The push for even higher insurance rates for truckers is throwing a monkey wrench in the engine of the trucking industry, and some are fighting back.
Toronto-based aggregate haulers are white-hot over sky-high insurance rates, which is why they’ve taken to the streets with good old-fashioned picket signs in a full-on protest.
Their slow-moving truck convoy displayed signs that proclaimed, “honk if you hate your truck insurance,” and “commercial insurance sucks.”
This group is just one of a growing list of Canadian and U.S. fleets that have been hit with higher insurance premiums as a result of insurers re-evaluating their risks of the trucking industry.
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More than just a minor annoyance of trucking companies, there seems to be a direct correlation between the rising number of actual trucking company shutdowns and rising insurance rates. These rising rates are not just picking cherry-on-top profits out fleets, it’s putting some companies out of business entirely.
Let’s take A.L.A. Trucking, based in the heartland of America – Indiana – for example. According to an article on FrieghtWaves.com, the company shutdown in early June of this year. The owner of A.L.A. called out FMCSA’s scoring system for insurance premium spikes on their fleet.
Alan revealed that the insurance for his company of 41 drivers doubled – from $340,000 to well over $700,000 in a single year!
What’s worse, Congress is pushing for even high rates.
Washington is calling it the “Improving National Safety by Updating the Required Amount of Insurance Needed by Commercial Motor Vehicles per Event (INSURANCE) Act of 2019.”
This act was proposed by Reps. Chuy Garcia, D-Ill., and Matt Cartwright, D-Pa., on July 16, 2019.
Watch CFF’s President, Matt Manero, deliver his video response to the proposed insurance increase in this week’s Monday Transportation in Minutes, available on LinkedIn.
This INSURANCE Act would mandate that truckers start carrying close to $5 million per vehicle in liability coverage. That’s up from the current $750,000 requirement – where most truckers carry at least $1 million in coverage.
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That’s a jaw-dropping increase of more than 500% in mandatory coverage!
The Owner-Operator Independent Drivers Association (OOIDA) wasted no time in firing back, and he got personal.
First, the association sent a letter to members of Congress warning them that this INSURANCE Act would put countless small business truckers out of business.
Perhaps Congress didn’t have the time to run the numbers on how this would impact truckers?
But OOIDA went even farther.
They called out a possible conflict of interest between one of the sponsors for the bill and his family’s law firm and labeled the American Association for Justice (AAJ) an ally of the bill’s sponsors.
Todd Spencer, president of OOIDA, articulated a strong case in saying, “There’s no correlation between insurance coverage and highway safety.”
Spencer went on to argue, “This bill would do nothing more than make trial lawyers even wealthier at the expense of our nation’s small-business truckers.” He then revealed that Rep. Cartwright’s family boasts about suing trucking companies for huge sums of money, so this represents a flagrant conflict of interest and they have one thing in mind…money!
This letter also pointed out the findings of a report led by the John A. Volpe Transportation Systems Center, as was commissioned by FMCSA and mandated by MAP-21. This study basically found that 99% of truck-involved crashes are covered by today’s limits.
OOIDA welcomed Congress to help with improving highway safety in ways that actually work, instead of ways to fatten the pockets of already-wealthy law firms targeting the trucking industry.
Best Defense? A Strong Offense!
Now let’s talk about YOU and what you can do to ensure you survive this insurance crisis.
As you consider the best way to combat these increased rates, there’s one simple way you can fight back and ensure you’re driving more than just freight – but profits too!
Take advantage of our Budget Builder Tool to help you make informed decision on equipment you purchase based on its projected profitability!
It’s totally free and will help you estimate what you should be making as profit in your business. Get started with the Budget Builder Tool.
About Commercial Fleet Financing, Inc.:
At Commercial Fleet Financing (CFF), our pros have given smart advice to fleet owners and owner-operators in the transportation, moving, towing or construction industries for more than two decades. With CFF, finding the right financing solutions is a phone call away and most borrowers secure commercial vehicle financing with ease. To talk directly with one of our finance pros and get started with a credit approval in as little as two hours, CFF’s phone number is (469)-281-2962.