In 1980, Congress set a minimum insurance requirement of $750,000 per crash event for motor carriers operating in interstate commerce. This amount was intended to cover the costs to all parties adversely impacted by the collision. The minimum has not been adjusted for inflation or to account for rising truck crash costs. This has led to financial hardship for truck crash survivors and families who have lost loved ones in truck crashes as well as millions of dollars of uncovered commercial motor vehicle crash costs being passed onto taxpayers.
40 Years of Inaction is Devastating Families and Driving Down Safety in the Trucking Industry.
Updating the minimum insurance requirements for interstate motor carriers per crash event from $750,000 to $5,000,000 and indexing it to medical cost inflation will help:
Ensure that motor carriers maintain adequate insurance to cover truck crash costs (i.e., damage to persons, property, and the environment),
Prevent unsafe motor carriers and chameleon carriers from driving on our roads, and discourage safe carriers from cutting cost to meet the price of their competitors,
Incentivize insurance companies to conduct ‘on-site’ inspection of motor carriers to supplement inadequate government oversight of the industry,
The minimum be raised every five years to prevent another 40 years of inaction.
Facts on Minimum Insurance
According to the U.S. Bureau of Labor Statistics, the amount of $750,000, set in 1980 (the year of enactment), would have the same purchasing power as $5,193,665.62 in 2020, if the amount were raised to account for medical-cost inflation. The cumulative increase of medical cost inflation from 1980 to 2020 is 592.5 percent.
Raising a policy from $1,000,000 to $2,000,000 results in an approximate 20 percent increase in premiums according to industry and insurance experts.
Raising a policy from $2,000,000 to $3,000,000 results in an approximate 6 percent increase.
Most trucks are insured for more than $750,000 per crash event.
American Trucking Associations (ATA) stated “over 93 percent of policies for trucks over 26,000-lbs are written at $1,000,000 or more.
According to joint comments by OOIDA and the OOIDA Risk Retention Group (ORRG), 98.6 percent of motor carriers insured by ORRG have $1,000,000 trucking liability coverage and the remaining 1.4 percent of motor carriers (primarily short haul), have $750,000 liability coverage.
Transportation Intermediaries Association confirmed that 80 percent of their carrier based maintain at least $1 million in public liability insurance.