California commercial auto insurance has become one of the toughest placements in the state for contractor accounts, and the problem is no longer only price. Brokers say carrier appetite has narrowed so far that sending a submission to more markets often produces the same answer.
“Commercial auto is an absolute nightmare in California,” said Michael Benoit, president of Pacific United Insurance Services, a California brokerage specializing in contracting risks.
“I wish there were even 10 carriers that would be able to accommodate,” he said. “The markets are just so limited.”
Commercial property and casualty premiums have been falling nationally, but commercial auto has refused to follow the wider market.
The Council of Insurance Agents & Brokers (CIAB) reported an average commercial auto premium increase of 5.8% in the first quarter of 2026, the highest increase of any line and the 59th consecutive quarter of increases. Second-quarter increases moderated to 4.5%, behind only umbrella at 5.3%.
The difficulties in the two lines are heavily interconnected. CIAB identified nuclear verdicts arising from commercial auto accidents as a major source of pressure on umbrella business, while 40% of respondents reported a decrease in umbrella capacity during the second quarter.
AM Best data shows commercial auto has been one of the worst-performing property and casualty lines since 2012. The line recorded a combined ratio below 100 in only one year between 2012 and 2025, closing last year at 103.5.
Liability remains the deeper underwriting problem. Commercial auto liability has produced a combined ratio above 100 every year since 2014 and reached 113 five times. By comparison, physical damage recorded a combined ratio of 88.6 in 2024 and has not exceeded 100 since 2017.
Benoit said those pressures become concentrated in higher-hazard classes where vehicle schedules extend well beyond pickup trucks. Trailers carry their own coverage requirements, while heavier vehicles and more complex fleets create an aggregate exposure many carriers no longer want.
Rising repair severity has added to the problem, he added: a fender bender that once involved replacing a bumper may now require repairs to backup cameras, sensors and other embedded technology.
The contraction is not always visible through formal carrier exits. “In many cases, a carrier may technically still be in the market, but its appetite has narrowed enough that it is no longer a realistic option for clients, or its pricing may be too high for the insured to afford,” said Rajni Kapur, chief executive officer of All Solutions Insurance in California.
Brokers are also seeing greater scrutiny before carriers will consider quoting. Benoit said underwriting requirements have noticeably increased over roughly the past year. “We’re seeing a lot more photos. We’re just seeing a lot more information that’s being required of specific vehicles as well,” he said. “There’s just a lot more scrutiny, I think, from an underwriting standpoint.”
According to Kapur, carriers are examining loss history, driver quality, fleet size, operating radius, vehicle type, safety programs and overall risk management more closely. Heavier fleets, for-hire trucking, towing and delivery operations are among the hardest risks to place, particularly when the insured has adverse loss experience.
“It’s important to distinguish between carriers that will accept a submission and carriers that are actually prepared to quote competitively,” Kapur said. “The number prepared to quote competitively has declined considerably.”
That distinction is changing the broker’s role. When underwriting concerns are specific to the account, approaching additional carriers may simply generate additional declinations.
“Today, if the underlying risk characteristics are the issue, sending the submission to more markets doesn’t necessarily change the result,” Kapur said. “You may receive the same underwriting concerns from every carrier.
“We have to identify what is making the account unattractive and work with the client on their underlying risk profile.”
Surplus lines carriers have absorbed much of the business shed by the admitted market. Non-admitted carriers sit outside California’s prior-approval process, giving them greater flexibility over rates and terms. But the existence of capacity does not necessarily mean a competitive market. “If five or six insurers want an account, there’s an opportunity for competition to influence pricing and terms,” Kapur said. “If only one or two carriers are willing to consider it, the insured has far less negotiating leverage.”
The consequences extend beyond higher premiums. Kapur said affordability pressures are forcing some businesses to reduce their operations. “It is becoming very difficult for some clients to afford insurance, giving them no choice but to either shrink their fleet or, in some cases, close the business altogether,” she told Insurance Business.
For brokers, that makes renewal preparation more important than the length of the market list. Addressing poor driver records, adverse loss trends, weak safety controls or an unsuitable vehicle mix before approaching carriers may do more to improve a placement than another round of submissions.
