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How Will Stronger Trucking Company Insurance Protect the Public?

Published on Mar 25, 2022 at 8:22 pm in Trucking Accident.

How Will Stronger Trucking Company Insurance Protect the Public
Consider the following facts: The minimum insurance requirements for interstate trucking companies have not been raised in over 40 years. At the same time, the cost of injuries and fatalities resulting from accidents caused by commercial trucks continues to rise exponentially. According to National Highway Traffic Safety Administration (NHTSA), there has been a 72% increase in truck crash injuries during the past decade. That same NHTSA data shows fatalities increased from 3,380 in 2009 to 5,005 in 2019.

Today, laws governing the trucking industry’s minimum insurance requirements have failed to take into account over four decades of inflation and rising costs of medical care. When this is coupled with both escalating accident rates and a downward trend in civil lawsuit verdicts—verdicts over $1 million have declined since 2011—it becomes apparent that truck accident victims aren’t getting what they need and deserve.

There are a number of good reasons to believe that stronger trucking company insurance can protect the public. More considered and comprehensive insurance policies can help secure adequate compensation for victim injuries and fatalities. It can also incentivize truck companies and drivers to invest greater effort in road safety. While the commercial motor vehicle industry is clearly in need of reform on many fronts, raising minimum insurance requirements for interstate trucking companies could be one impactful step toward safer outcomes for truck drivers themselves and society at large.

What Are the Minimum Insurance Requirements for Trucking Companies?

The current levels of minimum financial responsibility for trucking companies were established by the Motor Carrier Act signed by President Jimmy Carter in 1980, with minimum required liability levels implemented in 1982 for freight carriers and in 1984 for passenger carriers. These levels have not been changed since this law was passed. The law mandates the following liability minimums:

  • Interstate General Freight Carriers: $750,000 per accident
  • Carriers of Oil and Certain Types of Hazardous Waste: $1,000,000 per accident
  • Carriers of Other Hazardous Substances: $5,000,000 per accident

It’s worth emphasizing that these insurance minimums are per accident—not taking into consideration the number of vehicles involved, the number of people injured or killed, the extent of injuries and medical care, or the financial impact on the life of a family who loses a loved one in a truck accident.

The vast majority of commercial trucks we see on the roads are subject to the minimum requirement of $750,000 per accident. If even only one person is injured in a collision with a large truck, the medical expenses that one person incurs can easily surpass this limit, without accounting for lost wages, loss of the ability to work, ongoing therapy and rehabilitation, and other expenses associated with the cost of recovery. When two or more people are injured, as is often the case in a large commercial truck accident, this minimum insurance requirement can’t even begin to cover the total cost.

When large commercial motor carriers are involved, a collision is never minor. Many injuries sustained in truck accidents are catastrophic if not fatal, meaning that a person’s life is completely altered by the injury. Paralysis, traumatic brain injury, loss of mobility, permanent disfigurement, and other physical and cognitive impairments are seen frequently among victims of trucking accidents. The insurance coverage minimums placed upon motor carriers don’t do enough to acknowledge the gravity of truck accident injuries.

Although the somewhat higher levels of minimum financial responsibility required for carriers of hazardous materials ($1 million or $5 million) may at first glance appear more realistic, closer examination shows them to be greatly insufficient. An accident involving a hazmat truck can quickly escalate into slickened road surfaces, vehicle fires, multicar pileups, and toxic exposure suffered by victims across a wide radius. The financial repercussions of such an event can rarely be covered by such low insurance minimums.

What Are the Benefits of Stronger Trucking Company Insurance?

A 2013 report published by the Federal Motor Carrier Safety Administration (FMCSA) titled “Financial Responsibility Requirements for Commercial Motor Vehicles” questioned whether the minimum levels of financial responsibility for commercial motor carriers established in the 1980s should be raised to meet the needs of the 2010s. The report unequivocally determined that the cost of truck accidents far exceeds the minimum insurance requirements. But now, into the 2020s, we have yet to see any changes made.

