We are glad to see that the FMCSA has recently released a report from their study of the need to increase minimum liability insurance for truck drivers. We hope that the rulemaking process will proceed in a timely fashion.
Here are some details from the FMCSA’s April 2014 Report:
“On July 6, 2012, President Obama signed into law the Moving Ahead for Progress in the 21stCentury Act (MAP-21;P.L. 112-141). Section32104of MAP-21directed the Secretary of the U.S. Department of Transportation (DOT) to issue a report to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Transportation and Infrastructure of the House of Representatives on the appropriateness of the current minimum financial responsibility requirements for motor carriers of property and passengers, and the current bond and insurance requirements for freight forwarders and brokers.
Section 32104 also directed the Secretary to issue a report on the appropriateness of these requirements every 4 years starting April 1, 2013. The Secretary delegated the responsibility for this report to the Federal Motor Carrier Safety Administration (FMCSA).
The legislative history of minimum insurance requirements for commercial motor vehicles (CMV) indicates that Congress recognized that crash costs would change over time and that DOT would periodically examine the levels and make adjustments as necessary. A variety of recent studies indicate that inflation has greatly increased medical claims costs and related expenses.
In conclusion, FMCSA has determined that the current financial responsibility minimums are due for re-evaluation. The Agency has formed a rulemaking team to further evaluate the appropriate level of financial responsibility for the motor carrier industry and has placed this rulemaking among the Agency’s high priority rules. The FMCSA will continue to meet with the stakeholders, including impacted industries, safety advocacy groups, and private citizens, as it moves forward with developing a proposed rule.”
Here is some information on how OOIDA, the Owner Operators Independent Driver Association, has publicly responded to the DOT/FMCSA’s report on minimum insurance.
http://www.ooida.com/MediaCenter/PressReleases/pressrelease.asp?prid=344
“(April 17, 2014) – The Owner-Operator Independent Drivers Association responded to a report by the Federal Motor Carrier Safety Administration indicating the agency’s intention to significantly raise insurance requirements for interstate motor carriers.
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.
‘The amount of insurance carried by motor carriers has never been shown to have a correlation with safety,’ continued Spencer. ‘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. 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.’
Under current insurance requirements, truckers already often find themselves pushed into court by attorneys after accidents that were not their fault due to the possibility of high dollar settlements.
The Owner-Operator Independent Drivers Association is the largest national trade association representing the interests of small-business trucking professionals and professional truck drivers. The Association currently has more than 150,000 members nationwide.”
http://www.overdriveonline.com/house-bill-would-increase-trucking-insurance-minimum-by-millions/
“The Owner-Operator and Independent Drivers Association and the American Trucking Associations both disagree with the findings of the study, however, and both say that just 1 or 2 percent of crashes involving trucks actually see a claim above $750,000.
OOIDA’s Todd Spencer in June called the study ‘bogus,’ adding that ‘All the Alliance will succeed in doing is increase costs for their competition in trucking and chum the water for personal injury lawyers.’
ATA spokesman Sean McNally echoes Spencer, saying that just 1 percent of settlements exceed the minimum. The Alliance, he says, recommends the limit increase ‘in satisfaction of some unstated goal.’
The Federal Motor Carrier Safety Administration ‘consistently found over the same time period examined by the Trucking Alliance that the average cost of a crash involving a large truck is less than a third of the minimum limit required today,’ McNally added.”
One of our family members has responded to these statements in this way:
“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 because less than 1 percent of the time on the road involves accidents they shouldn’t be compelled to have insurance at all.”
