Providing coverage for truckers has become a high stakes game that has some insurance companies quitting this transportation sector.
A report noted that while the number of fatalities recorded in trucking accidents have been dropping, the settlements, which could top hundreds of millions of dollars, has insurance companies rethinking whether the business is still viable.
Among others, Zurich
dropped coverage of majority of for hire fleets this year, although brokers say they have retained their business with retailers and manufacturers that directly operate their own trucks. AIG
specifically stopped covering fleets through its Lexington
unit in an effort to improve profits.
“When they pulled out, it really triggered a panic,” Mark Brockinton, a broker with Aon
who works with large trucking companies, commented about AIG’s pull out. “Some of these verdicts I think caught them flat-footed.”
The turning point in these verdicts is the high profile accident involving a Wal-Mart truck that injured several people, including comedian Tracy Morgan, and killed a man in 2014. The children of the fatality settled with Wal-Mart for $10 million, while Morgan reached an agreement with the company for an undisclosed amount.
Meanwhile, other players hiked their premiums by 10% to 30%.