Forecasting Insurance Rates for Fleets & Owner-Operators

Updated: May 6

It’s no secret that insurance rates in the trucking industry are rising. These increases have impacted both our fleet partners and our owner-operator clients. So, ATBS set out to determine why the increases are happening, what potential geopolitical risks could be on the horizon, and how fleets can utilize the changing insurance landscape to help retain and recruit owner-operators. We also contacted Bill Zenk and Chris Gulker of TrueNorth Companies to help provide industry insight into the insurance increases and how to mitigate them.

“When it comes time to renew insurance each year, truck drivers on their own authority have become used to seeing 5% to 15% premium increases, while motor carriers have seen as high as 35% to 40% premium increases,” says Gulker, Practice Leader at TrueNorth Companies.


These types of increases are even true for experienced truck drivers and fleets who have a history of safe driving.


Unfortunately, these increases in the price of insurance don’t look to be going away anytime soon. The premium hikes could be getting worse... A new measure was included in a highway funding bill recently that was approved by a House panel. The measure, which was initially supported by the Owner-Operator Independent Driver Association (OOIDA), would raise the minimum liability insurance requirement for commercial motor vehicles from $750,000 per truck to $2 million. The American Trucking Association (ATA) and OOIDA have both opposed the bill after the “poison pill” amendment, as the ATA and OOIDA have dubbed it, was added.


Those who support the amendment argue that the current minimum insurance liability doesn’t adequately compensate victims involved in large truck accidents. Those against the bill say that the subsequent massive increase in insurance prices will force many small trucking companies and drivers to go out of business. Additionally, opponents of the amendment believe raising the minimum insurance coverage will do nothing to improve highway safety and feel the new minimum number is not comprised using a fair and data-driven process.


Whether or not the increase in minimum liability insurance passes, the cost of insurance looks like it’s going to continue to increase. Gulker expanded on this topic by saying: “The increases are primarily driven by the recent frequency and severity of large claims. Today, it’s common to see multi-million dollar verdicts, including claims valued in the tens, if not hundreds, of millions of dollars. With the number of claims and dollars spent by insurance carriers on the rise, several insurance carriers have left the Commercial Auto market entirely; thus, leaving fewer insurance carriers willing to operate in this line of business. With fewer insurance carriers left to write the business, on top of the declining profits to the insurance carriers remaining, insurers are becoming more selective on the Motor Carriers they will insure. This is leading insurance costs to continue to rise.”


In order to help protect your fleet from increases in premiums, and to gauge how these increases in insurance costs will impact the owner-operator side of your fleet, we must first look at the expenses that owner-operators cover. We will be looking at the differences between insurance required for owner-operators on their own authority and owner-operators leased onto a carrier. Then we can determine how these increases can impact your fleet.


Owner-Operators on their Own Authority

Owner-operators on their own authority pay anywhere between $14,000 and $24,000 per year for insurance. As mentioned earlier, all truck drivers with their own authority are required by the FMCSA to have primary liability insurance with a minimum coverage of $750,000. This coverage can cost anywhere between $7,000 and $20,000 per year. Additionally, it’s common for independent owner-operators to have the following types of insurance:


Cargo $400 - $1,800 per year

Cargo insurance covers the loss or damage of a load during transport. This type of insurance isn’t legally required but is necessary to avoid problems with individual shippers.


Physical Damage $2,000 - $3,000 per year

Physical damage insurance pays for damages to the truck but not any damage to the cargo. This insurance is a requirement for all owner-operators who are financing their truck.


Bobtail $350 - $450 per year

Bobtail insurance covers the driver and the truck when they are not hauling a load or a trailer.


Non-Trucking $350 - $600 per year

Non-trucking insurance protects the driver while they are using their truck for personal use.


Owner-Operators Leased onto a Carrier

As an owner-operator leased onto a carrier, the primary liability coverage is provided by their fleet. However, they are responsible for everything else. The following types of insurance are typical for a leased driver:

  • Bobtail

  • Non-Trucking

  • Physical Damage

All of these types of insurance were previously mentioned in the section above.


The biggest factor that will go into how much their policy will cost is their truck’s value. If they drive an older truck, the cost might be between $3,000 - $4,000 per year for the three insurance types listed above. A newer truck will likely lead to insurance costing around or slightly more than $4,000 per year.


In addition to the insurance coverage above, owner-operators leased onto a carrier will also typically pay for Occupational Accident insurance. This coverage costs between $60-$160 per month and includes medical, disability, death, and dismemberment benefits for accidents that occur on the job.