Rise in Truck Crashes, Large Payouts, Expected to Boost Insurance Renewal Rates This Year
1/2/2020 – According to Commercial Carrier Journal, truckers are being warned to Beware and Prepare. Tractor-trailer insurance rates saw an uptick this year, brought on by a rise in truck crashes and massive settlements and judgements (a.k.a. “Nuclear Verdicts”).
The worst possible rate surge could come from Washington, D.C. where U.S. Rep. Matt Cartwright, D-Penn., 8th District, is sponsoring a bill (H.R. 3781) to raise the minimum liability coverage on semis from $750,000 to $4.5 million, a 500 percent jump that would put even more upward pressure on premiums. (Read full article)
American Transportation Research Institute (ATRI)
On November 4th, 2019, ATRI released the findings of its 2019 update to “An Analysis of the Operational Costs of Trucking.” Using detailed financial data provided directly by motor carriers of all sectors and fleet sizes, this “Ops Costs” research annually documents and analyzes trucking costs from 2008 through 2018. ATRI’s analysis provides industry stakeholders with an essential benchmarking tool, and government agencies with input on industry finances necessary for comprehensive transportation planning and infrastructure improvement analyses.
ATRI’s newest 2019 Ops Costs report documents the extremely robust economic environment that carriers and drivers experienced in 2018, but these same economic conditions put considerable upward pressure on nearly every line-item cost center experienced by carriers.
The average marginal cost per mile incurred by motor carriers in 2018 increased 7.7 percent to $1.82. Costs rose in every cost center except tires, with fuel costs experiencing the highest year-over-year growth of 17.7 percent. Not surprisingly, insurance costs saw the second fastest year-over-year growth at 12 percent. As a strategic response to the severe driver shortage that existed in 2018, driver wages and benefits increased 7.0 and 4.7 percent, respectively – representing 43 percent of all marginal costs in 2018.
Repair & maintenance (R&M) costs, at 17.1 cents per mile in 2018, have increased 24 percent since 2012 – a counterintuitive increase given the record sales of new trucks and trailers. From 2012 to 2018, overall motor carrier operational costs have increased more than 11.6 percent – exceeding the 10.8 percent inflation rate for that same time period. A copy of this report is available from ATRI at TruckingResearch.org.