From the Insurance Journal
A new analysis of government data reveals that more than 28,000 motor carrier companies that operate 200,000 trucks have violated federal safety regulations.
The trial bar association, the American Association for Justice (AAJ), said it found commuters are sharing roads with trucks that have incurred thousands of safety violations, such as defective brakes, bald tires, loads that dangerously exceed weight limits and drivers with little or no training or drug and alcohol dependencies.
The group also said that current minimum insurance requirements for truckers are inadequate.
AAJ said it obtained data on the safety performance of U.S. trucking companies from the Federal Motor Carrier Safety Administration (FMCSA).
States found to have a rate of companies in violation of safety requirements above the national average include West Virginia, North Dakota, Nebraska, Vermont, Iowa, Montana, Delaware, Idaho, Arkansas, Connecticut, Kentucky, Minnesota, North Carolina, Oregon, Indiana, Mississippi, Wisconsin, and South Dakota.
According to the FMCSA, more than 4,000 people die every year in collisions with trucks and 80,000 more are seriously injured. Also, though trucks make up less than four percent of all passenger vehicles on U.S. roads, they are involved in 12 percent of all motor vehicles fatalities.
AAJ also maintains that the minimum insurance requirements for commercial trucks are "completely inadequate to compensate those who have been seriously injured in a collision involving multiple vehicles or multiple injured individuals." In 1980, Congress set the minimum level of insurance to $750,000; when adjusted for inflation, $750,000 is just $292,000 in 1980 dollars, according to the analysis.
While large trucking companies may carry more than the required level of coverage, smaller companies often carry just the bare minimum, according to the AAJ. AAJ's analysis of the U.S. trucking industry found that 87 percent of the companies in violation of safety standards are small companies that have fleets of 10 trucks or less.
The AAJ said that many deadly accidents involving unsafe trucks are never recorded as safety violations. A 2005 Government Accountability Office (GAO) study found that nearly one-third of commercial motor vehicle crashes that states are required to report to the federal government were never recorded. Additionally, state crash reports were not always accurate.
The analysis by AAJ follows a July 2009 GAO study which found that more than 1,000 commercial trucking firms that were ordered out of service because of federal safety violations evaded compliance by operating under a different name, but often using the same owner, address and employees.
Monday, August 31, 2009
Texting and Trucking
The Virginia Tech Transportation Institute released its study on the impact of text messaging while driving. To know ones surprise texting while driving is dangerous. Truckers who text are 23 times more likely to be involved in a crash
Wednesday, August 26, 2009
Transportation Insurance Market Soft, But Leveling Off
According to NIP Group Inc.'s Transportation Insurance Pricing Survey (TIPS) for the second quarter of 2009, more participants have reported modest rate increases across many segments, account sizes and lines of coverage during the second quarter of 2009. New entrants are also gaining market share as established transportation underwriters are holding the line on rates and are less likely to lower rates appreciably below expiring levels, the survey revealed.
The majority of respondents believe rates in the transportation insurance market are beginning to level out as observed by the slight firming of auto liability and motor truck cargo rates. Rate increases have also begun to emerge in some market segments especially ambulance/paratransit, airport ground transporters and specialized carriers.
The survey measures premium changes across 10 different transportation segments, including: trucking operations, intermodal carriers, messenger/courier services, ambulance/paratransit, school bus contractors, bulk transportation, airport ground transportation, charter/tour bus operators, specialized carriers and riggers, and limousine services.
"TIPS results show signs of a transportation insurance market where rates are beginning to level out," said Richard Augustyn, CEO of NIP Group. "The market appears to be in a transitional phase being led by established transportation underwriters trying to selectively drive up rates on key lines of business. It will be interesting to see in future TIPS results if this is an ongoing trend."
The majority of respondents believe rates in the transportation insurance market are beginning to level out as observed by the slight firming of auto liability and motor truck cargo rates. Rate increases have also begun to emerge in some market segments especially ambulance/paratransit, airport ground transporters and specialized carriers.
