Insurance costs are climbing so fast for small trucking operations that many in the one-to-10 power unit range are being pushed to the financial edge, said Karen Eernisse (pictured), national commercial trucking insurance agent at Western Truck Insurance.
“Twenty years ago, I could quote $6,000 per unit for auto liability. Now, for the same operations, you’re starting at $18,000 to $22,000 for a million in coverage,” she said. “It’s not sustainable. They’re getting the same rates they got 20 years ago, but fuel is ten times higher, insurance is 20 times higher. Rather than bringing home $200,000, they're making $70,000-$80,000 a year, which they could earn managing a McDonald’s.”
For larger fleets, carriers are more willing to negotiate due to the higher premium base. Small fleets don’t have that leverage. “The problem with a one to 10 power unit is that one catastrophic claim – a $1 million loss – blows the whole loss ratio out of the water for up to 100 truckers,” said Eernisse. “The numbers just aren’t there.”
Eernisse pointed to the rise in “nuclear verdicts” – massive legal payouts that now define worst-case scenarios for underwriters – as one of the biggest drivers behind the rising rates. These outcomes, once rare, are now shifting entire pricing models and making carriers even more risk-averse.
“With one to 10 power units, it’s easy for an insurance company to hit a 200% loss ratio on a rollout. There’s no money in it,” she said.
The situation is especially dire in California, which Eernisse called “the worst state” for small fleet insurance. “Carriers are pulling out entirely – dirt, sand, grave – they’re not writing new ventures,” she said. “Progressive and Berkshire Hathaway’s NICO are among the very few left.”
Eernisse said the underlying problem lies in how risk is modeled for this segment. “The algorithm is flawed because the pool is too small. One trucker’s loss ratio can ruin the loss ratio for a whole group,” she said.
In response, some newer programs are looking beyond traditional underwriting. “There are new programs using telematics and safety data to assess risk – looking at how they're driving, where they're going, and what commodities they’re hauling,” said Eernisse. She pointed to companies like Nirvana, which are using real-time data to rate risk more aggressively.
Still, she cautioned that innovation isn’t yet supported by the hard data insurers demand. “We haven’t figured out how to fully integrate hard actuarial data with telematics yet. We can’t currently back up telematics-driven underwriting with enough data to convince insurers,” she said. “Actuarial data is still king.”
Tools like the AI Motive camera, which records driver behavior, have impressed brokers, but some tech still meets resistance from drivers who live in their trucks. “There’s debate about inward-facing cameras due to privacy concerns – these drivers live in their trucks, so it’s essentially their home,” she said.
One company Eernisse called out positively was Sentry Insurance, which incorporates training and safety support. “They integrate training and safety and support their truckers,” she said. Even so, “there’s a gap between what telematics show and what insurers accept.”
Beyond commercial auto coverage, Eernisse pointed to an urgent lack of basic health and life protections for drivers. “I envision a simple, affordable suite: non-traditional disability insurance through Great American, life insurance, cancer coverage, and major medical,” she said.
Many truckers are sole breadwinners, and their families are left exposed when disaster strikes. “I’ve had widows call me after fatal accidents asking about additional coverage – and there is none,” said Eernisse. “We could package something for $200 a month or less. No big annuities or retirement plans – just practical, protective coverage.”
FMCSA processes have become more complex, Eernisse said, turning what was once a straightforward compliance update into a costly time drain. “Login.gov has made things harder. It used to be simple to update MCS-150 or file data queue corrections. Now it’s a different portal with complicated verification. Hold times are over five hours,” she said.
That’s pushed many drivers to hand off compliance work to third-party administrators. “Truckers need hands-on training. I walk my clients through their safety reports line by line,” she said. She praised services like JJ Keller that offer video modules in multiple languages as useful tools – but said federal efforts so far are falling short. “The FMCSA safety planner site offers just one-page summaries per topic. That’s not education.”
Fraudulent certificates and outdated validation services pose a growing threat for brokers and carriers. “It’s a double-edged sword. Services like RMIS validate certificates, but often the data is outdated – 30 to 45 days old,” said Eernisse. “They might say coverage is valid, but they don’t know if the power unit actually picking up the load is covered.”
The best defense, she said, is to avoid third-party validation entirely. “The best protection is getting a certificate directly from the insurance company in real-time. Make sure the VIN matches the unit picking up the load,” she said. “RMIS only validates once a year, and insurance is far too fluid for that.”
For small fleets, the future is growing less viable. Carriers are pulling back, technology is advancing without insurer alignment, and regulatory systems are becoming harder to navigate. “The economics are brutal,” said Eernisse. “And we’re not giving truckers the tools or coverage they actually need.”
