Million dollar verdicts and narrow margins give trucking insurance a bad name

Million dollar verdicts and narrow margins give trucking insurance a bad name | Insurance Business

Million dollar verdicts and narrow margins give trucking insurance a bad name

Trucks transport nearly 71% of all freight moved in the US and are the lifeblood of the economy, according to the American Trucking Associations, but thin margins in the industry can make it a difficult sector to insure.

“Commercial auto has been a tough segment for commercial insurance in general for years,” explained Andrea Dickinson, EVP and transportation practice leader at AmWINS Brokerage of Tennessee. “It’s been tough for people to make a profit on commercial auto.”

The legal landscape hasn’t helped – many attorneys advertising their services on billboards specifically target people who have been hit by trucks and are regularly suing trucking companies, which often results in bad verdicts for these clients.

“We’re seeing a lot of astronomical verdicts come out against trucking companies for accidents that are not even their fault,” said Dickinson, adding that they can get drilled with $100 million judgments. “When you’re investing millions of dollars in safety potentially, and doing what you think is right, and you still get verdicts like that – it’s very difficult to know how you can plan for something like that.”

Dickinson is seeing trucking companies request higher limits on their insurance to make sure they’re protecting their balance sheet, but technology is also helping to reduce risks. Front and rear-facing cameras have become more prevalent, and come in handy during accidents.

“We’ve seen video footage where another vehicle has purposefully flamed on their brakes in front of a truck for no reason, just possibly to get money out of them, and because we have that video footage, it’s really helped in the defense of those types of claims,” Dickinson told Insurance Business, listing telematics and crash avoidance technology as other areas of investment for companies under her specialty. “Those are expensive technology investments, but we all view that it’s worth it because it helps them from a risk management perspective.”

Autonomous vehicles are likewise on the radars of trucking companies, though Dickinson predicts that they won’t be on the roads anytime soon.

“Everyone is definitely interested in the technology and I know there’s just a lot of testing going on, but I think they need to see first how does it work, how does it benefit them. Trucking companies are directly tied into the US economy – they move the freight that we’re buying, food, retail, whatever it is – and the cost associated with trucking and the shipping, it’s tied back to the American consumer in some way, shape or form. It’s just a matter of how soon could everyone afford to start buying an autonomous vehicle,” she said. “I think we’re a good 20-plus years away before we see a full switch to autonomous, but I think we’ll see little steps.”

Getting people comfortable with writing insurance for trucking companies is another part of the job. Not every trucking company is a high-level risk to underwrite – as with any industry, there’s varying degrees of risk for each client, and it’s about finding solid markets to write the accounts and making sure that these commercial trucking companies have appropriate coverage, according to the EVP.

“So many people have negative connotations associated with trucking and a big part of our job is to advocate for the industry and try to make people understand all the great things they do for our country, and for the economy,” she concluded.

 

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