The survey measures premium changes across 10 different transportation segments, including: trucking operations, intermodal carriers, messenger/courier services, ambulance/paratransit, school bus contractors, bulk transportation, airport ground transportation, charter/tour bus operators, specialized carriers and riggers, and limousine services.
"TIPS results show signs of a transportation insurance market where rates are beginning to level out," said Richard Augustyn, CEO of NIP Group. "The market appears to be in a transitional phase being led by established transportation underwriters trying to selectively drive up rates on key lines of business. It will be interesting to see in future TIPS results if this is an ongoing trend."
Tuesday, August 25, 2009
Monday, August 24, 2009
The Rules for Principal Place of Business
A trucker has an office in Nashville and terminals in Jackson and Seattle. What is the principal place of business? Here is what the FMCSA says:
The regulatory guidance in this notice responds to recurring questions FMCSA has received
concerning the definition of “principal place of business” in 49 CFR 390.5.
AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.
ACTION: Notice of regulatory guidance.
SUMMARY: The FMCSA announces regulatory guidance concerning its definition of “principal place of business.”
The regulatory guidance is presented in a question-and-answer format and is generally applicable to motor
carrier operations subject to the Federal Motor Carrier Safety Regulations. No prior interpretations or regulatory
guidance concerning the term “principal place of business,” whether published or unpublished, may
be relied upon as authoritative if they are inconsistent with the guidance published today. This
guidance will provide the motor carrier industry and Federal, State and local law enforcement
officials with uniform information for use in determining which locations may be designated by a
motor carrier as its principal place of business.
DATES: Effective Date: This regulatory guidance is effective on August 12, 2009.
G U I D A N C E :
Question: What location may a motor carrier
designate as its “principal place of business”?
Guidance: In instances where a motor carrier has
more than one terminal or office, the regulations do
not explicitly place a restriction on which location a
motor carrier may designate as its principal place of
business. The definition states that such a location is
“normally” the carrier's headquarters; the rule does not
require motor carriers to use the company's corporate
headquarters as its principal place of
business. However, motor carriers are limited
to using an actual place of business of the
motor carrier. Moreover, a motor carrier may
designate as its principal place of business
only locations that contain offices of the
motor carrier's senior-most management executives,
management officials or employees responsible for the
administration, management and oversight of safety
operations and compliance with the FMCSRs and
Hazardous Materials Regulations. In determining its
principal place of business, a motor carrier must
consider the following factors: (a) The relative
importance of the activities performed at each
location, and, if this factor is not determinative, then
(b) time spent at each location by motor carrier
management or corporate officers.
Question: May a motor carrier with a single business
location, including a private residence, designate a
different location as its “principal place of business”?
Guidance: No. The definition of “principal place of
business” in 49 CFR 390.5 allows a carrier with multiple terminals or offices to designate a single terminal or office as
its primary business location for identification purposes. Consistent with this definition, a motor carrier with a single
place of business may designate only its actual place of business as the “principal place of business.”
For the complete Notice, go to http://edocket.access.gpo.gov/2009/E9-18142.htm
The regulatory guidance in this notice responds to recurring questions FMCSA has received
concerning the definition of “principal place of business” in 49 CFR 390.5.
AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.
ACTION: Notice of regulatory guidance.
SUMMARY: The FMCSA announces regulatory guidance concerning its definition of “principal place of business.”
The regulatory guidance is presented in a question-and-answer format and is generally applicable to motor
carrier operations subject to the Federal Motor Carrier Safety Regulations. No prior interpretations or regulatory
guidance concerning the term “principal place of business,” whether published or unpublished, may
be relied upon as authoritative if they are inconsistent with the guidance published today. This
guidance will provide the motor carrier industry and Federal, State and local law enforcement
officials with uniform information for use in determining which locations may be designated by a
motor carrier as its principal place of business.
DATES: Effective Date: This regulatory guidance is effective on August 12, 2009.
