The American Bus Association Foundation (ABAF) released initial findings from its national study of the insurance crisis facing the U.S. motorcoach industry, offering new insight into rising premiums, dwindling coverage options, and the growing financial burden on operators and their customers.

Matt Daus presented the preliminary findings during the Bus Industry Safety Council Summer Summit in Pittsburgh.

The presentation marks an important milestone in a broader ABA Foundation research initiative designed not simply to document rising insurance costs, but to understand what is driving them and identify practical industry and public policy solutions.

“This is exactly the kind of work the ABA Foundation should be doing — taking an issue our operators are confronting every day, putting real data behind it and using that evidence to drive solutions,” said Fred Ferguson, President/CEO of the American Bus Association (ABA). “The initial findings confirm that we have a serious problem. But they also raise important questions about whether insurance pricing is keeping pace with the actual risk profile of our industry. We are not finished answering those questions.”

The Foundation survey generated 260 completed responses from 320 participating companies, providing a substantial initial picture of insurance conditions across the industry. The results show that rising insurance costs are no longer confined to operators’ balance sheets; they are increasingly affecting customer pricing, operating decisions, and the long-term viability of motorcoach businesses.

• 98% of respondents reported insurance premium increases over the past five years, while 53% said their premiums more than doubled.
• Nearly 85% of operators reported raising customer prices in response to higher insurance costs, showing that the impact is increasingly being passed through to charter, tour and other motorcoach customers.
• For roughly one-third of operators, insurance now represents 20% or more of total operating expenses.
• 49% of operators now pay at least $20,000 in liability premiums per power unit.
• 59.6% reported no major change in claim frequency over the same period, while 45% reported increased claim severity.
• 98.5% reported using at least one safety technology, with telematics and electronic logging devices among the most widely adopted.
• 71.2% reported fewer insurers willing to quote their business, and 83.5% said insurance availability has worsened compared with five years ago.
• 39% said they have considered selling or closing their businesses as insurance and other operating pressures have increased.
• Reinsurance market conditions, litigation abuse and nuclear verdicts emerged among the most frequently cited drivers of rising insurance costs.
• 82% expect an increase in the federal minimum financial responsibility requirement to negatively affect their businesses, with 65.4% anticipating a severe impact.

Taken together, the initial data show that operators are investing in safety technology and most report no material increase in claim frequency. At the same time, premiums continue to rise, and fewer insurers are providing motorcoach coverage, the Foundation said.

Insurance costs are also accounting for a larger share of operating expenses, with operators reporting that some of those increases are being passed on to customers and, in some cases, affecting decisions about whether to remain in business.

The ABAF launched the project with a five-part research plan intended to collect data on insurance conditions affecting the motorcoach industry and develop findings and recommendations.

The research began with a review of insurance-market data, industry research, federal and state laws, litigation patterns, and stakeholder perspectives. The Foundation then conducted a national operator survey and comparative analysis examining differences between motorcoach operations and other commercial transportation sectors.

The next phase will examine factors associated with premium increases, safety and loss-mitigation practices, regulatory and legislative issues, and alternative insurance structures. Researchers will also review nuclear verdicts, staged accidents, and insurance fraud as potential factors affecting insurance costs and capacity.

The Foundation plans to survey insurance carriers and brokers, conduct follow-up interviews with operators, develop case studies, and engage insurance regulators and other stakeholders. The additional research will compare operator responses with information from insurers, brokers, and regulators.

“These findings give us the operator side of the equation, and that is essential — but it isn’t the entire equation,” Ferguson said. “We need to hear from carriers, brokers, regulators and other stakeholders. We need to understand what is happening with loss severity, litigation, reinsurance, fraud and capacity. Then we can distinguish what is actually driving costs from what we believe is driving them.”

The research will also inform ABA’s engagement with the Federal Motor Carrier Safety Administration as federal policymakers consider changes to minimum financial responsibility requirements for interstate motor carriers.

The Foundation plans to release a draft report for industry and stakeholder review before issuing its final findings and recommendations. The completed study is scheduled to be presented at ABA Marketplace in Calgary, Alberta, Feb. 6 to 9.