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Raising Federal Trucking Insurance Minimums to Improve Road Safety

     Trucks, although a popular and useful mode of transportation, pose a significant risk to other drivers and passengers on the road in the event of a crash.

     The Federal Motor Carrier Safety Administration (FMCSA) reports the rate of truck crashes and fatalities has doubled in the last 10 years, with over 150,000 people injured in truck crashes, and over 5,000 killed, in 2018 alone. The risk is primarily directed towards those not in the truck as well; a passenger in a vehicle colliding with a truck is four times more likely to die than the truck driver.

     Despite these facts, federal insurance minimums for trucks have not been raised since the Reagan administration, over 40 years ago, leaving coverage and compensation very inadequate.

     At present, a fatal truck crash costs an average of $4.9 million in direct costs. The current minimum insurance coverage, at $750,000, currently does not provide nearly enough coverage to cover even medical and funeral bills and other costs. This $750,000 insurance coverage minimum has not been adjusted, even for inflation, in 41 years. Additionally, if medical cost inflation is considered, $5.9 million is needed to equal the minimum liability requirements put in place more than 40 years ago, yet this figure has remained the same for four decades.

     Additionally, in 2018, despite the incredible $792 billion in revenue the trucking industry generates, insurance still comprises a surprisingly small portion of operating costs; it also becomes progressively cheaper every year. Insurances costs for trucks are cited by the industry as a major reason why minimum insurance limits should not be raised; however, total insurance costs comprise only 4% of a typical trucking company’s annual operating costs.

When policies do not provide sufficient coverage, the cost must be borne by society as a whole. That transfer is displaced. Currently, the $750,000 policy minimum applies to the incident as a whole, not for each party harmed. Consequently, when trucks kill or injure other drivers or their passengers, very frequently the $750,000 policy minimum is far too inadequate to pay for all parties’ medical bills, which then forces the burden on entities such as Medicare, and ultimately on all of us, the taxpayers.

     Raising these minimum levels of insurance could not only encourage safe driving in future, but would remove the incentive for smaller trucking companies to cover only the bare minimum requirements.

     Ultimately, the danger posed by large trucks is increasing, while the compensation for those harmed by their operations is rapidly disappearing.  Sadly, this means trucking companies and their drivers are incentivized to ignore safety measures and drive in vehicles of questionable repair, and often with their drivers fatigued. Regulators often are overwhelmed because there are so many dangers for inspectors to consider. Outdated insurance rules have undermined economic and social incentives to create and enforce safety measures as well.

<i>Photo credit Pexels</i>

Photo credit Pexels

     Without a more robust and functional insurance system, negligent trucking companies are too often able to continue operating, and those harmed are left without any means of recourse. Ultimately, market-based change is needed to prevent innocent deaths, and that starts by raising federal minimum levels of insurance to care for those affected.

     Have you or a member of your family been injured by a commercial truck? If so, at Herd Law Firm, we have the experience and resources to investigate and pursue these claims. If you or a loved one are a driver or passenger that was injured (or killed) from collision with a commercial vehicle, you may have a substantial claim. We can help you investigate and recover the compensation you deserve. Contact our firm for a free evaluation today.

     The above is a summary of one or more news stories reviewed by the author of this article. It may contain comments or views of the author only.

     This article is intended for general interest and does not constitute legal advice.

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