“Safe Haul Act”: A New, Higher Truck Insurance Coverage Minimum
Posted on behalf of Rizk Law on Dec 09, 2013 in Auto Accident
A new law known as the “Safe Haul Act,” that would increase federally required insurance minimum for commercial motor carriers nearly six-fold, from the current $750,000 to $4,442,000 (adjusted annually for inflation relating to medical care), is passing through Congress.
Introduced in the House by Rep. Matt Cartwright (D-PA) as the “Safe and Fair Environment on Highways Achieved through Underwriting Levels Act” (H.R. 2730) in July, the bill has been referred to the House Subcommittee on Highways and Transit.
Outdated Insurance Minimum at 1980 Level
The current motor-carrier insurance minimum has not been raised since it was set by Congress in 1980. In present dollars, adjusted for the increase in the cost of medical care, it takes more than $4.4 million to provide for the equivalent of the $750,000 in the original law, according to a statement released by the Rep. Cartwright’s office.
The Congressman contends that the current minimum “fails to perform the basic functions that Congress intended: to promote safe operations by holding insurers responsible for inspecting trucking operations prior to underwriting policies.”
There is clear resistance to the Safe Haul Act by trucking’s chief lobby, the American Trucking Association (ATA), and by the Owner-Operator Independent Drivers Association (OOIDA), which contends that roughly fewer than 1% of truck-related accidents settle for more than $750,000 and most owner-operators have $1 million in coverage.
Trucking Alliance Backs Safe Haul Act with Survey Results
Furthering his case for the Safe Haul Act, Cartwright cited a recent study conducted by the Trucking Alliance (Alliance for Driver Safety & Security), a safety-focused coalition of motor carriers, that found “42% of the dollar settlements paid by trucking companies to motorists injured in accidents may exceed the federal government’s minimum insurance requirement for trucking companies.”
The Trucking Alliance ran a survey with results drawn from 8,692 accident settlements between 2005 and 2011, voluntarily tracked by Trucking Alliance members. They found that 42% uninsured exposure is significant because a large percentage of the motor carrier population maintains insurance at or near the $750,000 minimum. This uninsured exposure means that trucking companies must pay out the additional dollars from within the business or, in the worst case, file bankruptcy to avoid paying.
Statistics Reveal Exposure for Trucking Industry and Injured Motorists
The statistics from the survey, based on per occurrence average, show that the current minimum insurance level creates too much exposure for the trucking industry and injured motorists.
The Trucking Alliance’s data shows that if all the trucking companies in the study had maintained the minimum $750,000 insurance requirement, exactly 42% of their monetary exposure from these settlements would have exceeded their insurance coverage, without means of offsetting medical costs.