New Law Will Force Trucking Industry to Buy Bigger Semi-Truck Accident Insurance Policies
Last week, a lawmaker out of Illinois (Representative Jesús “Chuy” García) joined with two fellow Congressmen to introduce the “Improving National Safety by Updating the Required Amount of Insurance Needed by Commercial Motor Vehicles per Event (INSURANCE) Act of 2019.” To read the legislation (H.R. 3781) and track its progress, go here.
Once passed, this new law will make sure that truck crash victims are protected with sufficient insurance coverage in the motor carrier’s accident insurance policy.
Trucking Company Minimum Insurance Has Not Changed Since 1980
There is a federal law in place that requires the trucking industry to purchase accident insurance. It contains language that attempts to provide adequate protection for truck crash victims. The existing law mandates minimum insurance requirements for commercial trucks are to be adjusted to the inflation rate of medical costs. The Bureau of Labor Statistics (BLS) is given the task of figuring out the changing rates here.
Shockingly, the 1980 insurance policy minimums for motor carriers have NEVER changed. There have been no adjustments for inflation. Truck crash victims today are forced to deal with commercial truck insurance policies that legally have limits unchanged in almost 40 years.
Changing Truck Policy Coverage from $750,000 to $4.9 Million
Today, as a general rule, the minimum insurance coverage that a semi-truck or big rig rumbling through Indiana or Illinois must have to protect victims in a truck crash is $750,000 (though it can be higher for some kinds of freight or cargo).
This new law would change that policy minimum exponentially. The lawmakers have used the BLS figures to calculate that the 1980 minimum of $750,000 equates to $4,923,153.29 in 2019 dollars (adjusting for medical cost inflation).
Accordingly, the new statute will increase the minimum commercial truck accident policy coverage to $4,923,153.29. It will also mandate that the Department of Transportation must re-visit this minimum and re-calculate it in accordance with medical care inflation every five (5) years.
From Illinois Representative Garcia:
“Thousands of families are suffering in silence, saddled with crippling medical care costs resulting from catastrophic crashes. The inadequacy of the current minimum insurance requirement, left unchanged for 40 years, only further prolongs the suffering and financial strain on families that have already lost so much. The INSURANCE Act ensures that families are adequately compensated to cope with their losses and prevents taxpayers from footing the bill for negligent trucking businesses and drivers.”
New 2019 INSURANCE Act Makes Trucking Industry Insurance Coverage Fit Realities of Today’s Truck Crashes
Today, there are more and more commercial trucks carrying cargo in this country. The trucks are bigger, heavier, and moving faster than ever before. For more on the dangers of today’s commercial truck crash, see:
- Rising Danger of Fatal Truck Crashes Clashing With Weakened Federal Regulation
- Fatal Truck Driver Crashes: Record-Breaking Trucker Fatalities According to New Studies
- Truck Crashes: Making the Roads of Indiana and Illinois Safer from Fatal Truck Accidents.
Serious and fatal truck crashes are often horrific, with multiple deaths and horrendous, life-altering bodily injuries suffered by crash survivors. Even before tallies include property losses (truck, cargo, and other motor vehicles) many of these accidents result in damages and costs that quickly exceed the 1980 legal coverage minimum of $750,000.00.
The reason that these big rigs, semi-trucks, 18-wheelers, and tractor-trailer trucks are legally required to have accident insurance is to protect crash victims in the event of that truck causing a fatal collision. Sadly, not having the coverage minimum change for decades has meant that many accident victims seeking justice after a fatal truck crash find that the trucking company’s policy is far from sufficient to cover their long-term costs and needs.
The Truck Safety Coalition, in support of the new law, released the following:
“… [t]he limits should also reflect the real devastation and damages that are caused when an 80,000 pound truck slams into traffic stopped or slowed in a construction zone. In order to have these effects, property-carrying motor carriers should be required to carry at least $4,900,000, the amount that $750,000 would total in 2019 if it had been raised to account for medical cost inflation.”
In support of its position, the TSC points to two other research studies:
- The Pacific Institute for Research and Evaluation (PIRE) Report
Here, researchers confirmed that the “upper range” for liability awards involving death or catastrophic injury is $9,000,000.00 –$10,000,000.00 million. The PIRE wants the new insurance policy limits to be at least $10 Million, much higher than what the 2019 INSURANCE Act proposes.
- The Trucking Alliance Review of Crash Settlements
Here, the Trucking Alliance studied claims settlements in 8,692 truck crashes that happened between 2005 and 2011. This study found that 42% of truck crash personal injury claims would have had medical costs greater than the $750,000 statutory minimum currently in place. Undoubtedly, this percentage is higher, given the rise in medical costs between 2011 and 2019.
Justice for Victims of Fatal Truck Crashes in Indiana or Illinois
It is vital that truck crash victims and their families understand how low insurance minimums can impact their claims for justice after the truck accident. There must be an aggressive effort to make sure that those who are responsible for the fatal truck crash take legal responsibility for what has happened.
Sadly, the current low insurance minimums ($750,000) may result in the policy limits being paid, but the accident victim having to fight tactics by the trucking company to protect its assets after a judgment has been entered. The insurance money ($750,000) payout means the insurance carrier bows out of the controversy. The crash victim must now face going after the trucking company itself to cover the remaining medical costs, etc.
To protect its bottom line from the righteous claims of that truck crash victim, the trucking company may go out of business, and the victim may be shocked to discover that in reality, all that has happened is that the company has resurrected itself under a new name. (The TLC calls this the “reincarnating or chameleon carrier” strategy, citing a July 2009 General Accounting Office Report.)
Here in Illinois and Indiana, we live in the “crossroads of America,” where there is a much higher amount of commercial truck traffic than in other parts of the country. See: “Semi Trucks and Big Rigs: High Indiana and Illinois Commercial Truck Traffic Creates Dangerous Conditions.”
This new legislation is of particular importance to truck crash victims in Illinois and Indiana. Fatal truck crashes are a very real danger to anyone driving our roadways. Let’s be careful out there!
