The domestic shipping industry is seeing trucking insurance costs still rising as we approach the end of 2025. Over the last five years, insurance costs have risen by nearly 43.7%. Similarly, truck insurance premiums have increased by about 40% over the previous decade. Carriers with both large and mid-sized to small fleets have been affected differently by the surge. While smaller fleets have been negatively impacted by higher premiums, larger fleets have benefited. For example, fleets with more than 20 carriers may benefit from greater negotiating power and more diversified risk pools. This article explains the reasons for increasing insurance and how it could affect the shipper moving goods by truck.
Why Are Trucking Insurance Costs Still Rising?
Various factors have driven up trucking insurance premiums in recent years, including litigation and “nuclear verdicts”. From 2020 to 2025, there have been over 140,000 accidents per year. Many of those accidents have resulted in verdicts yielding increasingly large jury awards exceeding $10 million. More significant legal settlements have forced insurers to raise rates to compensate. Eryn Brasoven, A partner at a national law firm, noted, Rising premiums are less tied to any regulation, and more a result of social inflation and what the industry feels are nuclear verdicts.” Another cause of rising premiums has been rising inflation over the last few years.
Rising costs for truck parts, maintenance, and accident repairs have also been felt in trucking insurance premiums. In two years, auto claims have risen to over $20,000 on average, and insurance costs have increased to cover them. Increased risk exposures have also contributed to rising costs. Some of these risks include more trucks on the road and higher demand. The coronavirus pandemic contributed to increased demand by driving e-commerce growth. Since trucks typically transport imports to their final destinations, more carriers entered the industry to meet the growing demand. Other factors driving up premiums include a greater need for last-mile deliveries and stricter underwriting criteria for insurers.
How Does It Affect The Shipper?
In addition to affecting truckers with small to mid-sized fleets, rising costs can directly impact shippers. A primary way is by higher freight rates that carriers pass down to shippers. In turn, this increases the cost of moving cargo domestically. The shipper is also impacted by reduced carrier capacity, which can also improve their costs. Reduced capacity can also come from higher expenses, such as rising insurance prices. Smaller fleets that cannot cover the growing costs are forced out of the market. Companies with larger fleets may also become more selective and risk-averse when choosing customers, given the higher premiums. This could make it harder for shippers with more complex freight to find carriers.
Although the rising insurance costs can fall on the shipper, it should not stop them from moving cargo domestically. They should, however, take the proper steps to avoid growing fees, which can be harmful if the shipper has customers. An ideal first step is to contact a freight broker, such as A1 Worldwide Logistics. Freight brokers are the middlemen between shippers and carriers that coordinate cargo movement on behalf of the shipper. They do this by offering services such as obtaining carriers, providing paperwork, finding rates, and more. Brokers also offer consultation to educate shippers on the best ways to protect their shipments. Contact our brokers at info@a1wwl.com or 786-376-9420 to get a quote for domestic cargo movement.