In a July 27 letter to leaders of the Senate Commerce, Science and Transportation Committee, NGFA and 62 other national and state agriculture and trucking groups urged lawmakers not to include any legislative increase in the existing minimum liability coverage for motor carriers.
The Senate committee is working to develop the next surface transportation reauthorization bill before the current law expires on Sept. 30. Legislation proposed in the House would increase minimum financial responsibility requirements per truck from $750,000 to $2 million. (Annual insurance premiums per truck are approximately $4,000 at the current minimum financial responsibility level of $750,000. It is unknown how much premiums would increase to cover a $2 million financial responsibility level, but the increase most likely would be passed on to customers through higher trucking freight rates.)
“An increase in insurance requirements is wholly unnecessary, would do nothing to improve highway safety, and would have a severe negative impact on truckers, farmers and manufacturers by significantly increasing their operational costs,” the letter notes. “Raising insurance rates for countless businesses engaged in trucking in the midst of an economic downturn would undoubtedly lead to the loss of even more American jobs.”
The coalition also cited a John A. Volpe National Transportation Systems Center study, commissioned by the Federal Motor Carrier Safety Administration, which determined that today’s minimum insurance level adequately covers damages in all but 0.06 percent of crashes.
“There is no reputable research indicating an increase of any amount (in insurance coverage) would help reduce crash rates. Proposals to raise minimum liability coverage are nothing more than an opportunity for their most ardent supporters – trial lawyers – to receive higher payouts from settlements at the expense of American businesses,” notes the July 27 coalition letter.
Related Reading: The American Transportation Research Institute (ATRI) in June released a report, “Understanding the Impact of Nuclear Verdicts on the Trucking Industry,” that found large legal verdicts on the American trucking industry have negative affects throughout the supply chain. Read more about it in this July 17 NGFA Newsletter article.