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Six Reasons Why Truck Insurance Limits Should be Raised

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Liability insurance for commercial motor carriers hasn’t been raised in 30 years – here’s why it needs to be changed

truck insurance limits

Currently, the minimum liability insurance commercial trucks and buses must carry is $750,000. To many people, that sounds like a lot of money. And it is. But this amount hasn’t been adjusted for inflation since 1985.

The reason this matters is that a huge number of people who are seriously hurt from a truck accident are being under-compensated.  And in many instances, people who’s lives are completely altered because of a negligent trucking company and driver aren’t even receiving all of their medical bills. These accident victims are receiving nothing for their injuries and their pain and suffering caused by an at-fault motor carrier.

Earlier this year, the Federal Motor Carrier Safety Administration (FMCSA) announced it intended to adjust the current $750,000 minimum for inflation.  The FMCSA was setting a target date of November 2014 to come up with a new proposed rule. But the U.S. House voted on June 9 to add an amendment to its version of an annual DOT funding bill to prohibit funding to develop the new regulation.

The House vote doesn’t just bar increasing the liability insurance limits; it actually puts a stop on the funding to do so. It’s ugly and spiteful politics at its very worst, and an example of politicians bowing to the wishes of a very powerful special interest group and ignoring the safety of the public (nearly 5,000 Americans are killed very year in truck accidents).

Here are 6 reasons it’s imperative truck insurance limits be raised:

  1. If truck insurance policy limits are not raised, liability costs will actually fall on taxpayers: As I said in my recent blog post on why I’m pushing for higher truck insurance limits, this is actually a taxpayer issue. When trucking companies’ insurance minimums are not sufficient to cover the costs of the crashes they cause, the companies cannot be held fully accountable. Therefore, the costs of the crashes fall on taxpayers through federal and state programs like Medicare and Medicaid.
  2. Truck crashes are catastrophic – and deadly: Nearly 4,000 Americans are killed every year in truck accidents and many more are injured. Drivers are often left with life-threatening injuries, the costs of long term care, and the loss of his or her livelihood.
  3. The current truck insurance limit is woefully inadequate: Fatal truck crashes often cost well over $4.3 million in damages, but an outdated federal law passed in the 1980s only requires truck companies to hold minimum insurance policies for $750,000 to cover the entire crash. This is regardless of how many people are killed or injured. In pure tort states like Ohio, this means injured truck accident victims often get next to nothing after their medical bills are subtracted from the truck company’s $750,000 insurance policy.
  4. FMCSA report states costs of injuries and fatalities exceeds current limits: In April of this year, the FMCSA released a report to Congress that concluded the costs of injuries and fatalities arising from truck accidents far exceed the minimum insurance levels commercial motor vehicles are required to carry. If truck insurance were updated for inflation, the amount today would be an estimated $4.4 million.
  5. U.S. House amendment to halt funding passed by only 1 vote: Despite bipartisan opposition, an amendment to the Transportation & HUD appropriations bill stripping the FMCSA of funding necessary to evaluate appropriate levels of financial responsibility for the motor carrier industry was passed by only one vote in the U.S. House of Representatives.
  6. All drivers are at risk: Any attempt in the Senate to stop FMCSA rule making in its tracks by taking away the resources necessary for the Agency to evaluate appropriate levels of financial responsibility for the motor carrier industry puts drivers at risk.

What you can do

Click here to call on your Senators to urge them to oppose any amendment to the Transportation & HUD appropriations bill that undercuts the ability of the FMCSA to increase interstate truck and bus minimum insurance requirements.