Commercial Auto Is the One Line Still Going Up. Here Is What Underwriters Want to See.

By Toby Hartman, MM Insurance Associates

Commercial Auto Is the One Line Still Going Up. Here Is What Underwriters Want to See.

I have been watching commercial auto pricing for a while now, and the trend line has not changed in over a decade. The Council of Insurance Agents and Brokers just released its Q2 2026 survey, and it confirms what I am seeing on renewals every week. Overall commercial insurance premiums fell an average of 2 percent across all account sizes in the second quarter. Commercial property dropped 6.3 percent. Workers compensation eased too. Meanwhile commercial auto premiums rose 4.5 percent, the second highest increase of any line behind umbrella liability at 5.3 percent. This is not a blip. It is the same story fleets have lived with since 2011.

Why commercial auto keeps climbing while everything else softens

Here is the number that explains it. Insurers generally target somewhere in the 50 to 65 percent range for their loss ratio, the share of every premium dollar that goes out in claims, with the most safety-disciplined accounts in programs like group captives held to a stricter 40 percent or lower bar. That leaves room to cover overhead and still make a profit. Commercial auto liability blew past even the high end of that range years ago. Milliman's statutory data puts the countrywide commercial auto liability loss ratio at about 86 percent for 2024, the highest reading in five years, up from 79 percent in 2022. AM Best's full year 2025 numbers show the line's combined ratio, losses plus expenses, where anything over 100 means an underwriting loss, at 103.5. That is actually an improvement. The line posted a 109.3 combined ratio in 2023 and 107.2 in 2024. It has not seen a profitable year since 2021, and 2021 only happened because courts were shut down during the pandemic and nobody was driving.

The research group ATRI, which tracks trucking costs for a living, found that liability premium costs per mile rose 37.8 percent from 2015 to 2024, a pace that outran inflation by more than 4 points. At the same time, heavy truck injury and fatal crash rates per 100 million miles actually fell 8.4 percent. Read that twice. Crashes are down. Premiums are up. That gap is what carriers call severity, meaning the average payout per claim, driven by rising medical costs, vehicle repair costs, and increasingly aggressive jury verdicts. It has nothing to do with how many accidents are happening and everything to do with how much each one costs when it goes to court.

Umbrella liability is worse, and it has been getting worse for years

If you carry commercial umbrella coverage on top of your auto and general liability, you already know this. CIAB's Q2 2026 report marked the 35th consecutive quarter, close to nine straight years, of rate increases for umbrella liability. The Ivans Index, which tracks actual agency renewal data rather than broker survey estimates, shows umbrella renewals running between 7.4 and 9.4 percent for every quarter over the past two years, and it was running even higher before that. CIAB has said plainly that carriers are cutting property rates in part to offset the increases they are pushing through on umbrella and auto. The driver is the same one behind commercial auto: large jury verdicts tied to vehicle accidents, sometimes called nuclear verdicts, that blow through primary liability limits and land squarely on the umbrella policy. Underwriting capacity for umbrella has actually shrunk. Four in ten carriers responding to the CIAB survey reported pulling back capacity in that line.

What underwriters actually want to see at renewal

A national property and casualty practice leader put it to me about as directly as I have heard it said: telling a good story at renewal is not going to work anymore. Underwriters now have access to DOT records, vehicle inspection history, driver violation records, and telematics or camera data, and they are using it. Fleets that can hand over a real safety file are the ones getting flat renewals or small increases while everyone else absorbs the full rate hike. If you run vehicles for your business, here is what to have ready 90 days before your renewal date:

• Driver qualification files and current motor vehicle records for every driver

• A written vehicle maintenance schedule with completed service records

• A written driver safety program, even a simple one, showing how you train and monitor drivers

• Telematics or dash camera data if you have it, along with proof that someone reviews the alerts

• A clean loss run history, or an honest explanation of any claims on it

Why this hits contractors especially hard

If you run a contracting business, you are usually carrying commercial auto, general liability, and often umbrella side by side, so you are absorbing this pressure from every direction at once. Verisk's general liability data shows contractors as a class running a five year loss ratio of 69 percent, above the 67 percent average across all classes it tracks. That means contractors, as a group, are already sitting above what most carriers consider a comfortable target before you even factor in auto or umbrella.

