How Businesses Can Avoid Premium Surprises on Commercial Auto Coverage

Here in Central Texas, your business vehicle isn’t just a way to get from A to B—it’s part of your livelihood. Whether it’s a service truck navigating the winding Hill Country roads, a delivery van in Austin-adjacent territory, or a commercial pickup hauling equipment across Kerr County, your fleet (even if it’s just one vehicle) matters. And so does the insurance behind it.

At Dowd Insurance Agency, we’ve seen firsthand how commercial auto premiums inch up—and knowing the “why” helps you stay ahead. Based on insights from Travelers Insurance, here are six forces that drive up commercial auto insurance rates—and what you can do about them.

1. Bodily Injury Loss Costs

One of the biggest push-factors: claims involving bodily injury are getting more expensive. According to Travelers, from 2023 to 2024 bodily injury severity jumped 9.2%. That means when someone is hurt in a work-vehicle crash, the medical, legal, and claim costs are rising.

What you can do:

• Develop and enforce a strong fleet safety program.
• Monitor driver behavior for speeding (a big culprit).
• Ensure every driver is properly licensed and well-trained—especially in rural Hill Country terrain where conditions vary.

By proactively reducing the risk of injury claims, you build credibility with underwriters and may mitigate future premium hikes.

2. Rapid Rise of Litigation Costs

It’s not just medical costs—but lawsuits, too. Litigation is getting costlier thanks to more aggressive claims tactics and “social inflation” (higher jury awards, increased attorney involvement).

What you can do:

• Screen and train your drivers carefully; keep good driver records.
• Make sure your contracts with vendors or third-party carriers are ironclad (if you outsource transport).
• Work with an insurer that offers risk-control resources (we can help you find that).

By showing the insurer you’re mitigating litigation risk, you’re investing in better terms.

3. Distractions and Impairment

Phones, other devices, fatigue — you name it. The Travelers Risk Index found 64% of companies surveyed were worried about distracted driving liabilities.

What you can do:

• Adopt and enforce a mobile-device-use policy while driving.
• Roll out regular training, reminders, and perhaps incentives for safe driving behaviors.
• Leverage telematics or in-vehicle monitoring if your budget permits—it shows you’re serious.

In Central Texas, where drivers might be managing varied terrain, roadside stops, or long haul distances, this is especially important.

4. Inexperienced Drivers

With retirements and labor shortages, more businesses are hiring less-experienced drivers—and data shows those drivers have higher rates of preventable crashes and moving violations.

What you can do:

• Prioritize retention of experienced drivers: offer incentives, create career paths.
• For newer drivers, implement a structured training and mentoring program.
• Track performance metrics and intervene early when challenges show up.

Underwriters like seeing programs in place for driver preparedness—especially when driving through areas like the Hill Country with winding roads and changing weather.

5. Vehicle Repair & Replacement Costs

Seems obvious—but yes: trucks and vans now cost more to repair (new materials, more tech) and theft/vandalism is rising (especially catalytic converter thefts). The consumer price index for motor vehicle maintenance leapt 13% between Jan 2023 and Jan 2024.

What you can do:

• Maintain vehicles regularly (scheduled maintenance helps you avoid bigger claims).
• Consider installing anti-theft devices if your business operates in higher-risk zones.
• Choose vehicles wisely: balancing cost, usage, and exposure helps optimize your premium.
• Work with your agent to make sure your valuations and coverage limits align with current replacement costs.

This is particularly relevant around the Austin/Canyon Lake corridor where repair costs can be higher and parts may take time to arrive.

6. Use of Third-Party Transportation Carriers

Outsourcing transport or using third-party carriers? That can increase your exposure. If the motor carrier you use has inadequate coverage or you acted negligently in hiring them, you could be drawn into litigation.

What you can do:

• Vet any third-party transportation provider thoroughly (check their liability limits, safety record, contract terms).
• Maintain documentation of oversight and compliance.
• Consider how much control you have vs. how much risk you inherit.

If you’re a Central Texas business contracting out deliveries, you’ll want to ensure you’re not assuming unintended risk.

Bottom Line for Central Texas Business Owners

Premiums on commercial auto policies may feel like they’re creeping upward—but the good news: many of the drivers of those increases are within your control. At Dowd Insurance Agency, we specialize in helping business owners in Central Texas (Cedar Park, Austin, Georgetown, New Braunfels, San Antonio, etc.) structure their programs with:

• Tailored coverages for commercial autos and fleets
• Risk-control guidance specific to our terrain and business environment
• Regular reviews that align your vehicles, usage, and exposures with your policy (so you’re not over- or under-insured)

We’ll walk you through why your premium is what it is, what you can do to make it more competitive, and how to protect your business moving forward.

Ready to take a look under the hood of your commercial auto program? Reach out to us at Dowd Insurance or call us at (512) 331-0787—we’ll schedule a review and help you drive your exposure down (and your premium into a better lane).