Last year, the insurance industry saw 27 weather events that resulted in at least a billion dollars in insured losses, including hurricanes, floods, wildfires, and tornadoes. Overall, last year, natural disasters resulted in $140 billion in insured losses, well above the 10-year average of $94 billion.

The January 2025 Los Angeles wildfires alone caused $30 billion to $40 billion in losses.

The rising risk of natural disasters and the resulting increased insurance costs was brought up in the State of the Insurance Market 2025 Outlook from Risk Strategies.

For trucking, natural disasters put drivers, equipment, and cargo at risk. Flooding, hurricanes, and wildfires can force truckers toreroute, causing costly delays. They can damage fleet yards, terminals, and maintenance facilities. And rebuilding costs are rising due to shortages in labor, fuel, and building materials.

We asked Matt Oakes, AVP Risk Advisor at Risk Strategies, a few questions about insurance and natural disasters for trucking operations.

Q: What do fleets need to consider when buying insurance to be prepared for natural disasters? 

A: The most effective way for fleets to determine they have sufficient coverage is to review their policies prior to binding with their broker. 

One issue trucking companies run into is they only acquire insurance to meet the legal requirement of the government or contractual requirement of their clients. Should they sustain a large loss as a result of a natural disaster, it’s likely there is insufficient coverage for these trucking companies.

Q: What steps should a fleet take to document assets and coverage in advance of a natural disaster? How important is it for fleet managers to update insurers with current asset locations, values, or usage patterns?

A: Most large fleets have monthly reporter or an equivalent recurring reporting system for auto physical damage coverage. If they are properly notifying their broker and insurer on a monthly basis, then they shouldn’t have issues claiming these assets in the event of a loss. 

Prior to a loss proper reporting can streamline the claims process. Post loss, the insured needs to promptly document all loss information and provide it to their insurer ASAP. 

Assets are expected to always be on the move, so location is less important unless the power unit is somewhere it shouldn’t be.

Q: If a fleet has assets in an area under threat from a natural disaster, what is the best way to communicate with the insurance provider?

A: Fleets are strongly recommended to get their drivers to safe areas prior to any large natural disaster. Should there be no clear exit or an asset that is unable to move, the insured should document this and notify their insurer prior to the loss.

Q: Does insurance typically cover expenses for preventative actions like relocating vehicles or storing them temporarily? 

A: This is dependent on the policy but not likely.

Q: What should drivers or dispatchers do if a truck is caught in a natural disaster — are there protocols insurers recommend?

A: Certain losses are unavoidable. The main concern is getting your employees and contractors to a safe area.

Q: What should fleet managers do immediately after a disaster to streamline the claims process? What documentation or evidence do insurers need? 

A: Post loss, the insured needs to promptly document all loss information and provide it their insurer ASAP.

Q: How can one event, like a flood or wildfire loss, affect a fleet’s future premiums or insurability? Are there risk-reduction actions that can help lower premiums after filing a claim for a natural disaster?

A: All losses are weighted by dollar amount in the underwriting process. Unfortunately, in these situations the insurer is also sustaining a large financial loss and will likely need to price that in at renewal.

Q: How is the insurance industry evolving to keep up with the increasing frequency and severity of weather-related events? For instance, are insurers offering any new products or services tailored for increased climate-related risks? 

A: Property polices have been known to implement “hurricane” deductibles to reduce the insurers risk, but there is not typically a premium reduction for the insured associated with this.

When it comes to climate-related risks, the best way to protect your business is to:

• Properly insure all assets at policy inception.

• Promptly notify your insurer of any and all changes throughout the year. 

Trucking companies that run their business with these two rules in mind achieve the best results after natural disasters occur.