A Decade-Long Slump for Commercial Auto Insurance
A new insurance industry report reveals a stark divide: while personal auto insurance is experiencing record profitability, the commercial auto sector is facing its 14th consecutive year of underwriting losses, culminating in a $4.9 billion loss in 2024. This distinction is crucial for anyone sharing the road with large trucks or delivery vans, as the financial pressures on commercial insurers can directly impact the claims process after an accident.
As released on September 22, 2025, by the financial rating agency AM Best, the report titled “Stuck in Reverse: Commercial Auto Losses Keep Mounting” outlines a persistent crisis. The segment has accumulated over $10 billion in net underwriting losses in just the last two years. This long-term trend underscores systemic challenges that differentiate commercial auto from the broader insurance market.
Why commercial and personal auto insurance are worlds apart
It might seem confusing that commercial auto is struggling while you may have read about record profits in the auto insurance sector. This is because those profit reports primarily focus on personal auto insurance, or the coverage for individual drivers and their personal vehicles.
The table below highlights the key differences between the two sectors as of the latest data:
| Aspect | Commercial auto insurance | Personal auto insurance |
|---|---|---|
| Financial health | 14 consecutive years of underwriting losses | Record net profit of $37.6 billion in 2024; strong profitability continues into 2025 |
| Primary challenge | Liability coverage is the major driver of losses, with an underwriting loss of $6.4 billion in 2024 | Managing rising claims costs while benefiting from significant rate increases |
| Liability vs. physical damage | Severe divergence: Liability is deeply unprofitable, while physical damage coverage is profitable | Both liability and physical damage coverage contributed to the segment's profitability in 2024 |
The core driver of this divergence is a phenomenon known as social inflation. This refers to legal and societal trends, such as larger jury verdicts (sometimes called nuclear verdicts), increased attorney involvement, and more protracted litigation, that drive up the cost of claims far beyond general economic inflation.
For commercial auto liability, claim severity rose 78% from 2014 to 2023, more than double the rate of the Consumer Price Index (CPI). Claims are also staying open longer, increasing insurers' legal costs and exposure to these large verdicts.
What this means for you on the road
Whether you drive a personal car or a commercial vehicle, these industry trends can have real-world consequences:
- For all drivers: The intense financial pressure on commercial insurers may make them more aggressive in defending against claims. After an accident with a commercial vehicle, you could face an insurer that is more likely to dispute liability, delay the process, or offer lower settlements to mitigate their losses
- For commercial drivers and companies: Insurers are continuing to push for significant rate increases to offset their losses. This means higher premiums for businesses. Furthermore, because physical damage coverage, for the truck itself, remains profitable while liability coverage is not, insurers might encourage higher deductibles. This could increase out-of-pocket costs for businesses after an accident
Protecting Your rights after an accident
Given this challenging landscape, being prepared is more important than ever.
- Document everything thoroughly: After any accident, especially one involving a commercial vehicle, gather as much evidence as possible. This includes photos, witness information, and a detailed police report. This creates a strong foundation for your claim
- Understand your insurance coverage: Review your own policy to understand your uninsured/underinsured motorist (UM/UIM) coverage. If the at-fault commercial driver's insurance is insufficient, this coverage can be vital
- Seek professional guidance: Navigating a claim against a financially pressured commercial insurer can be complex. An experienced attorney can protect your rights, handle negotiations with the insurance company, and ensure you are not pressured into accepting an unfair settlement
The bottom line
The deep-rooted losses in the commercial auto insurance sector highlight a more adversarial claims environment. Understanding this context empowers you to be more vigilant on the road and more prepared in the unfortunate event of an accident.
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