2026 MARKET TRENDS
Logistics, Transportation & Relocation
Key Takeaways
- Litigation funding, medical inflation and nuclear verdicts continue to drive higher claim severity
- Tech-heavy vehicles combined with repair and parts inflation are elevating physical damage costs
- Inconsistent use of telematics and camera data limits the impact on driver behavior and risk reduction
- Heavy reliance on 1099 drivers in final mile delivery contributes to turnover and uneven safety performance
- Ongoing driver shortages are pushing fleets to hire less experienced drivers, increasing claim frequency and severity
The logistics and transportation sector faces significant headwinds that continue to reshape both operations and insurance outcomes.
Overview
The logistics and transportation sector faces significant headwinds that continue to reshape both operations and insurance outcomes. Litigation funding, medical inflation and nuclear verdicts are driving higher claim severity, while persistent driver shortages push fleets toward less experienced labor. This combination increases accident frequency, severity and overall claim costs.
Rising repair and parts inflation continues to drive higher physical damage costs, particularly for vehicles equipped with advanced technology. Ongoing reliance on 1099 drivers in the final mile delivery sector contributes to higher turnover and inconsistent safety performance. Although many fleets have adopted telematics and camera technology, inconsistent use of this data limits its ability to meaningfully influence driver behavior and reduce risk.
Market Conditions
Carriers across the trucking and final mile sectors approach new business and renewals with heightened caution. Auto liability remains under the greatest pressure as claim severity and litigation continue to drive cost increases. While physical damage costs show modest stabilization, they remain elevated due to rising repair expenses and ongoing technology calibration requirements.
Umbrella capacity remains available, though carriers have tightened attachment points and reduced total limits, particularly in challenging legal venues. Underwriters now place greater emphasis on driver quality, telematics utilization, prior loss experience and turnover rates when evaluating risk.
Several key drivers influence these conditions:
Inflation:
Rising costs for medical treatment, repair labor and parts continue to keep severity elevated across liability and physical damage
Litigation:
Litigation funding and larger jury awards drive settlement creep and increase pressure on excess layers
Driver experience:
Ongoing shortages and turnover reduce overall experience levels behind the wheel
Technology:
Tech-heavy vehicles increase repair times, calibration costs and vehicle downtime
Regulation:
Heightened focus on worker classification pushes fleets to strengthen contractor documentation and compliance
Impacts & Considerations
Organizations face higher insurance costs across auto liability, physical damage and umbrella lines. Stricter underwriting standards limit access for fleets with recent losses or high turnover, making competitive options more challenging to secure. Carriers also continue to raise deductibles and retentions to manage severity and pricing. Before quoting or renewing, carriers increasingly require detailed safety data, motor vehicle records, telematics insights and clear driver classification information.
Firm market conditions are expected to persist through 2026, with no meaningful relief in auto liability severity. Physical damage costs may moderate if supply chains stabilize, though technology-driven repair and calibration expenses are likely to maintain a pricing floor. Litigation pressure remains elevated, keeping excess and umbrella markets cautious on limits. Fleets with strong safety cultures and disciplined telematics use retain the greatest leverage, while final mile networks with high 1099 utilization and turnover should expect continued pressure.
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