July 1, 2025
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How to Combat the Continued Rise in Commercial Auto Claims

Why commercial auto claims are still climbing — and how businesses can respond

If you’re a business owner or fleet manager, chances are you’ve seen your commercial auto premiums rise steadily in recent years. It’s not your imagination. Across the U.S., commercial auto claims are still climbing — and so are the associated costs. While premiums continue trending upward, many carriers are reporting that claims expenses are outpacing the rate of premium growth, leading to tighter underwriting and higher deductibles.

So, what’s behind this ongoing surge? A combination of economic, behavioral, and environmental factors continue to drive up both the frequency and severity of commercial auto claims.


Why Are Commercial Auto Claims Still Increasing in 2025?

Despite advancements in vehicle safety, the risk landscape is growing more complex:

1. Distracted Driving Is Still Prevalent

Smartphones remain a leading cause of distracted driving incidents. According to the National Highway Traffic Safety Administration (NHTSA), distracted driving contributed to more than 3,500 fatalities in 2023 alone. And the definition of “distracted” has broadened to include voice-to-text systems, wearable tech, and in-car infotainment systems.

2. Rising Repair and Medical Costs

The average repair cost for commercial vehicles rose over 12% in the last two years, driven by inflation and the complexity of new vehicle tech (think cameras, sensors, and lane-assist systems). Medical care costs have also surged, increasing the severity of bodily injury claims.

3. More Vehicles, More Miles, More Accidents

Post-pandemic, business travel and delivery volumes have rebounded sharply. With more vehicles on the road for longer hours, the likelihood of incidents increases — especially in congested urban and suburban areas.

4. Extreme Weather Events Are Taking a Toll

The frequency of floods, wildfires, and windstorms is on the rise, damaging commercial fleets and infrastructure alike. This environmental risk adds another layer of exposure that must be managed proactively.

5. Labor Shortages and Inexperienced Drivers

With experienced commercial drivers in short supply, businesses are hiring younger, less experienced drivers. That increases the risk of accidents and underscores the need for better training and monitoring.


The True Cost of Work-Related Vehicle Accidents

Work-related auto accidents cost employers nearly $80 billion annually, factoring in lost productivity, legal liability, medical expenses, and rising insurance premiums. According to the most recent NSC report, roughly 40% of all vehicle crashes are work-related, with over half of those resulting in lost time from work.

Even seemingly minor fender-benders can turn into major expenses when downtime, litigation, and liability are factored in.


What Can Your Business Do?

While the risk of accidents can’t be eliminated entirely, there are clear, proactive steps businesses can take to reduce exposure, manage costs, and improve driver safety:


1. Dig Into Your Claims Data

Start by conducting a thorough review of past auto liability claims. Look for trends in frequency, severity, location, time of day, and type of collision (rear-end, intersection, pedestrian). Understanding the why behind the incident is the first step in reducing recurrence.

Tip: Use your carrier’s loss runs or request a claims trend analysis from your broker or risk advisor.


2. Implement a Modern Driver Safety Program

Establish a written program that includes:

  • Driver screening and qualification standards

  • Safe driving rules and behavior expectations

  • Incident reporting protocols

  • Ongoing training and certification

  • Clear consequences for violations

Don’t just rely on Motor Vehicle Records (MVRs). Pair MVR checks with real-world data like telematics behavior, mileage driven, and claim history.


3. Leverage Telematics and GPS Tracking

Today’s vehicle tracking systems go far beyond route monitoring. They can flag:

  • Harsh braking or acceleration

  • Unauthorized personal use

  • Distracted or drowsy driving

  • Speeding or stop sign violations

These insights enable real-time coaching and data-driven decision-making about vehicle usage, driver habits, and risk exposure.


4. Same-Day Incident Reporting is Critical

Delaying claim reporting can increase costs significantly. Encourage same-day reporting and have easy-to-follow protocols in place. Immediate documentation helps preserve details, prevent fraud, and speed up claims resolution.


5. Ban Device Use Behind the Wheel

A growing number of businesses are instituting full bans on any device usage — even hands-free — during company driving. If distracted driving is an issue in your claims history, this should be a priority policy update.


6. Introduce a FAVR or Reimbursement Policy

If employees use personal vehicles for work, consider a Fixed and Variable Rate (FAVR) reimbursement model. This allows you to control your exposure by ensuring vehicles meet safety standards and employees carry adequate personal insurance.


7. Proactive Vehicle Maintenance and Selection

Out-of-service vehicles, delayed repairs, or mechanical failures can all lead to avoidable claims. Establish a strict maintenance schedule and consider rotating aging fleet vehicles before repairs outpace replacement value.


Your Role in Reducing Commercial Auto Risk

Whether you manage five trucks or fifty, every employer has a responsibility to reduce road risk — not just for cost reasons, but for the safety of employees and the public. Commercial auto insurance carriers increasingly reward proactive clients who demonstrate a commitment to risk control.

Start with better data. Layer in stronger policies. Make safety an organizational value. When claims do happen, investigate, learn, and adjust.

Because when you control what you can, you’re better prepared for what you can’t.


Resources

This article originally appeared in Arrowhead’s Tribal blog and has been updated to reflect the evolving risks and solutions in 2025.

Categories: Blog

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