Railroading truckers into higher insurance costs?

A bill to increase the required insurance for truckers is now before Congress. But the bill’s premise is being questioned, and the congressman behind it is taking the opposite position in a similar situation.

On April 15, U.S. Rep. Jesus G. “Chuy” Garcia, D-Ill., announced HR2687. The bill’s text was unavailable by press time. But a previous version – the INVEST Act – proposed a $4.9 million trucking requirement, an increase of more than 550%. Last year’s proposed highway bill contained a 167% increase.

However, in March, Garcia signed on to a letter to Transportation Secretary Pete Buttigieg complaining about a much smaller liability increase for commuter railroads.

Collin Long, OOIDA’s director of government affairs, said the letter “talks about concerns that commuter rails in the U.S. are facing a mandated increase in their liability insurance that was enacted in the last highway bill, the FAST Act.”

“Now they’re having a hard time accessing this insurance or that they’re fearful of their costs increasing,” he added. “One sentence that really strikes me … says while commuter railroads carry liability insurance to cover unlikely catastrophic incidents, the law unintentionally forces operators to navigate a shrinking coverage option and associated skyrocketing premiums.”

If this sounds familiar, that’s because it is.

“The first time I read this letter,” Long said, “it read like something we would have sent Capitol Hill from OOIDA expressing our concern about what may happen if elected officials decide to increase motor carriers’ minimum liability insurance requirements.”

Trucking responds

On April 22, OOIDA and 60 other organizations covering construction, agriculture, trucking and more responded.

The coalition sent a letter to the five members of Congress who signed the rail letter – including Garcia.

“As you point out in your letter, a lack of competition in the marketplace forces participants to make difficult, expensive, and sometimes impossible decisions,” the letter stated. “This would be especially true for motor carriers subjected to increased federal requirements.”

As of deadline, Garcia’s office had not responded to Land Line Now’s request for comment.

Supporters of a trucking increase have contended it would improve highway safety and is needed to properly compensate crash victims.

Joe Deems is the executive director of the National Risk Retention Association, which represents small insurance carriers that each specialize in a single industry.

OOIDA has its own risk retention group, and is a member of Deems’ organization.

“An increase in limits, in my opinion, will not have any positive effect on safety whatsoever, and has nothing whatsoever to do with safety,” Deems said. “Safety is not a product of bigger limits, which only help the trial lawyers, frankly, and … probably large national trucking companies, which can afford to pay those big limits.”

So what is or is not responsible for fatal car-truck crashes?

Bill Bannister of the FMCSA’s Analysis Division, recently presented the latest figures from the Fatality Analysis Reporting System, or FARS.

FARS indicates that in fatal crashes involving a large truck, more than 90% of truck drivers received no citation. In 67% of those crashes no factors related to the truck driver were cited.

“We should note that a little more than two-thirds of the truck fatal crashes have no driver-related factors cited to the truck driver,” Bannister said. “That’s compared to only 40% of passenger vehicle drivers having no factors cited to them.”

Research by Dan Blower, a retired researcher with the University of Michigan Transportation Research Institute, shows something similar. His study looked at data from 1994 and 1995, but he says other researchers have reached similar results more recently.

Blower is careful not to use words like “blame” or “fault” or even “cause.” But his research did exhibit a trend.

“When you look at the contribution of driver action, passenger car or truck, in those crash types, it’s more frequently on balance … something the passenger car driver or vehicle did in precipitating the crash,” he said.

His research indicated car drivers’ actions contributed to 70% of crashes examined, while errors by truck drivers contributed to 16%. Both made errors 10% of the time.

Blower also found:

• The most common crash involved passenger vehicles crossing the center line into a truck’s path. That’s eight times the rate that trucks crossed over.
• Car drivers were six times more likely than truckers to sideswipe an oncoming truck.
• Cars were four times more likely to hit a truck from behind than trucks rear-ending cars.
• And cars were twice as likely to sideswipe a truck traveling the same direction.

“Driving is really a team sport,” Blower said. “If you want to reduce truck crashes, you need to look beyond just the truck driver or even just the truck.”

