Hot on the heels of the release of a report to Congress on the minimum required insurance for motor carriers, the Federal Motor Carrier Safety Administration has announced the formation of a rulemaking task force team to re-evaluate the current minimums.
The report, which was heavily criticized by the leadership of the Owner-Operator Independent Drivers Association, was based on a study by the Volpe Foundation.
The report confirms that the number of crashes costing more than the current $750,000 minimum liability insurance for interstate operations is very small, a stance that OOIDA has taken since the first mention of increasing insurance minimums was raised.
OOIDA Director of Government Affairs Ryan Bowley points out that a footnote to the study used as the basis for the report says that approximately 74 crashes per year occur that are above the minimum level. However, the study conducted by Volpe did not consider fault in the crashes studied.
Bowley points out that between 75 and 85 percent of crashes – depending on what research you use – are the fault of the passenger car driver. That would drive the number of truck driver responsible crashes to less than 20.
Yet the agency has announced the pursuit of a rulemaking team to re-evaluate the minimum level of insurance required, and a rulemaking could be initiated by the end of 2014.
“Even though the agency’s report confirms that fewer than one percent of all truck-involved accidents result in injuries or property damage that exceed current insurance requirements, it seems pretty clear they plan to raise those requirements anyway,” said Todd Spencer, OOIDA executive vice president.
One lawmaker has already introduced a bill seeking to increase the required minimum insurance to $4.2 million, five times the current amount. That lawmaker is freshman Rep. Matthew Cartwright, D-Penn. Cartwright is a licensed attorney in the state of Pennsylvania. Before being elected to Congress and taking office in January he was part owner in a law firm with his in-laws.
Pressure to increase the minimums is also coming from The Trucking Alliance, a group of six large motor carriers such as Knight Transportation and J.B. Hunt.
OOIDA’s Spencer points out that financial motivation is the primary objective of both Cartwright and The Trucking Alliance.
“The agency seems to be bowing to the economic objectives of the personal injury attorneys and mega-trucking companies who have been campaigning for higher insurance requirements,” Spencer said. “Trial lawyers will see windfall payouts in the increases, and big trucking companies – who already use special exceptions in the law to avoid buying insurance on the open market – see an opportunity to drive up business costs and do away with their small-business competitors.”
Spencer points to the core mission of FMCSA – highway safety. “The amount of insurance carried by motor carriers has never been shown to have a correlation with safety.”
Spencer says that minimum insurance requirements do not have a direct correlation with reducing crashes. It’s not a problem that needs more government intervention.
“Even the insurance industry has stated that the market does a very good job of addressing risk – outside of any government-mandated minimum,” Spencer said.
The financial burden that small-business truckers would face if any sort of significant increase is implemented would have the potential to cripple upwards of 90 percent of the trucking industry.
OOIDA has launched a Call to Action urging all members to get in touch with their lawmakers and fight against any increase to the current minimum requirements. Bowley said truckers can visit http://bit.ly/stoptriallawyers and fill out a letter to their lawmakers directly from the site. He said that with a highway bill in the making, it’s imperative for lawmakers to hear from truckers right now.
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