The FMCSA today announced the agency has submitted a report to congress that states the “current financial responsibility minimums for the commercial motor vehicle industry are inadequate to meet the costs of some crashes.”
The report was a requirement set by MAP-21. The FMCSA says the report includes findings from a recent study that weighed the benefits of increasing insurance minimums and improving compensation for crash victims.
“The analysis shows that while catastrophic motor carrier crashes are rare, the costs for resulting severe and critical injuries can exceed $1 million. Current insurance limits do not adequately cover these costs, which are primarily due to increases in medical expenses and other crash-related costs,” the FMCSA states.
Owner-Operators Independent Drivers Association (OOIDA) has responded to a recent report from the FMCSA that indicates the FMCSA’s intention of significantly raising minimum insurance requirements for motor carriers.
“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.
In its report, the FMCSA acknowledges that more than 99 percent truck accidents are fully covered under current minimum requirements. In addition, the FMCSA admitted that they have not done an assessment of the financial impact raising the minimum insurance requirement would have on small businesses.
“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.”
In July 2013, U.S. Rep. Matt Cartwright introduced the Safe and Fair Environment on Highways Achieved through Underwriting Levels Act (H.R. 2730) or “A SAFE HAUL.” The bill proposed to raise the required insurance minimum for motor carriers.
The current $750,000 minimum coverage requirement was established in 1980, more than 30 years ago, a press release from Representative Cartwright stated.
In today’s terms, with the increased cost of medical care, $750,000 is equivalent to $4.4 million, a press release from Cartwright’s office stated.
“This is a matter of public safety. Tragically, more than 100,000 people have been killed in commercial vehicle collisions since 1980,” said Rep. Cartwright. “This legislation is essential to protecting our nation’s highways and ensuring that victims receive the proper amount of compensation for their losses.”
Representative Cartwright says that the current $750,000 minimum fails to meet the basic functions intended by congress of promoting safer operations by holding insurers responsible for trucking operations inspections prior to underwriting policies.
Cargwright pointed to a recent study conducted by the Trucking Alliance that found that 42% of cash settlements paid by carriers between 2005 and 2011 for crashes exceeded the current minimum insurance requirement.
Additionally, according to a recent study conducted by the Trucking Alliance, 42 percent of the dollar settlements paid by trucking companies between 2005 and 2011 for motor vehicle accidents exceeded the minimum insurance requirement.
“Outdated trucking insurance limits shift the burden of crash costs to injured motorists, taxpayers, medical insurance carriers, and Medicare. This legislation is long overdue,” American Association for Justice President Mary Alice McLarty in a previous interview.
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. OOIDA was established in 1973 and is headquartered in the Greater Kansas City, Mo., area.