Volume 2, Issue 9 – May 15th, 2014
The Federal Motor Carrier Safety Administration announced plans to raise the liability insurance minimum for commercial trucks from the current $750,000 per truck, provoking both criticism and support from the trucking industry.
In a recent report to Congress FMCSA said it has formed a rulemaking team to evaluate the appropriate level of financial responsibility for trucking and made it one of the agency’s high-priority rulemakings.
FMCSA cited a recent study showing that while catastrophic truck crashes are rare, the costs from resulting severe and critical injuries can exceed $1 million, primarily due to increases in medical expenses and other crash-related costs.
American Trucking Associations disagreed, saying it has seen no evidence that increased insurance minimums will lead to improved highway safety.
The Owner-Operator Independent Drivers Association says the insurance increase “would be a death nail for small businesses” in trucking.
“The agency seems to be bowing to the economic objectives of the personal injury attorneys and mega-trucking companies who have been campaigning for higher insurance requirements,” said OOIDA Executive Vice President Todd Spencer.
“Trial lawyers will see windfall payouts in the increases, and big trucking companies — who already use special exceptions in the law to avoid buying insurance on the open market — see an opportunity to drive up business costs and do away with their small-business competitors,” he added.
A group of seven prominent carriers called The Trucking Alliance supports FMCSA’s action, noting its study found that 42% of almost 9,000 accidents resulted in settlements above the $750,000 threshold, creating greater financial exposure for both carriers and the public.