INSURERS RUNNING FROM TRUCKS * USA: ‘Nuclear’ Verdicts do it
* New York - Zurich Insurance, AIG dropped coverage of most for-hire fleets earlier this year
--- Truckers are finding it harder and costlier to line up coverage for their fleets, as a wave of blockbuster payouts over accidents pushes insurers out of the market... The number of people killed in accidents involving large trucks fell 20% in the last decade, according to the Transportation Department, though it ticked higher last year. But a string of so-called “nuclear” verdicts, where juries award tens or even hundreds of millions of dollars to families of accident victims, have made the financial consequences of those crashes harder to predict... Unwilling to bear the risk of large settlements and verdicts, Zurich Insurance Group AG and American International Group Inc. dropped coverage of most for-hire fleets earlier this year. Both insurers still cover trucks operated directly by retailers and manufacturers, brokers say. They had been two of the biggest underwriters for the business. Other insurers hiked premiums anywhere from 10% to 30%... AIG stopped covering trucking fleets via its Lexington Insurance Co. unit as part of a wider effort to improve profits in its commercial insurance division, the company said in a statement... Federal law requires trucking companies to cover drivers up to $750,000 per accident. Many self-insure up to around $1 million, then buy tiers of outside insurance to cover additional costs... The cost of that extra coverage is putting fresh pressure on the trucking industry, which already is mired in its worst slump since the recession. The average U.S. trucking company spent about 9.2 cents per mile on premiums in 2015, a figure that is up 44% in two years and doesn’t include this year’s hikes, according to the American Transportation Research Institute, an industry group. The figure is dwarfed by the 40 cents per mile spent on fuel and 50 cents per mile paid out to drivers. But diesel prices have fallen and salaries have edged up slightly, making the jump in premiums stand out... Concerns about accidents involving sleep-deprived drivers led the federal government to impose stricter limits on truckers’ hours behind the wheel in 2013, and starting late next year most trucks will be required to carry electronic monitoring devices to help enforce these rules. Higher insurance costs are spurring the trucking industry to adopt accident-prevention technology, including devices that alert drivers if their trucks drift outside their lane, he said...
(PHOTO: DAVID GARD/ASSOCIATED PRESS - Traffic moved past the scene of a June 2014 accident on the New Jersey Turnpike involving a Wal-Mart Stores truck, in which one person was killed and several, including comedian Tracy Morgan, were injured) - NY, USA - The WSJ, by BRIAN BASKIN - Oct. 14, 2016