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Insurance Update
Can they do that?

By Donna Ryun

I saw a bumper sticker the other day that said: "If you don't know where you're going, how will you know when you get there?" The same concept applies to your rights as a professional trucker. If you don't know your rights, how will you know when they are being violated?

Since it is part of our mission at OOIDA to work for a business climate where truckers are treated equally and fairly, it follows we should also help to make you aware of your rights. We try to accomplish this by providing information to our members by whatever means possible.

We get an abundance of calls from truckers who feel as if their rights have been violated, but are not quite sure where the line is drawn. "Can they do that?" is a question that we frequently hear at OOIDA headquarters, and in this column, I'll share with you the information that I have obtained.

Due to space restrictions, I'll pinpoint an area of concern I have found that many professional truckers have expressed. The relationship between owner-operators and the companies to which they are leased often comes into conversations that include the question: "Can they do that?" For the answers to these types of questions, I'll refer to the Code of Federal Regulations, which is a compilation of the general and permanent rules published in the Federal Register by the executive departments and agencies of the federal government.

It might be a good idea for you to pull out a copy of your lease agreement and follow along, because now is the perfect time to see if your rights as a leased owner-operator are being violated.

Just for clarification and to make sure that we start out on the right foot, check your lease to confirm that you, as the owner-operator, are named as the "lessor," and your motor carrier is listed as the "lessee." The "lessor" is the party granting the use of equipment, while the "lessee" is the party acquiring the use of the equipment. Believe it or not, I received a copy of a lease agreement a while back, in which the names had been reversed ... and both parties had signed without noticing the error. Mistakes can happen, so always double check.

It takes the participation of both parties to make a contract, and you have the right to look over and know what's in the agreement. The lease should be signed by both you and the motor carrier. As "lessor," you have a right to a copy of the lease agreement. The motor carrier will keep the original, and provide a copy of the lease to be kept in the truck as well.

Here are some frequently asked questions from OOIDA members. The responses should help to clarify your rights as leased owner-operators.

Q: I had to pay an overweight ticket for a trailer that was pre-loaded and sealed. I had no control over the loading of the trailer. Can they do that?

A: No. Unless the violation was the result of an act or omission of the lessor (you), the overweight fine is the responsibility of the lessee (motor carrier). If you paid the ticket, they are required to reimburse you.

Q: My motor carrier frequently makes me wait several weeks for compensation. This puts me in a bind. Can they do that?

A:As long as you have submitted the necessary delivery documents and/or other paperwork involving a trip for your carrier, they must make payment to you within 15 days. If you have failed to turn in logbooks required by the DOT or other documents that the carrier needs in order to receive payment from the shipper, your compensation can be delayed, but those are the only exceptions as far as paperwork is concerned. This is not to be confused with situations in which you are terminating your lease agreement, however. If your lease agreement specifies that upon termination of your contract with the motor carrier, you must return all identification devices belonging to them prior to receiving your final payment, you'll have to comply if you want your money.

Q: My motor carrier says that I have to get my bobtail insurance from them. I'd rather get the coverage elsewhere. Can they do that?

A:No, they can't. As the lessor, you are not required to purchase any products or services (such as bobtail insurance) from your carrier as a condition of your lease. You must fulfill their insurance requirements, but if you can do so through the company of your choice, the motor carrier can't force you to buy their insurance. It's not a good practice to purchase insurance from your motor carrier in any event. If you terminate your contract, your insurance coverage will come to an abrupt end as well, and you could find yourself totally unprotected!

Q: I just got my first paycheck from my motor carrier, and found out they withheld money from my settlement that wasn't specified in the lease agreement I signed. Can they do that?

A: The lease agreement must clearly specify any charge-back items to be deducted from your compensation. If it wasn't included in the contract that you signed, then no, they can't do that.

Q:I purchased physical damage and bobtail insurance from my motor carrier, but I have nothing to show for it. I asked for a copy of my policies, but they refused to provide me with one. Can they do that?

A: No, they can't. If you purchase any insurance from or through your motor carrier, they are required to provide you with a copy of each policy upon your request. As a matter of fact, you should always insist upon being provided with a copy of your policy. You have the right to know what coverage you are getting for your premiums. You won't have to go through this hassle if you purchase your coverage through an independent provider instead of your lease company.

Q: My motor carrier told me that I have to get my own public liability insurance because they aren't responsible. Can they do that?

A: No. It is the legal obligation of the authorized motor carrier to maintain insurance coverage for the protection of the public. When you leased your equipment to the carrier, you gave them exclusive possession, control, and use of it for the duration of the lease. With that exclusive possession comes the responsibility for the operation of the equipment, and that responsibility includes insurance coverage for the protection of the public. Public liability insurance is not to be confused with non-statutory coverages such as bobtail, unladen, or physical damage, however. These coverages are your responsibility and can be obtained through the provider of your choice.

I realize when you need to make a living for yourself and your family, it's easy to be intimidated by company bigwigs. The trouble is once you give up one of your rights without a protest, you can bet you'll be asked to give up more. That's why so many lease contracts have been whittled down where everything is in the motor carrier's favor and no longer a contract between two's a dictatorship!

It's your responsibility to be willing to speak up when you feel that your rights are being violated. Knowledge is power, so do everything possible to educate yourself on the "Can they do that?" situations. If you are confident that you know your rights, it becomes easier for you to protect those rights, and harder for your motor carrier (or anyone else) to intimidate you. LL

OOIDA staff members enjoy hearing from you, so call 800-715-9369 with your questions, or e-mail me