There is no doubt that the hardest line of business to write going into 2020 is Commercial Auto. For years, insurance carriers underpriced auto premiums and it caught up to them, resulting in auto being unprofitable for many carriers. According to the National Association of Insurance Commissioners, Commercial Auto losses are on the rise for the fourth consecutive year. The national average for increased rates has been around 12%, even for accounts with no claims. Contractors have always been a higher rated class. I have seen many accounts get 25-40% rate increases with little to no claims. If you are in a “tough state” like Florida, Louisiana, Texas, or California, and your loss ratio is over 50%, the likelihood of your premiums doubling is not out of the question. One carrier who writes a fair amount of restoration business is pulling out of Commercial Auto coverage all together in California and Texas because of their loss history.

What is the driver behind these increases? There are countless explanations, but it comes down to five main reasons.