An underwriter's eye example from IRMI, published in August 2026, shows why carriers hold the line on contractor renewals even in a softening market. Take a 100,000 dollar premium account running a 90 percent combined ratio, made up of 55 percent losses, 15 percent commission, and 20 percent expense. That leaves the carrier 10,000 dollars in underwriting profit. Cut that premium by just 10 percent at renewal, with the same losses and expenses, and the profit drops to 1,500 dollars, an 85 percent hit to the carrier's margin. Cut it 12 percent and the account is losing money. There is very little room for a carrier to give a contractor a break before that account stops being worth writing.

On the other side of that math, contractors with strong, documented safety records have real leverage. SureBuilt, a contractor focused group captive run in partnership with Amerisure, sets its bar at 40 percent or lower over five years for admission, because that is the level of risk profitable enough to share in a member run pool. You do not need to join a captive to benefit from the same logic. A documented safety program, clean loss runs, and consistent driver and job site oversight are what move a contractor from the crowd running 69 percent toward the smaller group running 40 to 50 percent, the contractors carriers compete to write.

None of this guarantees a flat renewal. Rates are still moving the wrong direction industry wide. But it is the difference between absorbing the full increase and getting credit for running a tight operation. If you want a second set of eyes on your renewal file before it goes to underwriters, that is exactly the kind of review my team does. Give us a call and we will walk through it together.

FAQ

Why is commercial auto insurance still going up when other business insurance rates are falling?

Commercial auto has posted an industry wide underwriting loss almost every year since 2011. Even after improving in 2025, the line's combined ratio was still 103.5, meaning insurers paid out more in claims and expenses than they collected in premium. Carriers are raising commercial auto rates to try to close that gap while cutting rates on lines like property that are actually profitable.

What is a loss ratio and why does it matter to my renewal?

A loss ratio is the percentage of premium an insurer pays out in claims. Most property and casualty insurers target somewhere in the 50 to 65 percent range to stay profitable, and the most safety-disciplined accounts in programs like group captives are held to a stricter 40 percent or lower bar. Commercial auto liability has been running near 80 to 90 percent industry wide, well past that target, which is a big part of why rates keep climbing.

Why is umbrella liability insurance rising even faster than commercial auto?

Umbrella liability sits on top of your auto and general liability coverage and pays out when a claim, often a vehicle accident, exceeds those underlying limits. Large jury verdicts have been landing squarely on umbrella policies for years, and CIAB reports 35 straight quarters, nearly nine years, of rate increases on the line.

Why do loss ratios matter more for contractors than other small businesses?

Contractors typically carry general liability, commercial auto, and often umbrella coverage together, so pressure on all three lines compounds. Industry data shows contractors running a higher general liability loss ratio, 69 percent over five years, than the all-class average of 67 percent, which puts many contractors closer to or above what carriers consider a break-even level before expenses.

Can documentation actually lower my commercial auto or contractor renewal?

It will not reverse the industry trend, but underwriters are now pulling DOT records, telematics data, and maintenance history directly, and for contractors, loss runs and safety program documentation. Accounts that can back up a clean operation with real documentation are seeing flatter renewals than accounts that cannot.

Sources

CIAB Q2 2026 Commercial Property/Casualty Market Report (Insurance Journal, 2026-08-20); AM Best Market Segment Report on commercial auto (Insurance Journal, 2026-02-24, and Insurance Business, 2026-08-26); ATRI Trucking's Rising Insurance Costs, May 2026; Milliman 2024 Commercial Auto Liability Statutory Financial Results; Ivans Index commercial lines rate data (Risk and Insurance, 2026-08-19); Verisk 2024 General Liability Executive Insights; IRMI, The Hidden Cost of a Cheap Renewal for Builders Risk: An Underwriter's View, August 2026; SureBuilt Casualty program eligibility criteria.