Truck Driving Companies Face Tough Rate Hikes

The trucking industry has been facing an ever-increasing number of issues over the last few years. As artificial intelligence (AI) and self-driving technology becomes more prominent, many experts predict that trucking will be one of the first industries to transition into automation. That’s not great news for the thousands of truck drivers who currently make their living on the road. To make matters worse, trucking companies are experiencing incredibly high insurance rates; a problem that only seems to be getting worse as time goes on.

The rising insurance costs really comes down to litigation issues. Many will remember the incident when Tracy Morgan was hit by a Walmart truck. Morgan settled with Walmart in excess of $10 million. That story is no longer uncommon. Instead of suing individual drivers, victims are going after the trucking companies, seeking massive settlements. As a result, many insurers see the risk as too high and are simply refusing to underwrite trucking companies.

John Kearney, president and CEO of Advanced Training Systems, spoke with Fox Business about this changing landscape. “If you have an accident and the opposing law firm questions where you train, there seems to now be an assumption that if you have an accident you must not have been trained adequately,” Kearney said. “That assumption means you lose a lawsuit.”

As a result, trucking companies are all going to have to heavily invest in safe practices and effective training. If they can’t prove that they did everything in their power to prepare their drivers, they could find themselves paying millions, and uninsured to boot.

The trucking market is facing a lot of problems, but the truth is that the profession won’t be going anywhere any time soon. That means that existing companies need to pivot to stay relevant and profitable in the coming years. The opportunity is there, but the means of capitalizing on it are changing.

Sources:
https://www.foxbusiness.com/money/tough-insurance-rates-hammering-trucking-companies

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