It is not only federal regulatory agencies, public safety advocacy groups, civil litigators, and accident victims who have recognized the need for restructuring trucking insurance requirements. A large number of trucking companies themselves have taken the initiative to carry coverage above the minimum levels. Many companies have also been proactive in supporting legislation that aims to raise insurance limits. Acknowledging that adequate insurance promotes safety and protects drivers and other motorists is an important step in industry reform. Some of the benefits of stronger trucking company insurance include:

Protect Accident Victims

As its most basic benefit, higher insurance limits can help guarantee that accident victims are appropriately compensated for their losses. Hospital visits, doctor and specialist appointments, surgery, physical therapy, rehabilitative services, prescription medications, follow-up visits, medical and orthopedic equipment, and in some cases in-home care and accommodations for disability are often needed following an accident.

Protect Truck Drivers

Increasing insurance minimums could motivate trucking companies to take the steps necessary to eliminate risky drivers and substandard vehicles from their workforce. Truck drivers would experience the benefit of an all-over safer working environment with fewer defective vehicles, more stringent safety protocols, fewer “bad apple” drivers, and less trucking negligence allowed to pollute an otherwise duty-conscious work atmosphere.

Promote Safer Practices

There are three predominant factors that decide trucking insurance premium pricing. They are the number of accidents a company has previously experienced (known as “loss history”), the company’s driving record, and the company’s motor carrier safety records stored in federal databases. This means that when a company hires safe drivers, protects its employees, implements and adheres to high safety standards, and minimizes the number of accidents members of its fleet are involved in, it can enjoy the benefit of lower insurance premiums.

Protect Companies’ Bottom Lines

The fact is that higher insurance minimums do not affect trucking companies’ profits. American Transportation Research Institute (ATRI) research found that truck insurance premiums actually declined in 2019, from $0.084 in 2018 (average cost per mile) to $0.068 in 2019. While other costs have increased, trucking companies are paying roughly equal and sometimes less for insurance than they were a decade ago. Furthermore, the ability to lower insurance premiums through diligent safety measures is in the hands of the company.

Why Are Truck Accident Fatality Rates Increasing?

We don’t know exactly why truck accident injury and fatality rates have shown such a dramatic increase over the past decade. Researchers acknowledge that there is undoubtedly a complex web of influences that combine to result in the statistics we’ve observed. Dynamic fluctuations in our nation’s economy, trade, business, legislation, and political and social climates have no small impact on the trucking industry. The changes brought on by COVID-19 have further triggered previously-unseen trends in the commercial motor carrier sector as a whole.

The following factors have been identified by experts as likely contributors to the increase in truck accident rates:

  • Disproportionately low insurance requirements
  • Frequent hours-of-service (HOS) violations (staying on the road longer than the law allows)
  • Trucking companies lobbying for HOS extensions and heavier weight allowances
  • A prevalence of substance abuse disorders in the trucking industry
  • An increase in distracted driving and driver recklessness
  • Economic pressures and tighter schedules leading to more instances of speeding, HOS violations, driving in inclement weather, breaking traffic laws, driver distraction, failing to conduct proper inspections and maintenance, improper loading, and substance abuse

The truck accident lawyers at Thomas Law Offices believe that the best way for the trucking industry to reverse the trend of increasing injuries and fatalities is to put public safety first, in all matters. If you have been harmed in a collision with a commercial truck, we want to hear your story. We work tirelessly for our clients to make sure your case is never trivialized in a system that protects corporations at the expense of individuals.

Contact Thomas Law Offices to speak with an experienced attorney who can fight for just compensation after a truck accident. We will begin with a free case evaluation to see how we may be able to help you seek financial recovery.

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At Thomas Law Offices, our personal injury attorneys recognize that our potential clients are likely going through some of the most difficult times of their lives. We don't want you to have to worry about paying out of pocket for legal advice when you're just starting to learn your legal rights and options. That's why we provide free case evaluations. We'll offer our expert advice about your potential case and walk you through how we can help you.

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Meet Our Founder

Tad Thomas - Trial Lawyer

Tad Thomas

Managing Partner

Tad Thomas has dedicated his practice to representing plaintiffs in various types of civil litigation, including personal injury, business litigation, class actions, and multi-district litigation.

After graduating with his law degree in 2000 from Salmon P. Chase College of Law at Northern Kentucky University, Mr. Thomas immediately opened his own private practice and began representing injury victims.

In 2011, Thomas Law Offices was established in Louisville, Kentucky. Over the past decade, Mr. Thomas has expanded his firm and now has offices in three additional locations: Cincinnati, Ohio, Columbia, Missouri, and Chicago, Illinois. He is also a frequent lecturer on topics like trial skills and ethics and technology.

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