By Andrea Wells
The COVID-era boom in trucking is definitely over.
The trucking sector is experiencing one of its most challenging times, with trucking operators’ profitability dropping across all sectors, total costs continuing to rise, and freight tonnage and rates remaining stagnant or even slightly down.
Costs are up for diesel fuel, tractors and trailers, and insurance. Plus, there are the ongoing concerns over a shortage of drivers and the impact of runaway litigation.
Trucking activity in the United States decreased in September, pushing the level down to the lowest in three months. Specifically, truck freight tonnage declined 0.9% after gaining 0.9% in August and 1.1% in July, according to the American Trucking Association.
“Tonnage levels remain choppy, but they are up 2.1% since hitting a low in January,” said ATA Chief Economist Bob Costello. “Compared to the high three years earlier, however, truck tonnage is still off by 3.9%.”
Since the COVID trucking boom–where trucking company growth surged from the start of the pandemic until the end of 2023–there’s been a significant decline in freight volumes and rates nationwide. According to Denis Brady Jr., transportation broker at Burns & Wilcox, that loss of business has forced a large number of trucking businesses to scale back operations or shut down completely.
Data from the Federal Motor Carrier Safety Administration (FMCSA) shows that the number of motor carriers declined 10% in 2024. In the first half of the year alone, nearly 10,000 carriers closed their doors. In 2025, more major trucking businesses have filed for bankruptcy as profit margins have been spread thin due to tariffs, heavy debt from overinvestments during the pandemic, and overall higher operating costs including higher insurance costs.
All of this has made trucking a very challenging insurance market. “Over the last decade, the insurance carriers have struggled to be profitable and at the same time the trucking industry is struggling to be profitable as well,” said Mark Gallagher, transportation practice leader at Risk Placement Services (RPS). “That’s a tough spot for truckers right now and for carriers alike.”
Some states are tougher than others when it comes to the insurance market. According to Gallagher, New York, New Jersey, Georgia, Texas, Florida, and California are historically tough states, along with Cook County in Illinois. “Rates are typically higher in those venues,” he said.
Gallagher has seen a lot of trucking firms shutter their doors during the past two years.
“Mergers and acquisitions are a big part of what we’re seeing with larger fleets purchasing some smaller ones,” he said. “We’re also seeing owner/operators that acquired their own authority over the last few years now shut down their authority and lease their truck, or go back to a larger entity to become a driver–in essence, closing their doors.”
Litigation Against Truckers
Insurance is among the bumps in the road for trucking firms.
Burns & Wilcox’s Brady maintains the driver of skyrocketing liability rates in transportation is clear: litigation. “The personal injury attorneys are winning. They have been for a decade,” he said.
‘The personal injury attorneys are
winning. They have been for a decade.’
RPS’s 2025 Transportation Market Outlook found that the cost to insure physical damage has increased by 18% in 2025 over 2024, while umbrella liability increased by 12%. Settlement creep, a newer phenomenon where insured losses gradually increase over time, has led to auto liability increases between 7.5% and 20%, the report said.
Litigation costs are higher than ever. According to the American Transportation Research Institute (ATRI), which tracks verdicts and settlements in the trucking industry, the number of cases resulting in verdicts over $1 million increased by 235% when comparing the 2005-2011 period and 2012-2019 period. The ATRI also noted that from 2010-2018, the average verdict over $1 million grew from $5 million in 2010 to $23.5 million by 2018.
While social inflation and nuclear verdicts are driving premium increases throughout the industry, some states are more difficult than others, as Gallagher noted.
In some regions, like New York City’s Bronx Borough, “it’s totally become a free-for-all,” said Greg Kroeger, managing partner at World Insurance Associates LLC.
“There’s certain venues where carriers just don’t want to write because they know that it’s going to be an uphill battle to defend the claim,” he said. “If you’re a carrier, you don’t argue a case in the Bronx. You just don’t.”
According to a recent report by Amwins, “State of the Market Transportation H1 2025,” the states of New York, California, Texas, and Illinois continue to see limited active players, and the casualty marketplace in New Jersey is “essentially non-existent” due to high-frequency claims and the increased limit requirement of $1.5 million.
But it’s not all bad news.
Jennifer Nuest, senior vice president, transportation practice leader at Amwins, sees some good news on the litigation front. She said the market appetite in states like Florida and Georgia is picking up in part due to recent tort reform measures.
Also, the industry sees some good news in the overturning of a $90 million nuclear verdict against trucking firm Werner Enterprises in Texas. While it’s too early to tell if the outcome of this case will help to set a new precedent in Texas, transportation leaders see the ruling and other tort reform measures as positive.
“I would say these are very positive things for the industry to see some of the litigation reforms starting to get passed in various states, especially tough ones like Florida and Georgia that really need it,” Nuest said. “Unfortunately, the flip side of that is a wait-and-see approach for many insurers,” she said.
Nuest doesn’t expect significant market changes until insurers see how these new state efforts play out. Even so, she believes the measures will likely open up the insurance
market for truckers in small but helpful ways.
“Maybe insurers make small creeps in their appetite,” she said. “For example, a carrier may say, ‘I’ll only write a risk in Florida if less than 40% of their miles are in Florida.’ And then they’ll change it to less than 50% of miles in Florida.”
