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Why I’m in support of raising truck insurance limits

June 28, 2014 by Steven M. Gursten

Safety groups recommend FMSCA raise truck insurance limits to $4.4 million – Congress strikes it down

raising truck insurance

It’s been 30 years. Thirty years since the amount of bodily injury and liability insurance minimums for truck and bus companies has been adjusted.  To understand how under-compensated victims of serious truck accidents are, if that $750,000 was adjusted for inflation, the amount would be approximately $4.4 million dollars today. And while the costs of medical treatment and care and rehabilitation has skyrocketed well past inflation rates, the minimum insurance limits for trucks and buses has still remained $750,000.

But the Federal Motor Carrier Safety Administration is considering raising the liability insurance limits, and last month held hearings on the issue.

During the recent Motor Carrier Safety Advisory Committee (MCSAC) hearings on increasing insurance limits, numerous consumer groups and truck safety organizations, including the American Association for Justice (AAJ) Truck Accident Litigation Group (of which I am past-president), pushed for higher limits to protect accident victims.

After the hearings, the Committee deliberated on pegging insurance minimums to core versus medical consumer price index (to account for inflation). The good news is that the majority of the committee voted to peg to medical consumer price index, which could increase the policy limits to $4.4 million for non-hazmat 18-wheelers with similar increases for HazMat careers and passenger carriers.

Update: Congress strikes down higher truck insurance limits

And then politics raised its ugly head and the truck lobby began contacting lawmakers. The U.S. House of Representatives recently passed an amendment to the pending Transportation bill  and rule making process, which effectively slammed the brakes on FMCSA’s plans.

The amendment actually seeks to circumvent the FMCSA’s Congressionally-created rulemaking procedure by blocking any efforts by the FMCSA to increase trucking companies minimum liability insurance requirements beyond the levels set in the 1980s.

This politically-motivated, anti-safety and anti-consumer maneuver is outrageous. Next week I will discuss the reason why  in greater detail.

But first, I’d like help lay the groundwork for why higher insurance limits are so desperately needed for accident victims injured in serious truck accidents.

And while I can already hear critics say that it’s self-serving for an injury lawyer to push for higher insurance limits, the reality is  it’s just the opposite. This is about protecting taxpayers so they don’t have to pay for negligent truck companies and drivers who want to shift the costs of their actions onto the public. It is about protecting accident victims and innocent drivers.

As past president of the American Association for Justice Truck Accident Litigation Group and as a truck lawyer of  20 years, I’m very familiar with the safety crisis and unintended results from this woefully inadequate policy limit.

The most obvious is that when a truck company has the minimum insurance policy of $750,000, it’s not enough to compensate people after they’ve been seriously injured, or the families of people who have been killed.

When all is said and done, the $750,000 is actually far less. It’s even worse in states outside Michigan, such as Ohio which is a pure tort state, because that $750,000 is  supposed to cover the hundreds of thousands or even millions that horribly injured accident victims must sue for the cost of medical bills, lost wages, and other economic losses over lifetimes.

So it fails to compensate for the hard economic losses, and it leaves nothing for compensation for injuries and pain and suffering caused by their negligent acts. As an attorney, I see that the most seriously injured have an eventual pay-out of nothing or next to nothing for all of the human losses and everything that has been taken away from them, and then they face personal bankruptcy and are forced onto Medicaid to pay for their lifetime of medical bills.

No, $750,000 is not even close to adequate to balance harms caused by negligent truck and bus companies.

And aside from the victims, low liability insurance policy limits allows the worst and most unsafe companies to that take further short-cuts on safety and maintenance. They also can effectively undercut on bids from the safer motor carrier companies that play by the rules and follow the law.

Yes, increasing insurance limits  increases safety. Insurance limits of $4.4 million causes insurance companies to take a much closer look at the companies they insure.  This alone would deter trucking companies from egregiously cutting safety corners in exchange for a bigger bottom line. It would also prevent hundreds of truck accidents that are caused every year by companies taking safety shortcuts.

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