Speak Up For Increased Trucker Minimum Insurance; Rally With Us To Be Heard Above the Vocal Opposition

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With the Federal Motor Carrier Safety Administration (FMCSA) in the process of considering a rulemaking to increase the minimum liability, NOW is the time to speak up in support of increasing minimum liability insurance for trucking companies.

Please take 5 minutes to submit a comment to the Federal Motor Carrier Safety Administration supporting an inflation adjustment of liability insurance requirements that have been unchanged since the Reagan Administration. It is critically important for truck accident victims (often truck drivers), who almost never get a full recovery even when receiving policy limits.

To submit a comment to the FMCSA, go here and click on Submit a Formal Comment: https://www.federalregister.gov/articles/2014/11/28/2014-28076/financial-responsibility-for-motor-carriers-freight-forwarders-and-brokers

Note: If you have already signed the AnnaLeah & Mary Petition, you can also individually sign the Federal Register. I have verified this with the administrative official at FMCSA who posted our petition to the Public Comments.

In your own words, tell FMCSA that you think it is important for them to proceed with the rulemaking to raise the minimum liability insurance for truck drivers.

The deadline for submitting Public Comments is FEBRUARY 26.

What follows is our Public Comment on this issue. . .

A fair-minded, thoughtful citizen would evaluate this issue from every angle and make comments accordingly. As parents of two daughters, AnnaLeah (17) and Mary (13), who are no longer with us due to a truck crash on May 4, 2013, that is what we tried to do–and have continued to do–in the aftermath of this unimaginable tragedy.

Our story and the changes we are trying to make–including increased minimum liability insurance for trucking–can be found in great detail at http://annaleahmary.com/ .

We have not merely reacted emotionally but have gathered facts and even played the devil’s advocate in questioning our own thoughts and actions. As we read the comments from others, we too often find that others are less circumspect. Let me try to address some of the factors involved in this complex issue.

Perhaps the simplest thing to say is that our first acquaintance with this issue was when we were told by our U.S. Senator, Richard Burr (R-NC), that the Secretary of Transportation actually has the authority to raise the level of the minimum liability insurance for truckers. This was intended when Congress gave DOT the mandate for this regulation; nonetheless–despite inflation–DOT has not taken action to bring about an increase since it was set at $750,000 in 1980–over 35 years. Adjusted for the rate of medical inflation, the $750,000 minimum would be over $4.4 million today.

Is this logical? Is it common sense? Would it be acceptable for say your salary/wages? Many others have written on the mathematics of this, e.g., you can find a detailed analysis at this website, http://saferhighways-oneclickpolitics.nationbuilder.com/ , with some of the key points listed below:

  • The purpose of insurance is to spread risk for catastrophic loss.
  • One of the original purposes of federally-mandated insurance minimums was increased safety entry standards for commercial truck drivers who wish to transport people and goods. This continues to be a goal of insurance—the driver who can’t afford insurance also can’t afford routine maintenance of brakes, tires and other equipment.
  • The safer a company is, the lower its insurance rates.
  • The FMCSA’s report to Congress gave the legislative history of the 1980 minimum insurance levels. Part of that history is that minimum levels were set to ”assure the public safety is not jeopardized”. Another part of that history was setting insurance minimums to achieve a level ”sufficient to require on site inspection by the insurance company with minimums to be updated regularly.”
  • It is basic economics that all prices must eventually be adjusted for inflation. The time has passed to adjust the minimum insurance limits for inflation.

Secondly, I would like to address the concern that many trucking companies–particularly the smaller ones–keep bringing up. They are convinced that if the minimum level is raised, their premiums will skyrocket and consequently put them out of business.

On April 17, 2014, OOIDA, which is the Owner-Operator Independent Drivers Association http://www.ooida.com/,  wrote about this in a press release (http://www.ooida.com/MediaCenter/PressReleases/pressrelease.asp?prid=344 ):

FMCSA acknowledges that more than 99 percent of commercial vehicle accidents are readily covered under current requirements and that they have not done an assessment of the financial impact that increased requirements would have on small businesses. 

“Even though the agency’s report confirms that fewer than one percent of all truck-involved accidents result in injuries or property damage that exceed current insurance requirements, it seems pretty clear they plan to raise those requirements anyway,” said Todd Spencer, executive vice president. 

