Commercial Auto Liability Despite consistent rate increases, Commercial Auto coverage continues to cause underwriting losses for insurers and rate pressure for insureds. Commercial Auto experienced the highest average increase in premiums out of all lines for Q4 2024, at an average of 8.9%. This marks the 54th consecutive quarter of premium increases for Commercial Auto lines.
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
7.3%
9.8%
9.0%
8.5%
8.9%
The current U.S. Auto Liability market remains difficult for many insureds to navigate, despite investments in risk management practices. Objectives to prioritize are learning and education, providing quality data, data interpretation and incident tracking. A report by AM Best found the average loss per commercial liability claim has doubled since 2014. Increased claim frequency and severity are associated with higher premium costs. Additionally, the recent uptick in fleet electrification can lead to higher premiums due to the unique risk profile of electric vehicles. Ongoing challenges for Commercial Auto include vehicle repair cost inflation, driver shortages, more aggressive litigation and increased frequency of distracted-driving accidents. Insurers will demand increased rates, and organizations using fleets of heavy autos or large hired/non-owned exposures (such as delivery operations) will see the largest price increases.
Our Recommendations: › Focus efforts on reducing fleet size and continuing to minimize risk.
› Insureds are encouraged to take higher retentions on the primary. High hazard/challenged classes of business can expect 10% to 20% increases; moderate to low hazard can expect 5% to 10%.
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