Commercial auto insurance premiums are climbing across California, and San Diego businesses feel the impact. Several factors are driving these increases from legislative changes to rising repair costs. Fortunately, there are proactive strategies businesses can adopt to mitigate these costs.​

Why Are Commercial Auto Rates Increasing?

  1. Higher State-Mandated Liability Limits

As of January 1, 2025, California has doubled its minimum liability limits for auto insurance to $30,000 per person, $60,000 per accident, and $15,000 for property damage. This legislative change, under Senate Bill 1107, aims to provide better financial protection but has led to higher premiums for both personal and commercial auto policies. ​

  1. Rising Repair and Medical Costs

The costs associated with vehicle repairs and medical treatments have surged, leading to increased claim payouts by insurers. This escalation contributes to the overall rise in insurance premiums. ​

  1. Increased Litigation and ‘Nuclear Verdicts’

There’s been a notable rise in large jury awards, often exceeding $10 million, in auto accident cases. Such “nuclear verdicts” have prompted insurers to raise premiums to offset potential losses. ​

  1. Distracted and Impaired Driving

The prevalence of distracted driving and driving under the influence has led to more accidents, increasing the risk profile for commercial drivers and, consequently, insurance rates. ​

Strategies to Reduce Commercial Auto Insurance Costs

  1. Implement a Robust Fleet Safety Program

Develop and enforce comprehensive safety protocols for your drivers. Regular training sessions, safety audits, and clear policies can reduce accidents and demonstrate to insurers your commitment to risk management. ​grangeinsurance.com

  1. Leverage Telematics and Usage-Based Insurance

Utilize telematics devices to monitor driving behaviors such as speed, braking patterns, and route choices. Sharing this data with insurers can lead to discounts through usage-based insurance programs. ​

  1. Optimize Vehicle Selection and Maintenance

Choose vehicles known for safety and reliability, and ensure regular maintenance to prevent breakdowns and accidents. Well-maintained fleets are less risky and can attract lower insurance premiums.

  1. Increase Deductibles Where Feasible

Opting for higher deductibles can lower your premium costs. However, ensure that your business can comfortably cover the deductible amount in the event of a claim. ​

  1. Bundle Insurance Policies

Consider consolidating your business insurance needs with a single provider. Bundling policies like general liability, property, and commercial auto can lead to significant discounts.

  1. Regularly Review and Update Coverage

Periodically assess your insurance coverage to ensure it aligns with your current business operations. Eliminating unnecessary coverage and adjusting to current needs can prevent overpaying. ​

 

San Diego-Specific Considerations

Operating in San Diego presents unique challenges, including dense traffic and higher accident rates in certain areas. Businesses should factor in these regional risks when selecting coverage and implementing safety measures.​

 

While rising commercial auto insurance rates pose challenges, proactive measures can help businesses manage and even reduce these costs. By focusing on safety, leveraging technology, and maintaining open communication with insurers, San Diego businesses can navigate this evolving landscape effectively.​

For personalized advice tailored to your business’s needs, consider consulting with a local insurance professional.