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Insurance & Risk ManagementRegulationTrucking

Independent truckers warn against crash liability proposal

Legislation that would increase the minimum insurance liability coverage required for interstate trucking from $750,000 to almost $5 million would put more small owner-operators out of business, independent operators claim.

In a July 29 letter warning against the proposal, which was introduced in the U.S. Congress on July 16, the Owner-Operator Independent Drivers Association (OOIDA) told lawmakers that while the bill’s supporters contend it would increase safety by weeding out unsafe drivers and equipment, there is no correlation between insurance coverage and highway safety.

“In fact, increasing insurance minimums would likely force many owner-operators – who are collectively among the safest, most experienced drivers on the road – out of the industry because premiums would become unaffordable,” wrote OOIDA President Todd Spencer. “As a result, H.R. 3781 would actually decrease highway safety, not improve it.”

OOIDA also asserts that the bill’s supporters falsely assume that the insurance industry only provides coverage at the federally mandated levels. However, “most motor carriers are insured at least $250,000 above the minimum threshold because that’s what the market dictates.”

There is evidence that insurance costs may already be too big a burden for smaller trucking companies. Indiana-based A.L.A. trucking announced in June that it was shutting down and laying off its 41 drivers as a result of insurance costs doubling.

The legislation, which was named the “Improving National Safety by Updating the Required Amount of Insurance Needed by Commercial Motor Vehicles per Event (INSURANCE) Act of 2019,” was introduced by representatives Chuy Garcia (D-Illinois), Hank Johnson (D-Georgia) and Matt Cartwright (D-Pennsylvania) at a press conference in support of truck crash victims.

In addition to improving safety, the bill is aimed at improving medical care compensation to families affected by crashes.

“With trucks getting bigger and highways becoming more crowded, our country has experienced too many horrific truck accidents that change Americans’ lives forever,” commented Cartwright when the bill was introduced. “And since the minimum liability insurance for trucks hasn’t changed in nearly four decades, we’ve seen how victims, their families, hospitals and our strained social safety net are forced to foot the bill for irresponsible driving.”

But Cartwright has other motivations for sponsoring the legislation, according to Spencer, who informed lawmakers that Cartwright “made a small fortune by suing trucking companies” before being elected to Congress. “In fact, Rep. Cartwright remains a profit-sharing member of his family’s law firm, who very publicly boasts about winning major settlements from crashes involving trucks,” Spencer wrote.

OOIDA also maintains that Cartwright’s wife is currently chair of the Trucking Litigation Group within the American Association for Justice, a trial lawyers’ lobby supporting the bill. “This is both convenient and brazen,” Spencer said. “However, to be clear, none of this constitutes an ethics violation because H.R. 3781 would benefit all trial lawyers – not just its legislative champion and his family’s law firm. Ultimately, it’s merely another reason this bill is appalling.”

Cartwright’s office was not immediately available to respond for comment.

The Truck Safety Coalition, which also supports the measure, rejects claims that the bill is not about safety.

“By increasing the federal minimum to $4.9 million, an insurance company is much more likely to check out a trucking company’s safety record because they’re not going to want to risk paying out that higher amount,” Harry Adler, the group’s executive director, told FreightWaves. “So this legislation would help in the effort to provide safety oversight. The fact is, there are unsafe trucking companies out there that and nobody wants these bad actors to tarnish the rest of the industry.”

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John Gallagher, Washington Correspondent

Based in Washington, D.C., John specializes in regulation and legislation affecting all sectors of freight transportation. He has covered rail, trucking and maritime issues since 1993 for a variety of publications based in the U.S. and the U.K. John began business reporting in 1993 at Broadcasting & Cable Magazine. He graduated from Florida State University majoring in English and business.

10 Comments

  1. The two Marxists that are pushing that bill both should be tarred and feathered. If this makes it to law there will be dramatic and violent results.

    1. Might as well call it the “let’s put money in my families pocket” bill. They said the minimum hasn’t gone up, but they said standard rate is already well over minimum.
      They really don’t care anymore. Wait until they have to drive to Illinois to pick up groceries, I guess.

    2. You are right. The only difference is all major carriers like swift and werner will be unaffected. They self insure. As a result no high premiums. So where everyone else will be paying at least triple. They pay nothing.

    3. Well in order to due certian jobs we up ours to a million liability ,,white a 3 million umbrella,,that’s the only way it’s affordably,,high if it goes to a 4 million across the board liability ,,we’re done,,,

  2. This is bull shit what they need to do to fix this issue is go back to the old law implemented with the eld so drivers can drive all day without going over there 11 hours drive time so they can pull over and takes naps as needed so they want ever be tired… instead of forcing these guys to drive 11 hours straight with a 30 min break and no rest at all so they can make the money they need for thrre Bill’s and two they need to put a regulation in place that will put a bottom to the market so we would be gauranteed to make the money we need to support our selves and our family and stop these brokers and companies from ripping us off with these low as rates so we can make the money we need and want have to work so hard… hell do u think we want to work round the clock like we do? Hell no, these drivers do it cause they have no choice with these low as rates from the brokers and companies stealing all our money and these damn elds and hos hours force us to have to I bet if you truly want to solve these issues just change these things and watch how things change.. I basically gave yall a road map now do something about it and things will change for the better watch

  3. So OOIDA pushed to increase broker bonds based on adjusting for inflation but is against doing the same here?

    This is feeling like Chicken Little to me. Increase the broker bond and the small broker will go out of business. New brokerages are opening and going strong.

    The added burden of the ELD will put small carriers out of business. But here we are talking about all the excess capacity and the big boom in new carriers last year.

    Now, with no numbers, we are hearing again how this will put people out of business. Has an insurance company given an example of the increased insurance for a small carrier based on a mandated increase in coverage? That is far different than someone asking for that increase now. Underwriters assume if they need the increase that there is increased risk.

    Until we see how insurance companies rate the risk based on increased mandated coverage this is a lot of speculation.

    And OOIDA should have those numbers since they are partially supported by their insurance company.

  4. I don’t always agree with OOIDA but Mr. Spencer is the only one applying logic and reason in this article. Most carriers, excluding those hauling HAZMAT, already carry $1 mil policies. Greed from lawyers puts margin at risk more than just about anything in trucking. That risk has to be accounted for by insurance companies and carriers. If a carrier has some claims, and lets not pretend that all of these claims/payouts are legit and “earned” – see Werner in TX – the insurance company is going to jack the carrier’s premiums even more. There’s no doubt that bad things/accidents happen but the judgments against carriers can be insane. With this potential exposure, it certainly makes it harder for carriers to increase pay to drivers — obviously, I’m sure anyone posting here agrees that driver pay in most parts of the industry needs to rise.

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