When the truck is at fault

But sometimes the truck is ruled at fault. What are the contributing factors in those cases?

The top trucker-related factor in FARS was speeding of any kind, accounting for just over 7% of crashes.

But Doug Morris of OOIDA, a former commercial enforcement officer with Maryland, says the FARS figure doesn’t always mean a truck exceeded the speed limit. Many fall into the category of “failing to reduce speed to avoid a collision.”

“They could be going 10 miles under the speed limit. It has nothing to do with speed,” he said. “It’s a default violation or default causation.”

The statement by Morris is backed up by others – and by data.

Stephen Johnson, formerly of the University of Arkansas, studied crashes in which speed was listed as a factor. In a 2007 interview, he agreed with the contention that violations such as “driving too fast for conditions” is often used as a “default causation,” much as pilot error is in airliner crashes.

Part of his study looked at the 104 truck-involved, speed-related crashes on rural interstates in one year.

“Out of those 104, the number of trucks that were actually recorded as going above the speed limit,” Johnson said, “was zero.”

Where liability limits do have an effect

While Blower and other researchers don’t use terms such as “cause,” police and insurance companies do. If the passenger vehicle were at fault in a fatal accident, the car driver’s insurance would be required to pay. And that is where liability limits can have an effect – the liability limit of the car.

“If you’ve got a nice, brand-spanking-new truck that you just paid $160,000 for, and someone that hits you has a $10,000 max limit on their (policy) … the tiniest amount of damage is going to exceed that on the truck,” Trina McIntyre with OOIDA’s Truck Insurance Department said.

Each state can have a different liability requirement for cars, but all are far below the commercial truck requirements.

“Some states are a little higher, maybe $25,000,” McIntyre said. “Some states are as low as $5,000. And so it just doesn’t even scratch the surface sometimes.”

However, that only pertains to whether car liability limits are too low to cover damage to a truck. Garcia’s bill concerns whether truck limits are too low, and more specifically, are they high enough to cover the medical costs of passenger vehicle occupants.

Deems says they are far more than sufficient.

“The vast, vast, vast majority of injuries from vehicular accidents are well below the current minimum limits that are out there,” he said. “They’re well below $100,000.”

Federal figures tell a similar story.

The U.S. Department of Transportation’s John A. Volpe National Transportation Systems Center says the average truck insurance claim is about $18,000 – far below the current $750,000 requirement. That $750,000 covers 99.4% of crashes covered by truck insurance – leaving only 0.6% current limits failed to cover.

Who bears the cost? (hint: it’s you)

Higher trucking insurance requirements do, however, have an effect – increasing costs for truckers.

No one knows by how much. However, the letter signed by Garcia said the 10% railroad insurance increase could result “in premium increases of 60% to 300%.”

Garcia’s previous bill called for increasing trucking liability requirements more than 500%. If a 10% increase produced a 60% to 300% premium increase, trucking could see massive increases.

What’s more, OOIDA’s McIntyre says many truckers already struggling with insurance costs could be put out of business.

The letter signed by Garcia said insurance increases and other factors could “make it increasingly difficult for some railroads to operate, threatening service to thousands of daily commuters.”

“It’s foreshadowing what would happen in the motor carrier industry if they were subject to the same type of increases,” Long said. And the increases Garcia calls for are much more than that.

So if current limits cover most claims, and if safety is likely unaffected, why does Garcia continue to push for a trucking increase?

Long says in part, it’s because of the support trial lawyers have in Congress – including, he says, Garcia.

However, he points to Garcia’s district in the Chicago metro, which has significant commuter rail service.

“He probably thinks an issue like commuter rail insurance rates affects his constituents much more deeply than anything that he could impose on truckers,” Long said. “Unfortunately, I think there itself is another disconnect because his constituents are relying on all kinds of things to be delivered by trucks.

“It might seem like you’re comparing apples and oranges when you’re talking about regional railways and the motor carrier industry, but really, we’re looking at the same concerns if Congress moves forward with these type of increases.” LL