Bill could increase trucking insurance costs

The transportation industry is always concerned about providing better service while still trimming expenses. This is why many carriers rely on route optimization software to ensure drivers will arrive to scheduled pickups and deliveries on time and still use as little fuel as possible.

Thus, recently proposed legislation is making waves within the transportation industry. U.S. Rep. Matt Cartwright (D-Pa.) introduced a bill that would increase the required insurance minimum for carriers. The jump mandated by the Safe and Fair Environment on Highways Achieved Through Underwriting Levels Act (SAFE-HAUL) would be more than a small increase - if the legislation managed to pass both houses of Congress and receive the president's signature, the minimum would increase from $750,000 to more than $4.4 million. The bill would tie future minimums to medical cost inflation, meaning the amount could continue to rise in coming years.

Said to be a safety issue
Congress set the current minimum in 1980, and some believe it's time for that number to change. According to Cartwright, the increase would promote safer operations and prevent more accidents on the nation's roads.

"This is a matter of public safety," Cartwright said. "Tragically, more than 100,000 people have been killed in commercial vehicle collisions since 1980. This legislation is essential to protecting our nation's highways and ensuring that victims receive the proper amount of compensation for their losses."

There is controversy over whether the higher limits are even necessary. According to Overdrive Magazine, Cartwright's bill claims a study by the Trucking Alliance revealed 42 percent of accidents paid by carriers between 2005 and 2011 exceeded the current $750,000 minimum. However, the source points out the Owner-Operator and Independent Drivers Association (OOIDA), as well as the American Trucking Associations (ATA), claim a mere 1 to 2 percent of collisions result in claims higher than this amount.

Though the legislation hasn't gained much support yet, the proposition is one carriers need to remain aware of. Failing to stay abreast of the situation could lead transportation companies to be caught off guard and forced to secure additional coverage. But even if insurance costs do rise, carriers can lessen the impact by relying on route planning software that can help lower fuel spend, thus freeing up more capital for insurance expenses.