Commercial trucking firms are bracing for continued volatility in 2026 as tariff uncertainty, depressed spot market rates, and climbing insurance and repair costs pressure margins and delay investment decisions, according to Risk Placement Services (RPS).
Mark Gallagher (pictured), leader of RPS' national transportation practice, said the past 12 months of shifting US tariff policy have added another layer of unpredictability to an already strained sector.
“A lot of it surrounding the tariff is uncertainty or unknowns,” Gallagher told Insurance Business. “For the insurance industry, it typically means potentially higher costs for repairs and a higher limit needed for goods being transported, which in commercial auto in general puts a strain on industry loss ratios.”
If tariffs push up the value of goods, insureds may find their existing motor truck cargo limits inadequate. Gallagher said many trucking clients are already seeing an escalation in cargo values as well as in the cost of replacement parts and repairs for auto physical damage.
As a result, some insureds are reevaluating their policy limits and recalibrating operations. “We have seen adjustments, whether it’s downsizing operations or taking on higher deductibles to lessen the impact of a rate increase,” Gallagher said.
The inflationary pressures are also reshaping underwriting and pricing dynamics. Historically, commercial auto liability has been the primary driver of losses in the trucking segment. But rising physical damage and cargo claims severity are eroding the ability of those lines to offset liability results when written in package policies.
As repair expenses climb, loss ratios across multiple coverage lines are under pressure, compounding profitability challenges for insurers and increasing premium strain for motor carriers.
While tariffs have been a key talking point, Gallagher noted that broader economic conditions and the freight cycle have had a more immediate impact on trucking operations.
After pandemic-era highs, when freight rates surged and carriers expanded fleets, the subsequent downturn in the spot market left many operators exposed. Freight availability declined sharply, creating economic challenges across the industry.
“There was an increase in the (number) of trucks on the road, and then what happened following that was freight availability in the spot market being so depressed that it certainly had an economic impact,” Gallagher said.
In a hard market, Gallagher said clients seeking the most favorable terms must demonstrate strong risk management and operational discipline.
Telematics adoption and data sharing have accelerated, particularly among fleet operators. Many carriers now use outward- and inward-facing cameras and share driving data directly with insurers.
“In some cases, it's a benchmark or a staple that is a requirement in order to even provide insurance coverage,” noted Gallagher. “The data has to be shared, and that's particularly prevalent in the program space. Carriers have adapted from that perspective.”
Non-fleet operators have been slower to adopt telematics, but Gallagher said the industry is making progress.
Safety investments also remain critical. Insurers are increasingly offering loss control services, coaching, and risk-reduction programs. Carriers that embrace these resources and retain experienced drivers tend to perform better in underwriting evaluations.
In this environment, underwriters have also tightened expectations around claims reporting. Gallagher said many insurers are now emphasizing same-day claims notification directly to the carrier.
Prompt reporting allows insurers to investigate quickly, document scenes, interview witnesses, and potentially mitigate the impact of social inflation, litigation funding, and nuclear verdicts.
“If there’s a history and a pattern of poor or delayed response in turning in claims, that’s going to impact clients,” Gallagher said. “Late reported claims have the potential of introducing issues that have been exacerbated over the last few years.”
Insurers view proactive claims handling and transparent communication as indicators of a disciplined risk management culture, the RPS leader added.
Looking ahead, Gallagher believes spot market volatility, unresolved tariff risk, and rising insurance, repair, and equipment costs will continue to define the near-term outlook for commercial trucking insurance.
For insureds, he advised prioritizing cash conservation and flexibility until macroeconomic and policy signals become clearer.
“Insurance rates continue to climb, and the cost of repairs and equipment also continues to rise,” he said. “Uncertainty … could continue to climb as well. Delaying investments will persist at least for the next few months and until more of the uncertainty becomes clear.”
