Why Commercial Auto Insurance Rates Are So High Going Into 2026

How's it going, everybody? If you are a business owner, CFO, executive, or somebody within a business that handles the commercial insurance program, and you have a commercial auto insurance policy, then this video is for you. For just about every business out there, commercial auto insurance can be one of the most expensive parts of their commercial insurance program. And unfortunately, going into 2026, that trend is not slowing down. So today, I want to go over why this is actually happening, and then what your business can do about it. Thank you for stopping by. My name is Brian. I'm an independent insurance agent based here in the state of Michigan, Metro Detroit specifically, and I work with businesses on their commercial insurance programs, as well as helping families and individuals with their personal insurance, their home, their auto insurance as well. My goal with this channel is to pass on a little bit of educational information to you so that you can make more informed decisions around your insurance, and then overall, help answer any questions that you might have. So let's get into it. And before we get too far into the video, I do want to invite you to subscribe to the channel. And if you find this video helpful, useful, anything like that, please feel free to like, share, pass along with anyone else as well. So first to start, this is not just an issue in Michigan, where this is really happening nationwide. Commercial auto insurance has been very unprofitable for insurance companies for 12 of the last 13 years, meaning they've been paying out more on claims than they've been receiving in premiums. And at the end of the day, insurance companies are businesses too. They need to be able to operate profitably. When a particular line of business loses money for more than a decade, unfortunately, rates have to increase. But on top of that overall trend, there are several factors over the past few years that have pushed costs even higher. First is that repair costs have increased dramatically. Today's vehicles are filled with a lot of technology. In a minor accident a few years ago that might've only been $1,500 for repair is now $5,000 to $10,000. And then you have auto repair shops dealing with labor shortages, the delay getting parts sometimes, all of these factors contribute to higher repair costs. And then another big issue is around the overall amount of claims when it comes to the liability side of things, meaning that it is much more common for a commercial auto claim to now involve personal injury attorneys. Unfortunately, the public has looked at businesses as a target for these types of claims. So not only are there more claims, more people calling those billboard attorneys that you see out, but then the payouts on those claims are also higher. So the increased litigation activity has pushed rates higher as well. And then driving patterns has changed. Businesses are on the road more. Distracted driving is a huge issue, which has created more accidents. Unfortunately, more exposure usually leads to more claims. And then somewhat related to that liability issue is that major claims cost a lot more than they used to. A single serious accident, especially involving a commercial truck can easily reach into the millions of dollars. There's a ton of data out there showing that large loss severity is rising a lot faster than inflation. And then there's also just the general underwriting side of things. A lot of these insurance companies aren't as flexible with their appetite as far as the types of businesses they'll write for their commercial auto. And when they do, they really want to make sure that it's the right risk, that the employees that are driving your vehicles have clean records. They want to know the overall driving radius of your operation. If you have a formal distracted driving program in place, if you have a vehicle maintenance program, telematics being used, these are all factors that underwriters will now look at. And now this leads me to what Michigan businesses can actually do going into 2026 to help with their commercial auto insurance rates. First is going to be to look to try to improve driver quality as much as possible. I know it can be hard in today's employment environment, but drivers with clean records is really going to be one of the biggest drivers that will impact your costs. And then second, if it makes sense, try to implement a telematic system. Insurance companies are continually rewarding accounts that do have these types of systems in place, whether it's with better rates, or it's just the fact that they might underwrite an account that they wouldn't necessarily have in the past because they do have these systems. So if you don't already, definitely consider it. And then along with that, maintain a formal vehicle maintenance program. Have some sort of proactive policies and procedures in place to regularly check your vehicles because this can help reduce claims. And when you reduce claims, your premiums will stay more stable. And then along with this, establish a distracted driving policy. In today's world, this is extremely important. And just about every insurance company is going to require this nowadays. And then just some simple things. When you're going through your renewal or just getting your policy in place for the first time, make sure that your vehicles are classified correctly. Whether it's the radius of operation, how they're being used, whatever it may be, it's going to have a big impact on your premium. And then last would be to work with an agent that does have the right carrier partners. They understand your business. They understand your commercial auto exposure as a whole. Because working with a partner who can help you navigate the insurance marketplace to find the best rates, the best coverages, depending on your class of business can be a huge help. So yes, overall, the commercial auto insurance market here in Michigan is not super friendly, but that does not mean you can't be proactive and do things to help keep your rates more stable or lower them over time. So thank you for watching. And if you are looking for help with your commercial auto insurance specifically or commercial insurance program as a whole, I would love the opportunity to work with you and see if our team can help. There are a lot of ways to get a hold of me and they should all be in the description below. Please feel free to text, call, email, fill out a contact form, whatever is easiest. And if you have any other questions about insurance, please feel free to either reach out directly or leave them in the comments below. I would love to help answer those as well. So thank you again.