Insurance Is Becoming One of the Biggest Threats to the Motorcoach Industry
For years I have heard operators complain about insurance.
Every renewal it seems to be the same conversation. Premium went up. Deductible went up. Another carrier doesn't want buses anymore. Your broker is shopping it around, but there aren't many places left to shop it.
None of this is really new to anyone who owns or operates buses.
What is new is that we finally have some numbers showing just how bad it has gotten.
The American Bus Association Foundation recently released preliminary findings from a national insurance study involving 260 completed operator responses.
The results honestly surprised me, even knowing how bad the insurance market has been.
98% reported their insurance premiums increased over the last five years. 53% said their premiums more than doubled. 49% are now paying at least $20,000 per power unit for liability insurance. And 71.2% said there are fewer insurance companies willing to even quote their business than there were five years ago.
That last number is a big problem.
Higher premiums are one thing. At least you can shop around and try to negotiate. But what happens when there isn't anyone else to shop?
That's where I think this gets dangerous.
We Keep Talking About Safety, But Look at the Numbers
Here is what stood out to me.
59.6% of the operators surveyed said they have not seen a major change in claim frequency over the same period. At the same time, 98.5% said they are using at least one form of safety technology.
Think about what has changed on buses over the last several years.
Cameras, GPS, electronic logs, telematics, driver monitoring, collision avoidance systems, better training and a lot more documentation.
Operators are spending money trying to become safer.
Yet almost everybody in this survey is paying more for insurance anyway.
I'm not saying insurance companies don't have legitimate reasons for increasing rates. Claim severity has gone up. The cost to repair equipment has gone up. Medical costs have gone up. Litigation is a major problem and everyone in transportation knows what a serious accident can turn into.
Lancer Insurance told METRO earlier this year that increased attorney involvement, litigation financing, medical costs and massive jury verdicts are all contributing to rising claim costs.
So there is another side to this.
But something still isn't lining up when 98% of operators report higher premiums while nearly 60% say their claim frequency hasn't materially changed.
That deserves a closer look.
The Small Operator Is Going to Feel This First
This is the part that concerns me the most.
The motorcoach industry is still largely a small-business industry.
The ABA Foundation's 2025 Motorcoach Census counted 1,891 companies operating 50,968 motorcoaches in the United States and Canada. More importantly, 87.3% of those companies operate fewer than 25 motorcoaches.
That's who we're talking about here.
Not just the big national companies. A huge portion of this industry is still small and locally owned operators.
The census also showed something else worth paying attention to. The number of motorcoaches increased 4.7%, passenger miles increased 8.9% and total miles traveled increased 18.2%.
But the number of carriers declined 3.5%.
The industry is moving more people with more equipment, but there are fewer companies doing it.
Insurance isn't the only reason. We have driver shortages, parts costs, labor costs, equipment prices, financing and everything else operators deal with every day.
But insurance is becoming another advantage for the larger operator.
A company with 100 buses has purchasing power. They have dedicated safety people. They can absorb a bad renewal better. They may have access to insurance programs a five-bus or ten-bus company simply doesn't have.
The smaller operator doesn't have that cushion.
If you're running five coaches and your liability premium jumps another $10,000 per bus, that's $50,000 you have to find somewhere.
You either raise your rates, cut somewhere else, park equipment or eventually decide it isn't worth doing anymore.
And apparently operators are already thinking about that.
39% of the operators surveyed said they have considered selling or closing their businesses as insurance and other operating pressures have increased.
That's not a small number.
Eventually the Customer Pays
There is another misconception about this business that comes up all the time.
People think operators can just absorb these increases.
They can't.
Nearly 85% of the operators surveyed said they have already increased customer pricing because of insurance.
That's exactly what happens.
The insurance company charges the operator more. The operator charges the charter customer more. The school pays more for the field trip. The church pays more for the bus. The tour company pays more. The college pays more for its athletic transportation.
Eventually somebody pays for it.
And there is a limit to what customers will accept.
We already compete against airlines, rental cars, trains and people simply deciding not to travel. You can't keep adding thousands of dollars to the operating cost of a bus and believe it won't eventually affect demand.
$20,000 Per Bus
Nearly half of the operators surveyed are paying at least $20,000 per power unit for liability coverage.
Take a 10-bus company.
That's $200,000 a year.
And we're only talking liability.
We haven't gotten into physical damage, workers' compensation, property insurance and everything else it takes to protect the business.
Roughly one-third of the survey respondents said insurance is now consuming 20% or more of their total operating expenses.
Think about that.
Twenty cents out of every operating dollar going toward insurance before you put diesel in the bus, pay the driver, make the bus payment, buy tires or fix anything.
There aren't many businesses that can keep taking increases like that forever.
And Now We're Talking About Raising Federal Insurance Requirements?
This is where policymakers need to be careful.
The federal minimum liability requirement for large for-hire passenger carriers is already $5 million.
There has been discussion for years about increasing federal minimum financial responsibility requirements.
According to this survey, 82% of operators expect an increase in the federal minimum requirement would negatively affect their businesses. More than 65% believe the impact would be severe.
Before Washington raises anything, I think we need to understand the market we already have.
If operators are already struggling to find carriers willing to write the coverage they need today, what happens if the required limit goes higher?
Does another insurance company suddenly enter the motorcoach market?
Probably not.
Does the operator magically get more money?
Definitely not.
The cost goes somewhere.
This Is Bigger Than Insurance
What worries me is what happens five or ten years from now if this keeps going.
We're already seeing fewer carriers while the remaining industry operates more equipment and more miles.
There is nothing automatically wrong with consolidation. Strong companies buying other companies is part of business.
But we should be paying attention to why some operators are deciding to sell.
If a good operator with a clean history, experienced drivers, maintained equipment and modern safety technology finally says, "I can't afford to insure this anymore," did we really make transportation safer?
Or did we just eliminate another small business?
I've spent enough time around this industry to know that most operators aren't asking for a free ride. They understand insurance is expensive because moving 50 people down the highway carries serious responsibility.
But there has to be some connection between actual risk and what operators are being charged.
That's why I think this ABA Foundation study matters.
For once we aren't just hearing somebody at a bus convention saying their renewal went through the roof.
Now there are numbers behind it.
And the numbers aren't good.
Sources
American Bus Association Foundation — 2025 Motorcoach Census, May 2026
About the Author
Danny B. works in the motorcoach and ground transportation industry with experience in operations, vehicle sales, finance and fleet management. Through BTE Group LLC and The Motorcoach Insider, he writes about the issues affecting operators behind the scenes, especially the ones that don't always get talked about publicly.
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