G U I D A N C E :
Question: What location may a motor carrier
designate as its “principal place of business”?
Guidance: In instances where a motor carrier has
more than one terminal or office, the regulations do
not explicitly place a restriction on which location a
motor carrier may designate as its principal place of
business. The definition states that such a location is
“normally” the carrier's headquarters; the rule does not
require motor carriers to use the company's corporate
headquarters as its principal place of
business. However, motor carriers are limited
to using an actual place of business of the
motor carrier. Moreover, a motor carrier may
designate as its principal place of business
only locations that contain offices of the
motor carrier's senior-most management executives,
management officials or employees responsible for the
administration, management and oversight of safety
operations and compliance with the FMCSRs and
Hazardous Materials Regulations. In determining its
principal place of business, a motor carrier must
consider the following factors: (a) The relative
importance of the activities performed at each
location, and, if this factor is not determinative, then
(b) time spent at each location by motor carrier
management or corporate officers.
Question: May a motor carrier with a single business
location, including a private residence, designate a
different location as its “principal place of business”?
Guidance: No. The definition of “principal place of
business” in 49 CFR 390.5 allows a carrier with multiple terminals or offices to designate a single terminal or office as
its primary business location for identification purposes. Consistent with this definition, a motor carrier with a single
place of business may designate only its actual place of business as the “principal place of business.”
For the complete Notice, go to http://edocket.access.gpo.gov/2009/E9-18142.htm
How Truckers should keep their garage or shop
from Professional Safety
Most truckers of any size have a garage or shop to repair and maintain their equipment. Part of their requirements with the Department of Transportation is that they must maintain within published guidelines their equipment- so many try to do so at their terminal or office.
There is a general liability exposure and in certain cases a garage liability exposure when the insured has a garage or shop.
Most agents are unaware of what to advise an insured as to how to create a Best Practices approach to safety at the garage or shop. Most housekeeping safety hazards fall into one of two categories: unsafe acts and unsafe conditions.Statistics show that for every mishap caused by unsafe conditions, roughly four are caused by unsafe acts. So, it makes sense to be constantly aware of hazardous housekeeping conditions -- and actions -- both on and off the job.
So what should a trucker do? Try the following:
Keep your surrounding work area safe.
Keep your tools and working materials off the floor.
Use designated storage locations for materials and tools.
Keep briefcases, handbags & other obstacles out of the aisles.
Shut the file and desk drawers when they’re not in use.
Clean and properly maintain all safety gear.
Wipe up all spills immediately.
Stack materials properly.
Remove or repair all unsafe conditions if you are authorized to
do so.
Keep your work area secure.
Lock up before you leave.
Return all keys to authorized personnel.
Make a daily inspection of your work area and department.
Be alert to housekeeping hazards and accumulation of
combustibles that could cause a fire.
Make sure hazardous materials are properly labeled and stored
so that labels can be seen. Guard against exposure of
flammable and combustible materials to any heat source.
Put oil-, paint-, and grease-soaked rags, shavings & other highly
combustible waste in the proper waste receptacles.
Clean up safely. Never use alcohol, gasoline, or other
flammable liquid as a cleaning agent, and make sure that all
flammable liquids are stored away from direct heat and are in
proper containers.
Never block fire doors, fire extinguishers, warning signs, or
emergency exits.
Always report these housekeeping hazards:
Wet walkways
Loose or torn carpeting
Chipped tiles
Holes, trenches, open manholes
Loose tread on stairs
Objects left in aisles
Cables, hoses, or cords stretched across walkways
Poorly lit walkways or stairwells
Unsafe tools and equipment
Blocked emergency exit(s)
Most truckers of any size have a garage or shop to repair and maintain their equipment. Part of their requirements with the Department of Transportation is that they must maintain within published guidelines their equipment- so many try to do so at their terminal or office.
There is a general liability exposure and in certain cases a garage liability exposure when the insured has a garage or shop.