OOIDA contends that an increase in insurance would be a death nail for the small businesses that comprise over 90 percent of the trucking industry.

In response to OOIDA’s comment about “fewer than one percent,” our son Peter made this observation prior to our meeting with FMCSA on May 5, 2014,

The 1% issue is at best a red herring. Refusing to raise a limit because such a small percentage reach the limit only indicates that the increase in cost should be minimal. It can’t be both ways, either this increase should raise the cost of doing business or the effect should be minimal.

This isn’t life insurance where all the money is always paid out. Nor is this homeowner’s insurance in which you have a set amount of house that can be destroyed. This is liability insurance in which the amount paid out is based on the amount of damage being done. If such a small percentage of claims reaches the limit, then greedy lawyers, increased costs, and mythical “windfall” payments are all proven absurd or irrelevant. 

What we actually have here is discrimination against the minority. “You are so small a portion of the people we harm we are not obliged to deal with you fairly.” Under such logic, they might as well suggest that they shouldn’t be compelled to have insurance at all.

Furthermore, not everyone in the trucking industry would agree with OOIDA. We noted a Public Comment on December 3, 2014, by Brian Taylor as a spokesperson for a trucking company ( http://www.regulations.gov/#!documentDetail;D=FMCSA-2014-0211-0057 ):

We are a 23 truck fleet and carry 25 million in liability insurance. We carry that much to protect not only us but our customers. The argument that only 1 % of the claims exceed the current threshold for insurance makes no sense. You carry insurance to cover you no matter what happens. 1 % exposure is too much. The fact that it seldom happens makes the coverage cheap. The actuaries price according to probability. I don’t believe that this coverage will be cost prohibitive unless the carrier has a dismal safety rating in which case they shouldn’t be in business. When carriers don’t carry enough coverage the expose responsible carriers, shippers and the general public. We need responsible carriers, pricing their services correctly to cover all costs and excepting responsibility for the liability created by their business. Skirting this liability and charging for services is deceptive to shippers and puts the public or state at financial risk in the form of a claim that is part of a service they get no remuneration for. When you provide a service, charge fees and profit you must also be responsible financially which means carrying adequate insurance.

I want to say a few additional things, in response to trucking industry concerns about a raise in premiums.

In preparing to travel to Washington,  DC, on May 5, 2014, to present over 11,000 AnnaLeah & Mary Stand Up For Truck Safety Petitions to DOT, I wanted to have accurate information to be able to intelligently discuss this issue and our concerns with DOT administrative officials. As a result, I found out some interesting information by making phone calls to insurance companies.

It is very difficult to get information on trucking insurance rates unless you are actually applying. And the information which I got included this (from my email correspondence to family members where I recorded my phone calls in April & May 2014):

  • I could not get anything from Travelers about internal company information. She told me that I could submit a request for information in writing to “Procurement” with my company name, research I am doing, reasons for wanting the information and general questions. They will respond–even if (probably) only to say  that they cannot give me any information.
  • Also, one of the first things which I found out was that Geico transfers calls requesting information about trucking insurance to OOIDA agents! I did not finish that  call.

I was suddenly enlightened to find out that OOIDA is actually–among other things– a large, for-profit insurer of owner-operator truck drivers. That set off a lot of red flags in my mind. How much control do they actually have over the premiums which most independent truck drivers end up paying? http://www.ooidatruckinsurance.com/

Aside from that, many of the truck drivers/companies which I see making comments complain about how the premiums will skyrocket. But on what are they basing that opinion?

John Lannen, executive director of the Truck Safety Coalition, has shared background information with us which he has gathered from numerous sources, presentations, and conversations regarding the economics of additional insurance coverage for motor carriers.  It turns out that the first million dollars’ worth of  trucking insurance is the most expensive and each incremental amount is cheaper.  Additional points include:

$1,000,000 in carrier liability coverage per unit can range from $4,500  – $8,000.  The FMCSA used an estimate of $5,000 per unit for the first $1M in their study.

– In today’s marketplace, the second million is quite a bit more affordable, even for small fleets.  A cost estimate for an additional $1M coverage (to raise the limit to $2M total) is $1,000 to $1,500 for the second million per unit annually.

– For the first $1M, some small motor carriers can gain access to a group purchasing model if they are closely aligned to a large motor carrier. 

