On July 18, 2013, U.S. Representative Matt Carwright (D-Pa) introduced the Safe and Fair Environment on Highways Achieved through Underwriting Levels Act of 2013. This bill was aimed at the minimum amount of liability that trucking companies are required to have in order to operate in the United States. This was set by Congress more than 30 years ago.
When Congress deregulated the trucking industry in 1980, concern arose as to how the Federal Government would be able to assert and maintain effective safety oversight of a large and growing number of trucking companies in the industry. A minimum insurance requirement was established to protect the motoring public from negligent drivers and companies by providing appropriate compensation to crash victims and also to assist oversight with the intent that through effective underwriting the insurance market would provide incentives for safe operating companies.
The Motor Carrier Act of 1980 authorized the Secretary of Transportation to set minimum levels of insurance and to increase such amounts to appropriate levels that would achieve the intended purpose. The minimum level of insurance for motor carriers transporting property was set at $750,000 and $5 million for motor carriers transporting hazardous materials. These levels had not been increased since they were set 30 years ago. However, inflation and escalating medical costs since 1980 have created a much different situation for a trucking company if one of its vehicles is involved in a major accident.
While the minimum level of $750,000 may not have been sufficient to cover a catastrophic event in 1980, it is nowhere near sufficient to cover a catastrophic event in today’s world. A recent study has shown that in present dollars adjusted for increase in cost of medical and inflation it would take about $4.5 million to provide the equivalent coverage of $750,000 that was set in 1980. Because the Federal Government has failed to keep these regulations up-to-date, minimum insurance requirements are not fulfilling the Congressional intent of protecting truck crash victims and promoting safe operations through the underwriting process.
Some would argue the minimum financial levels have in fact had the opposite effect of their intended purpose. While the minimum limits were set to protect the public and improve safety within the trucking industry, they have allowed irresponsible companies to operate by creating an environment of wrongdoing and unfair competition. In order for the minimum insurance requirements to perform as they were originally intended by Congress, the Secretary of Transportation should increase the levels to amounts that provide appropriate compensation to catastrophic crash victims and effectively function as a mechanism that protects safe operation through the underwriting process.
Rep. Cartwright’s bill was assigned to the House Transportation and Infrastructure and Highway and Transit Committee. Currently, there is no time table as to when this bill may even be reported out of committee. Hopefully, Congress will take the necessary action to increase the minimum limits of insurance for the trucking industry. Victims of truck crashes should be adequately compensated if the truck drivers and his or her company are at fault. If you need more information on this subject, contact Mike Crow, a lawyer in our Personal Injury/Product Liability Section, at 800-898-2034 or by email at Mike.Crow@beasleyallen.com.
Sources: FMCSA.gov, Overdrive.com, and Thetruckersreport.com
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