Another effort that could provide some market relief in difficult states is recently enacted legislation requiring third-party litigation disclosure in several states. But Nuest cautions that any effects of the disclosure laws will not be seen for some time. “It’ll take at least a couple years before we really understand what the impacts are going to be there, but it’s good progress,” she said.
There’s a long road ahead to better times for trucking insurance and the commercial auto market in general, Nuest said.
“We need a lot more litigation reform to really move the needle on commercial auto as social inflation and especially a third-party litigation funding has added a lot of costs to claims,” she said.
Fighting Back
The primary line of defense against rising costs for insurance and against potential litigation is staying focused on safety. This can include encouraging the use of technologies like telematics and dashboard cameras.
“The more insurance carriers continue to lean into technology implementation requirements, such as forward-facing cameras, the better chance the insured will have to fight back against personal injury attorneys,” Brady said.
Telematics, or on-board devices that combine GPS and telecommunications to collect and transmit data on the truck’s location, performance, and driver behavior, have become the standard in safety for trucking companies and a requirement of many insurers for coverage, said Roman Atkielski, senior vice president, commercial auto and garage division, at Jencap.
“It’s monitoring driver behavior, routes, things like hard brakes and hard turns and speed. These are all just safety issues that motor carriers really need to take seriously,” Atkielski said. “Cameras are also wildly important because they take all the guesswork out of a claim,” he added. “We can actually see the footage as to an incident, so that can tell us who was liable in a claim, and oftentimes it shows that our insureds are not liable.”
Years ago, if a truck rear-ended another vehicle, in most cases the truck driver would be named at-fault, Atkielski said. But what if the other vehicle swerved and cut off the truck in an unsafe manner? “So, cameras can really take all the ambiguity out of what happened in an accident,” he noted.
Claims Management
The industry can also fight rising costs through better management of the overall claims process. Early claim reporting and resolving claims faster dramatically reduces litigation risk and claim severity, Atkielski said.
“What we see is when these claims linger–nobody’s done anything for three months or 60 days or whatever it is–all of a sudden the claimant’s got an attorney involved because nobody’s talking to them,” he said. “But if we can get involved and say, ‘Hey, listen, we’re on this and we’re going to make you whole as quickly as humanly possible,’ if it’s a compensable claim, then the likelihood of them lawyering up is mitigated.”
Adjusters and carriers need to emphasize their time early in the claims process, said Harish Kapur, CEO of Across America Insurance Services, a Riverside, California-based commercial trucking and transportation-focused managing general agency. When claims get litigated, it’s often because the claim process and lifecycle of the claim simply took too long, according to Kapur. “What are you doing in the six months or three months? That’s your crucial time. That’s your money right there.”
This is one reason Kapur brought his firm’s claims process in-house. “We did this six years ago, and I wish we had done it sooner,” he said. “Why did I become a claims guy? I think because I felt like my defense attorneys or our TPA that we hired didn’t do as good of a job as they should have. They didn’t prepare the file as they should have, did not work the file the way they should have.” That led to some claims fights over damages or liability that “we should be accepting,” he said. “But the question really becomes are we fighting for the right reasons.”
Kapur said managing the claims process gives insight into what claims should be fought. “So, this year alone, we’ve taken a total of seven cases to trial. We just finished one yesterday, and we’ve got another one going in trial on Monday,” he said. “On three of them, we had 100% defense verdicts. We paid $0,” he said.
“I feel like insurance companies are not trying enough cases–they’re not trying enough cases, and that is giving a sense to the plaintiff’s side that it’s OK to ask for whatever they want to,” he said.
Handling claims in-house helps identify what claims are worth fighting and helps in preparation to defend those cases, he said. “We prepare the mediation brief, we prepare and go through every medical record, we tie it together, making sure things are lining up. That’s what we do, and we’ve had success on it.”
Kapur said out of the seven cases that have gone to trial, so far there’s only been one loss. “I wouldn’t even call that a loss because we ended up paying a reasonable amount,” he said. “So, I feel like it’s been a good win because we’re not fighting for the wrong reason.”
Back to the Basics
For agents and brokers approaching the market for their trucking clients, Brady advises to keep it simple.
“Go back to basics,” he said.
“The three main things a trucking company can do to keep their insurance costs down are to focus on their safety scores, focus on driver hiring and in-house training, and to install dual-facing cameras in all trucks to record accident involvement as a better way to defend their interests against the personal injury attorneys.”
Historically, 70%-80% of accidents are caused by personal autos, yet most of the time the trucker’s insurance carrier ends up paying out due to lack of documentation or because the safety scores of the trucking company make it impossible to defend, he explained.
RPS’s Gallagher recommends that agents always be students of the industry. “Attend as many webinars and educational sessions as you can. We try to provide those on a regular basis and as much as we can throughout the year for our agents,” he said.
Encourage trucking clients to keep a focus on safety, Jencap’s Atkielski said. “Report claims early, use cameras, telematics, and partner with trucking professionals who understand the market.” Take a look at usage-based insurance options, too. “There are some options out there for usage-based insurance, which will reduce the cost for operators,” he said. “It’s usually monthly pay so there’s no premium financing.”
And do whatever it takes to put the brakes on social inflation. “The industry really needs to find more ways to get in front of that, and a lot of that has to start with claims at the carrier level,” Amwins’ Nuest said. “How are we investing in claims more thoroughly and putting the foot down a little bit more, especially where third-party litigation funding is involved.”
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