65.9 F
New York
Saturday, September 30, 2023
spot_img

Latest Posts

Trucking Insurance Bill Returns to Congress

It appears as though every single bill relating to trucking that died in the halls of Congress in 2020 is making a comeback for the new year. The latest one is the Improving National Safety by Updating the Required Amount of Insurance Needed by Commercial Motor Vehicles per Event (INSURANCE) Act of 2019. Despite its name, it was debated both years of the 116th Congress. Now, with Democrat control in both halls, it may just become law.

Details

The bill is very short compared to the average bill introduced into Congress. Even so, it can be summarized into two points:

  1. The minimum insurance coverage requirements for commercial motor vehicles is raised to match the change in medical costs since 1980.
  2. The minimum insurance coverage requirements are updated every five years after.

Current insurance requirements, established in 1980, are set to $750,000. Indexed to inflation, the requirements would increase to approximately $1,800,000. When indexed to the rising costs of medical services (which outpaces inflation), the Bureau of Labor Statistics (BLS) finds the insurance coverage to be close to $5,000,000.

This is a massive increase from what would have been the requirements in the Moving Forward Act, which pegged the coverage requirements at $2,000,000.

Opposition

The Owner-Operator Independent Drivers Association’s (OOIDA) executive vice president Lewie Pugh, writes similar sentiments to the INSURANCE Act as he did for the Moving Forward Act. Those points being:

  1. Current insurance requirements cover 99.4% of all cases, while raising coverage would still not provide 100% case coverage.
  2. There is no proven correlation between higher insurance coverages and a reduction in insurance claims.
  3. Raising coverage requirements would cause annual premiums per truckers to more than double, in an industry with already tight margins.

Simply put, Pugh argues that the legislation will do only harm, not good.

Conclusion

There is a huge chasm between an overwhelming majority of claims being under $750,000, and ones totaling over $10 million (coded as “nuclear verdicts”). Thanks to increases in safety technology over the decades, the coverage requirements set in 1980 are still relevant to most cases today. If Congress and other groups hope to mitigate the problem of nuclear verdicts, surely there must be a better solution than raising insurance requirements for everyone.

Latest Posts

spot_img

Don't Miss

Stay in touch

To be updated with all the latest news, offers and special announcements.