– There are both national insurance companies and regional insurance companies focused on this market.  The national carriers are developing more sophisticated underwriting models that consider tens of underwriting characteristics as well as regional pricing competition.

– Estimates for the cost for the third additional million (3 million total)  are much cheaper than the second million, which was considerably cheaper than the first. As the risk of a payout goes down, so does the cost of additional coverage.  

If it is so hard to get information on the question of how much the premiums would actually increase if the minimum liability is raised, then on what are these statements based which are made by the people who claim it will put them out of business?

It is my understanding from FMCSA, in our meeting with them on May 5, 2014, that even they have a hard time getting that information from insurance companies and that the rule-making process would give them authority to get that kind of information from insurance companies in order to be able to make a fully-informed policy decision. I look forward to seeing what they find out.

In regard to the issue of “will it put them out of business?”. . . I hope that responsible, accountable, safety-minded companies with the best interests at heart–of both their truck drivers and the other travelers on the road–would have good records and have decisions and actions at all levels which would withstand the impact of a change which has been needed for some time. If not, then perhaps it is better for them to not be in business any longer.

Besides which, if small trucking companies are under-insured, then they might be taking the chance of losing everything if involved in a catastrophic accident.

There is another thing which I wanted to mention and that is the concern about frivolous lawsuits. Exactly upon what are people basing their claim that there are too many frivolous lawsuits related to truck crashes? If there is only a totaled car, do they really think that there will be an attempt to get the full available amount? And when there are fatalities involved, then there is a reason why laws were changed to allow wrongful death suits.

Fatality is a word that can too easily cover up the unimaginable, tragic grief which family members are left with after the death of a loved one in a truck crash. It is true that no settlement amount will ever assuage (appease, mollify, soothe) the terrible pain and gaping hole left by an unexpected loss. But I encourage you to put yourself in the shoes of a bereaved family and imagine that this is what wrongful death laws are about–above and beyond covering the immediate expenses incurred from the crash.

http://en.wikipedia.org/wiki/Wrongful_death_claim

http://en.wikipedia.org/wiki/Solatium Solatium (plural solatia) is a form of compensation for emotional rather than physical or financial harm.

http://en.wikipedia.org/wiki/Fatal_Accidents_Act_1846

  • The Fatal Accidents Act 1846 (9 & 10 Vict. c.93), commonly known as Lord Campbell’s Act, was an Act of the Parliament of the United Kingdom, that, for the first time in England and Wales, allowed relatives of people killed by the wrongdoing of others to recover damages.
  • Under the common law of England and Wales, the death of a person causes solely emotional and pure economic loss to their relatives. In general, damages cannot be recovered for either type of damage, only for physical damage to the claimant or their property. This was the rule declared by the court in Baker v. Bolton (1808).[1][2][3] Scottishlaw was different in that the court could grant a solatium in acknowledgment of the family’s grief.[4][5]
  • Thus, if a person was injured through a tort, the wrongdoer would be liable for causing injury. If the person were killed, there would be no liability. Perversely, the wrongdoer had a financial interest in killing, rather than injuring, a victim.

In fact, many times I have thought of the fact that there were more actual expenses for our daughter who required hospitalization before her death than for our daughter who died at the scene of the crash–her life abruptly ended. Without the ability to claim a wrongful death, what would we be left with besides compensation for her burial expenses? (And even saying that is likely to be misunderstood.) Surely her life was of more value than that.

11,000+ signatures from the AnnaLeah & Mary Stand Up For Truck Safety Petition have been added to the Public Comments on this rulemaking: http://www.regulations.gov/#!documentDetail;D=FMCSA-2014-0211-0111

Note: If you have already signed the AnnaLeah & Mary Petition, you can also individually sign the Federal Register. I have verified this with the administrative official at FMCSA who posted our petition to the Public Comments. Please lend your support by clicking on this link and then clicking on Submit a Formal Comment in order to post your comment:

https://www.federalregister.gov/articles/2014/11/28/2014-28076/financial-responsibility-for-motor-carriers-freight-forwarders-and-brokers

 The deadline for submitting Public Comments is FEBRUARY 26.

Some are opposing the proposed rule-making, claiming it is all about lawyers who want more money for themselves and disregarding the impact on lives and families devastated in truck crashes.

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