One of the most overlooked issues by the public in freight transportation today is the minimum liability insurance requirements for trucks. The public is either unaware or misled about the ramifications of the current push to raise the minimum liability insurance requirements for trucks that purchase insurance. Roughly half of the trucks on the road today do not purchase insurance. These trucks are owned by large companies that are self insured. Please refer back to my recent post (click here) regarding the repeal of the self insurance provision. With this in mind, I plan to expose the intention and result of higher insurance minimums.
Congress member, Rep. Cartwright of Pennsylvania, whose family operates a law firm that has made its fortune by prosecuting trucking companies involved in accidents, introduced a bill to increase the minimum liability insurance requirements for trucking companies. That bill would increase the minimum liability amount required from $750,000 to upward of $4.4 million per truck. Why a congressman with so much to gain from a ruling like this is even able to introduce such a bill is beyond my belief! Law firms regularly receive amounts in excess of 30% to settle a case against a trucking company. You do the math on what that means to law firms. As if we were not litigious enough already.
The interesting part of this equation is that less than 1% of all accident cases against trucks currently exceed settlement for an amount greater than the minimum required amount of $750,000. Of the cases that exceed that amount, less than 1/10th of those cases would be covered by the higher limits of $4.4 million. You are talking about legislation that would benefit 1/10th of 1% (1 per thousand) of all accidents involving trucks. The lawyers, on the other hand, would reap windfall profits in settlements that would leave the victims as pawns of a scheme to exploit their misfortune for the gains of law firms.
Now that I have these numbers swirling around in your head, let me introduce you to more numbers! Most of the independent trucking companies today already carry $1 million in liability coverage. That means that most of the accidents that happen today are covered by insurance levels that are already pretty much the industry standard. The connection or dilemma that the public seems not to understand is that half of the trucks on the road will not be affected by this rule! They are self insured! This means that if you are the victim of an accident involving one of these carriers (who have the least experienced drivers), you have to negotiate with the offending party to get a settlement anyway! You will have to hire a lawyer to settle the case that has nothing to do with insurance minimums in the first place. An example of this is the much publicized Tracy Morgan accident. Wal Mart is self insured. Likewise, so is Fed Ex. Every major accident in the national news this year has been from a self insured company.
The ramifications of raising the standard minimum on the rest of the industry would be devastating. The average insurance premium today is $6-8,000 per year per truck. With the new limits, the premium amounts would surge to an estimated $20,000 per year per truck! That is an extra thousand dollars per month per truck that would have to be passed on to consumers. That would be enough to drive many of our nations safest drivers out of business. Small business truckers would have the choice of going out of business or going to work for large, self insured companies. That is the reason for the support of this increase by the self insured companies in the industry. It’s not about safety or your just reward! To learn more about this subject, click here for OOIDA’s FightingForTruckers.com website. You can also contact your representatives with just a few clicks from that site.
Ultimately, this measure would make the public less safe and force yet higher prices on you in the marketplace and put many small business truckers out of business all for the benefit of a few law firms that chase trucks like ambulances. The safest drivers on the road would be under even more pressure to go out of business. The measure is simply designed to extract greater profits for a few individuals and corporations by playing on the fears and ignorance of the public. Don’t let yourself get caught up in the hyperbole of the need for this increase. It will only cost you, the public, with no real benefit to your safety. It will only benefit the lawyers and the most unsafe carriers on the road. Help spread the word to all your voting friends and neighbors. Let’s stop this wreck before it happens! Contact your representatives regularly and take control of our special interest driven government! We have the power and must act before it is too late.
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