road Ahead (2023, APCIA)
6 Edmunds Used Vehicle Report (Q3 2023) 

2023 business distracted driving.

Top Stories

2023 Distracted Driving for Business

The 2023 Travelers Risk Index for Business finds employees are using their phone when they are behind the wheel, and it may contribute to distracted driving behaviors. Here’s a look at key findings to learn more.

Related Products & Services

Protecting your business vehicles isn't the same as your personal auto, so Travelers offers Commercial Auto and Truck solutions to help you stay covered.

Roadside Assistance is coverage you can add to your car insurance to help if you’re stranded because of car trouble (for example, a dead battery).

More Prepare & Prevent

Safeguard Your Business with a Distracted Driving Policy

Help prevent distracted driving accidents in your business by creating and enforcing a mobile phone use and distracted driving policy. Learn more from Travelers.

Employee driving a car

More Prepare & Prevent

4 Summer Driving Hazards to Be Aware of

Warm weather brings summer driving hazards. Learn how your drivers can handle these hazards and help stay safe when driving in the summer.

A sign on the road and traffic jam in the background.jpg

More Prepare & Prevent

8 Elements of a Fleet Safety Program

A formal fleet safety program can help maximize fleet efficiency, enhance safety and more.

A start and stop button.