As we roll steadily into 2018, many businesses are seeing their commercial auto insurance rates increase. In fact, many individuals are also seeing their personal auto rates also increase, which can create a financial concern for small business owners who have several commercial and personal vehicles to cover. The truth is, auto insurance rates for businesses and individuals have steadily risen since 2012, leaving many people to wonder why this is the case.

This rise in premium isn’t just because insurance companies are trying to pad their pockets. The rise of auto insurance rates has multiple influencing factors including more accidents from distracted drivers and an increase in severe accidents as well.  This has resulted in a performance decline for auto insurance carriers. According to an article in Forbes, “In 2010, the average direct combined loss ratio was 99.7% amongst the nation’s ten largest insurance companies meaning they were just barely making a profit off auto insurance premiums. In 2016, the ratio ballooned to a whopping 107.1% average, meaning the major insurers were losing 7% more than earning.”

The cause of increased insurance rates falls into four main categories:

Accidents have been more severe – In the last few years the number of fatal accidents has skyrocketed. Fatal accidents cost insurance companies millions of dollars. The cost of medical services has also gone substantially up.

Cost to repair vehicles has gone up – With new technology in vehicles like back sensors, cameras, etc. the price to repair vehicles has risen dramatically costing insurance companies thousands of dollars in repairs.

There has been a decline in investment revenue – Insurance companies have investment portfolios mostly made up of conservative investments like bonds, in which they make money from. In the last few years, investment income from these conservative investments has been the lowest ever.

There have been numerous recent natural disasters – Hurricanes, earthquakes, and floods have been prevalent in the United States, especially in the past year. Insurance companies have paid billions of dollars to claimants all throughout the country. To pay for these large losses, rates have gone up and will continue to rise until the weather stops destroying vehicles.

Even though rates continue to rise, good insureds that are focused on solid driving and fleet safety practices will continue to qualify for the best rates. Fewer accidents will  always result in better insurance rates. It is also wise to take a look around and see if you can find less expensive rates that still meet your coverage needs. There are often specific insurance carriers that are able to provide better rates for certain industries. It is worth your timer to take a look.

Our sister company, A Plus Risk and insurance, can provide you with an easy, no-obligation review of your current coverage to see if there are any areas that can be improved. encourage you to consider. A Plus Risk represents six different insurance carriers and has been able to save many of our customers hundreds of dollars on both personal and commercial insurance. You can contact them directly for a quote at (801) 443-1194.

If you are interested in learning how you can improve your company’s fleet safety program, please contact our Safety Director Nick Baird at (801) 443-1339 or