Most agents are unaware of what to advise an insured as to how to create a Best Practices approach to safety at the garage or shop. Most housekeeping safety hazards fall into one of two categories: unsafe acts and unsafe conditions.Statistics show that for every mishap caused by unsafe conditions, roughly four are caused by unsafe acts. So, it makes sense to be constantly aware of hazardous housekeeping conditions -- and actions -- both on and off the job.
So what should a trucker do? Try the following:
Keep your surrounding work area safe.
Keep your tools and working materials off the floor.
Use designated storage locations for materials and tools.
Keep briefcases, handbags & other obstacles out of the aisles.
Shut the file and desk drawers when they’re not in use.
Clean and properly maintain all safety gear.
Wipe up all spills immediately.
Stack materials properly.
Remove or repair all unsafe conditions if you are authorized to
do so.
Keep your work area secure.
Lock up before you leave.
Return all keys to authorized personnel.
Make a daily inspection of your work area and department.
Be alert to housekeeping hazards and accumulation of
combustibles that could cause a fire.
Make sure hazardous materials are properly labeled and stored
so that labels can be seen. Guard against exposure of
flammable and combustible materials to any heat source.
Put oil-, paint-, and grease-soaked rags, shavings & other highly
combustible waste in the proper waste receptacles.
Clean up safely. Never use alcohol, gasoline, or other
flammable liquid as a cleaning agent, and make sure that all
flammable liquids are stored away from direct heat and are in
proper containers.
Never block fire doors, fire extinguishers, warning signs, or
emergency exits.
Always report these housekeeping hazards:
Wet walkways
Loose or torn carpeting
Chipped tiles
Holes, trenches, open manholes
Loose tread on stairs
Objects left in aisles
Cables, hoses, or cords stretched across walkways
Poorly lit walkways or stairwells
Unsafe tools and equipment
Blocked emergency exit(s)
Sunday, August 2, 2009
The ISO 80% Radius Rating Rule
When agents put down the radius in the application process, they need to remember how ISO does it and also understand how your insurance company rates according to radius. Many insurance companies follow ISO rating but many other insurance companies go at it their own way.
Some companies have you rate on radius by having the requirement of classifying a vehicle based on the furthest destination. ISO looks at this way as well, but with one very important caveat.
If 80% of the trips are in a lower radius classification, you should use the lower rated classification. How should you disclose that to your underwriter?
You should use the lower radius as ISO suggests and have a note that says 20% or less or the trips are more than the radius indicated. In trucking insurance this is verified in the mileage or IFTA reports. One of the problems with mileage reports are that they are state mileage specific, and not formulated by radius. If there are miles in a certain state, the vehicle could be traveling trough more than one or two higher radius thresholds. So further underwriting relative to determining shippers and destinations is in order.
Radius underwriting in Trucking is an imperfect science. It is important to understand the ISO rule and whether the company you are submitting to concurs with the ISO 80% radius rule. How a company prices based on radius is probably as important a factor in underwriting and rating in the trucking insurance marketplace we are in.
Some companies have you rate on radius by having the requirement of classifying a vehicle based on the furthest destination. ISO looks at this way as well, but with one very important caveat.
If 80% of the trips are in a lower radius classification, you should use the lower rated classification. How should you disclose that to your underwriter?
You should use the lower radius as ISO suggests and have a note that says 20% or less or the trips are more than the radius indicated. In trucking insurance this is verified in the mileage or IFTA reports. One of the problems with mileage reports are that they are state mileage specific, and not formulated by radius. If there are miles in a certain state, the vehicle could be traveling trough more than one or two higher radius thresholds. So further underwriting relative to determining shippers and destinations is in order.
Radius underwriting in Trucking is an imperfect science. It is important to understand the ISO rule and whether the company you are submitting to concurs with the ISO 80% radius rule. How a company prices based on radius is probably as important a factor in underwriting and rating in the trucking insurance marketplace we are in.
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