Why Is Trucking Insurance So Expensive?
Ontario trucking insurance premiums have increased 47% since 2018. Understanding the forces driving these costs helps you make informed decisions and find ways to reduce your premium.
Last updated: December 2025 | Industry analysis
The Short Answer
Trucking insurance is expensive due to a "perfect storm" of factors: nuclear verdicts (jury awards over $10M), rising repair costs for tech-heavy trucks, medical inflation, and fewer insurers willing to write commercial trucking policies. The industry's combined loss ratio has exceeded 100% in recent years—meaning insurers pay out more in claims than they collect in premiums.
The 7 Factors Driving Up Trucking Insurance Costs
Nuclear Verdicts
Jury awards exceeding $10 million have increased 300% over the past decade. In 2021 alone, there were 27 trucking verdicts over $10 million. The average verdict in trucking cases jumped from $2.3M (2010) to $22.3M (2020). Insurers must price for these catastrophic outcomes.
Repair Cost Inflation
Modern trucks have advanced ADAS systems, sensors, and cameras that are expensive to repair or replace. A minor fender-bender that once cost $5,000 now costs $15,000+ when sensors and calibration are involved. Parts shortages have made this worse.
Medical Cost Inflation
Healthcare costs in Canada have risen 4-6% annually. Serious trucking accidents result in significant medical claims—spinal injuries, traumatic brain injuries, and long-term rehabilitation. These costs are passed through to premiums.
Reinsurance Market Hardening
Insurance companies buy reinsurance to cover large claims. The reinsurance market has tightened significantly, with reinsurers either exiting the trucking space or charging much higher rates. Primary insurers pass these costs to policyholders.
Reduced Insurer Competition
Several major insurers have exited or reduced their commercial trucking portfolios in Ontario. Fewer carriers competing for your business means less downward pressure on rates. Some specialty trucking insurers have left the Canadian market entirely.
Litigation Funding
Third-party litigation funding allows law firms to pursue larger claims against trucking companies. Plaintiff attorneys can now afford to take cases to trial rather than settling, leading to those nuclear verdicts mentioned above.
GTA Traffic Density
Ontario, particularly the Greater Toronto Area, has some of the highest traffic density in North America. More vehicles on the road = more accident exposure. The 401 corridor sees over 500,000 vehicles daily, creating significant risk.
What You Can Do About It
While you can't control market forces, you can take steps to minimize your premium:
- Maintain a clean CVOR: A Satisfactory rating is essential. Conditional status can add 35-50% to your premium.
- Invest in safety technology: Dash cams, ELDs, collision avoidance systems can earn discounts of 5-15%.
- Increase deductibles: Moving from $1,000 to $2,500 can reduce premiums by 10-15%.
- Work with specialized brokers: General agents don't understand trucking. Specialized brokers have relationships with niche insurers.
- Shop annually: Insurer appetites change. Last year's best rate may not be competitive this year.
- Consider your radius: If you can reduce cross-border exposure, you may save 25-50%.
The Silver Lining
Higher premiums mean marginal operators are leaving the industry, reducing capacity. For well-run trucking companies with good safety records, this often translates to better freight rates. The operators who survive the hard market often come out stronger.
Will Rates Ever Go Down?
Industry experts are cautiously pessimistic. Until nuclear verdicts are addressed through tort reform and the reinsurance market stabilizes, significant rate decreases are unlikely. However, the market is cyclical—hard markets are eventually followed by softer ones.
Your best strategy is to focus on what you can control: safety, CVOR status, and working with brokers who specialize in trucking to find the most competitive rates available in the current market.
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Fred founded Morison Insurance in 1994, growing it from a single Hamilton office to Ontario's #1 Insurance Broker as named by IBAO. With roots dating back to 1895, the family business now serves over 80 professionals across multiple locations.