We consulted Matt Oakes, AVP Risk Advisor at Risk Strategies, regarding insurance matters related to natural disasters affecting trucking operations.
Impact of Natural Disasters on Insurance Costs
Last year, the insurance sector recorded 27 weather-related events leading to at least a billion dollars in insured losses, including hurricanes, floods, wildfires, and tornadoes. Overall, these natural disasters amounted to $140 billion in insured losses, significantly higher than the 10-year average of $94 billion.
The wildfires in Los Angeles in January 2025 alone resulted in losses estimated between $30 billion and $40 billion.
Preparing for Disasters
This article is the fourth in a series focusing on how trucking fleets can prepare for various natural disasters.
Part 1: Is Your Trucking Fleet Ready for a Disaster?
Part 2: Preparing for Hurricane Season
Part 3: Developing a Business Continuity Plan
Part 4: Tackling Natural Disasters and Insurance
Part 5: Disaster Preparedness Checklist for Trucking Fleets
Part 6: Essential Emergency Exemptions for Truckers
The Rising Cost of Insurance
The increasing likelihood of natural disasters and the corresponding rise in insurance costs were highlighted in the State of the Insurance Market 2025 Outlook by Risk Strategies. For trucking businesses, natural disasters threaten drivers, cargo, and equipment. Events like flooding, hurricanes, and wildfires can cause rerouting and costly delays while damaging facilities and equipment. Rebuilding expenses are also rising due to labor and material shortages.
Key Considerations for Trucking Fleets
According to Matt Oakes, the best approach for fleets to ensure adequate coverage is to carefully review their insurance policies with their broker before finalizing them. Many trucking companies only obtain the minimum insurance required by law or contractual agreements, which can lead to insufficient coverage in the event of a significant loss due to a natural disaster.
Documenting Assets and Claims
Oakes advises that large fleets should have a monthly reporting system for their auto physical damage coverage. By regularly notifying their broker about asset values and conditions, they can simplify the claims process in the event of a loss. After a disaster, it is crucial to document all details and provide this information to the insurer as soon as possible.
Communication Strategies During Disasters
Fleets need to prioritize getting drivers to safety before a major natural disaster hits. If there are assets that cannot be relocated, it is essential to document this and notify the insurer prior to the disaster. Coverage for preventative measures, like moving vehicles or temporary storage, typically depends on the individual policy.
Long-term Implications of Natural Disasters
Each event, such as a flood or wildfire, can influence future insurance premiums and the insurability of a fleet. Insurers consider the financial impact of losses during the underwriting process, which may result in increased costs at renewal. Additionally, property policies may introduce specific deductibles related to climate risks, although these often do not lead to lower premiums for the insured.
