Commercial Truck Insurance Trends 2024
So now there are too many trucks and not enough freight. This is surprising given not long ago the largest concern in commercial trucking was lack of drivers.
Encouraged by Federal dollars, Covid caused a consumer buying bonanza. As a result, eager new Owner Operators started their own Trucking operations.
But other than a 3rd quarter 2023 blip, the buying bonanza is over. Covid checks have been spent and credit card debt is high.
The sugar high is over with manufacturing orders down 40% from the middle of last year.
But there is a light nearing the end of The Great Freight Recession of 2023…
Over 100,000 new DOT numbers were issued by FMCSA during the buying bonanza.
Most of these new operating authorities were one or two truck companies.
That was a whole lot of new competition driving down your rates.
Could they stay in business running cheap freight?
The past ten year average Out of Service orders was around 15,590.
But according to Freightwaves, Out of Service orders surpassed 35,000 for 2023 alone.
FMCSA data indicates the OOS orders going back to 2022 total 75,000.
The point is, it’s finally trending in the right direction for long time Owner Operators who've been riding out the storm.
You are starting to have less competition.
Fitch Ratings "expects the U.S. commercial auto insurance segment to remain unprofitable through 2023
with rising claims severity from inflation and burgeoning litigation risk despite continued price increases and underwriting changes.
We expect the segment combined ratio (CR) to exceed 106% in 2023."
Fleetowner reports that nuclear verdicts continue to plague the truck insurance industry.
CargoNet reports a 59% increase in cargo theft compared to third quarter of 2022.
Over $31.1 million in shipments were stolen in third quarter 2023 alone.
[Related Story - What Cargo Insurance may not cover for Expediters]
The cost of simple small claims is also increasing because parts and equipment have gone up due to inflation.
That’s why underwriters are looking at the frequency of claims more than they have in the past.
Time to embrace video technology that can help mitigate your claim?
When you can quickly provide proof you were not at fault it can change the entire storyline of a potential claim.
You'll also see a much quicker settlement regardless of who is at fault.
Certainly the bankruptcies of Yellow, Convoy and other long time trucking companies in our community are sobering.
Some really great friends who have been successful in the past have closed their doors and will be missed.
(To them I say, "You have been successful in the past, and you will be successful again on whatever path you choose.")
Any newbies out there with a struggling DOT authority?
May I suggest you consider a voluntary revocation of your own DOT and lease on with an established long time Motor Carrier for awhile?
It could give you the time you need to rebalance and weather the storm.
There are some great established Motor Carriers right here on Expediters Online.
Hang in there guys, and remember all storms eventually pass.
Shelly Benisch, TRS, CIC & Christina Cummings, TRS
Commercial Insurance Solutions Inc.