Hunter NelsonOwner of Nelson Insurance Agency

Trucking Insurance: How Companies Really Make Money

28 Apr 2026 · 1 min

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In this monologue, Hunter Nelson explains that trucking insurance carriers typically operate at an underwriting loss, achieving a true underwriting profit only about once every 13 years. Their overall profitability relies heavily on investment income generated from the premiums they hold, which adds a modest few percent return. Nelson emphasizes that despite low claim payouts, insurers must still account for the risk of catastrophic "nuclear" verdicts, which can dramatically affect profitability. He highlights that the underwriting loss, investment returns, and the probability of large verdicts together shape the economics of trucking insurance, challenging the common perception that insurers earn large margins from premiums alone.

Chapters

The thing is on it though, is that insurance companies, when it all is averaged out, they might— they typically, they're actually losing money. Insurance— trucking insurance companies make money once every 13 years, uh, for an underwriting profit. The other years, they're actually making money. The reason I keep insuring trucks is because of— invest that money, the investment premium dollars, and then they get their investment on it. So that's usually a couple percent there. So really, it's not like insurance companies are making crazy money. Now to get back to my point here, when it comes down to that stuff, there's a lot of different factors in there because where insurance companies really, uh, losing money on stuff, even if your law search has been phenomenal, is what are the risks that are applied here to lead to a nuclear, uh, what are the chances that if you've had $0 in claim payouts, but you've got a lot of factors that lead to a higher chance of a nuclear verdict,