Commercial auto insurance rates have been on the rise since 2011, increasing often by more than 10% a year as accidents and claims costs have soared.

The trucking industry has been the hardest hit by the steep increases, and there are a number of factors contributing to the rate hikes, according to a recent study by Risk Placement Services. One of the biggest factors is that insurers have had trouble keeping up with increasing accidents and spiraling claims costs, leaving them in the red for most of the past decade.

Huge court verdicts, higher maintenance expenses, reduced freight demand and poor infrastructure, compounded by an aging workforce and a driver shortage, have all resulted in higher insurance rates, according to the study. Here’s what’s in play:

Good drivers are aging and there are fewer of them – Half of all long–haul truck drivers are over 46 years old. The minimum age for obtaining an interstate commercial driver’s license is 21, and many insurers prefer drivers no younger than 24

As the industry rushes to hire more drivers, who are often in their 20s, they have to contend with having more inexperienced drivers who are more likely to be involved in accidents.

Jury verdicts are huge, and growing – The number of transportation industry damage awards exceeding $10 million for injuries and property damage has been increasing since 2012. Claims for bodily injuries can sometimes take years to resolve, causing insurers to initially underestimate the eventual loss amounts.

High maintenance costs – While advanced technology has made trucks safer, that tech is expensive to maintain, repair or replace. The equipment is costly and mechanics with the technical skills to fix it can be hard to find.

However, poor maintenance makes accidents more likely and insurance more expensive.

Distracted driving – Truck drivers and those they’re sharing the road with continue looking at their phones, eating, looking at their navigation systems, and taking their eyes off the road with increasing regularity. This increases the frequency of accidents.

Crumbling infrastructures – America’s crumbling roads and bridges are increasing wear and tear on the trucks traveling on them, making accidents more likely.

Expensive cargo– The goods inside the trucks are also requiring larger amounts of insurance at higher rates. For example, shipments of electronics and medicine are magnets for thieves. And if a flatbed trailer carrying expensive machinery flips over, the cargo will likely be damaged beyond repair and the insurer has to pay to replace it.

Products like food, flowers and some medicines must be refrigerated; if the driver makes a mistake, the entire lot may be ruined.

The takeaway

While this speaks more to Commercial Auto, the impact is felt across the Auto Insurance industry.  With time things will hopefully improve.  This does create a situation where drivers with no claims and no violations are seeing higher rates.  While upsetting, this further illustrates the problem where increased rates are a way to keep adequate claim reserves.  Along the way the insurance industry will also be coming to terms with self-driving technology and the increase in electric cars.    Interesting times continue.