This Editorial appears in the July 29 print edition of Transport Topics. Click here to subscribe today. The move by Rep. Matt Cartwright to force all motor carriers to increase their minimum injury and property damage insurance coverage by almost 500% is a misguided solution in search of a problem.
As detailed in our front-page story this week, the proposal by the Pennsylvania Democrat to require fleets to carry some $4.4 million in coverage, instead of the existing minimum of $750,000, is an unnecessary move that is sure to harm smaller fleets and owner-operators.
Most larger carriers already carry substantially more than the minimum insurance the federal government currently requires, both to protect their own assets and to meet the demands of some of their larger customers.
Cartwright, it seems fair to point out, was a personal injury attorney before he got elected to Congress for the first time last year.
“This legislation is essential to protecting our nation’s highways and ensuring that victims receive the proper amount of compensation for their losses,” Cartwright said when he introduced the legislation.
Very few people involved in trucking seem to agree with him.
“All the data suggests that the current minimums are adequate,” said Prasad Sharma, general counsel of American Trucking Associations.
Most truck-involved collisions — 91.7% according to Sharma — are settled for less than $25,000. He added that only 0.19% of truck crashes cost the fleet involved more than $1 million.
So, it seems like an amazing overreach by the freshman legislator Cartwright to force fleets to buy more coverage than they are very likely to ever need.
The primary association that represents owner-operators said the higher insurance requirement “would have a devastating impact” on independent operators.
And an insurance broker told us, “For smaller fleets, it’s going to add a significant cost to their bottom line.” That same broker said that virtually every fleet today carries at least $1 million in coverage.
Another broker told us that many small fleets probably couldn’t get an insurance company to write them a policy of $4.4 million, even if they tried.
Cartwright said that the system is out of whack because the federal insurance requirement hasn’t been raised since 1980. But he says nothing to explain why he thinks a nearly 500% increase is in order.
Let’s hope that others in Congress realize what a mistake it would be to force such a gigantic increase in motor carrier insurance minimums and that this bill dies a quiet death in the basement of poorly conceived legislation.
