Legislation Would Up Minimum Truck Insurance Almost 500%

On Friday, Rep. Matt Cartwright (D-Penn) introduced a bill that would raise the required insurance minimum for motor carriers, dubbed the Safe and Fair Environment on Highways Achieved through Underwriting Levels Act (H.R. 2730) otherwise known as “SAFE HAUL."

by Staff

July 22, 2013

Legislation Would Up Minimum Truck Insurance Almost 500%

2 min to read

UPDATED--On Friday, Rep. Matt Cartwright (D-Penn) introduced a bill that would raise the required insurance minimum for motor carriers, dubbed the Safe and Fair Environment on Highways Achieved through Underwriting Levels Act (H.R. 2730) otherwise known as “SAFE HAUL."

The bill would increase the required insurance minimum for motor carriers from $750,000 to $4.422 million. The bill would also tie the future insurance minimum requirement to the cost of medical care inflation

Congress established the current insurance minimum in 1980 at $750,000. This minimum requirement has not been raised since.

According to a statement from Rep. Cartwright’s office, in present dollars and 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.

“This is a matter of public safety,” he said. “Tragically, more than 100,000 people have been killed in commercial vehicle collisions since 1980. This legislation is essential to protecting our nation’s highways and ensuring that victims receive the proper amount of compensation for their losses.”

Cartwright contends the current minimum of $750,000 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 and to protect the public.

The congressman’s office sites a recent study conducted by the Trucking Alliance that it says shows 42% of the dollar settlements paid by trucking companies between 2005 and 2011 for motor vehicle accidents exceeded the minimum insurance requirement.

Other trucking groups take a dim view of the Alliance’s work, however. “It’s pretty much just garbage,” said Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association.

He cited the small number of carriers in the survey and the caveat of the Bickerstaff firm that the analysis is informal and not a statement of actuarial opinion.

The Federal Motor Carrier Safety Administration is working on its own analysis of the insurance standard, as required by the highway law Congress passed last year.

The legislation has seven cosponsors and has been referred to the House Committee on Transportation and Infrastructure where it is awaiting action.

Update corrects percentage amount.

Topics:Insurance U.S. House of Representatives Legislation Fleet Management