It was an unexpected hit: Canadian long-haul trucking operations prepared for the usual 3% bump in their insurance rates this year felt blindsided by hikes of 12% to 15%. “And if you previously bought unsustainably cheap coverage from a bargain-basement insurance carrier,” says John Chippendale, vice-president of Marsh Canada, “you may see your rates go up 50% or 100%.”

Why so high?

Insurance companies make money by collecting premiums and investing what they don’t pay out in claims. With the stock market sputtering, some of those investments just haven’t paid off, Chippendale explains. Factor in big accident claims-often in U.S. dollars-and the losses to insurers have been staggering. Several companies have left the fleet insurance business, while others have struggled with wild price fluctuations, poor claims service, and renewal uncertainty.

If there’s a silver lining to the stormy rate forecast it’s that companies that continue to write long-haul business are in it for the long haul. “The handful that remain understand the market and are committed to providing products with real value,” says Mark Ram, president of Markel Insurance.

They are also getting more stingy about who they do business with. “Insurance companies can’t afford to give any latitude to a carrier with a poor safety record just so they can get the business,” Ram says.

Already, general upward pressure on premiums has caused more truck fleets to buy liability insurance only, finding it more economical to cover their own damages and self-insure wherever they can. That suits some insurers just fine, notes Chippendale: a lack of experienced drivers at large fleets has historically translated into higher claims. When AXA Canada sold its fleet business last year, it held on to the owner-operator business because their claims are fewer.

“The need to control insurance costs should make fleets think twice about filling seats with inexperienced drivers, who represent a higher risk,” Ram adds. “Everyone is pinching pennies these days. Insurance is a cost you can control-just by operating more safely and responsibly.”