New minimum in the state is $1.5 million
After being held up for most of a year, the New Jersey Legislature has passed a law requiring operators of heavy trucks to carry a minimum $1.5 million in liability insurance, which is double the current federal minimum insurance requirement of $750,000.
Under the new law, the owner or registered owner of a commercial motor vehicle weighing more than 26,000 lbs. GVW will be required to maintain motor vehicle liability insurance coverage of at least $1.5 million to insure against loss resulting from liability incurred in any crash that causes bodily injury, death and/or property damage.
ICSA, in cooperation with its partner insurance providers, will determine soon how the new law will affect ICSA members based in New Jersey as well as its application to non-domiciled carriers merely traveling through or picking up and delivery freight in the state. The law does not specifically say whether it covers only New Jersey-based carriers. The law would likely be challenged in court if the state tries to apply the requirement to non-domiciled carriers based elsewhere. For additional background and comments on the law from various trucking groups, read on.
The current FMCSA standard requires carriers to maintain a minimum of $750,000 in liability insurance. This threshold has been in place since 1985, and although the agency has occasionally discussed raising the insurance minimum requirement, it concluded in a 2022 report could not find the justification to do so. “In order for FMCSA to adequately assess whether the financial responsibility requirements should be changed, the agency would need access to more detailed information from the insurance industry, including anonymized claims data,” the report said.
And while there are clear indications that litigation jury verdicts and settlements are on the rise, a 2013 study conducted by the Volpe National Transportation Systems Center concluded that “catastrophic motor carrier crashes are relatively rare,” a fact cited in the FMCSA report.
The law has faced strong opposition from such trade groups as American Trucking Associations, the New Jersey Motor Truck Association, the Truck Renting and Leasing Association (TRALA), the New Jersey Warehouse and Movers Association, and others.
“Any increase in these minimum insurance levels will lead to a dramatic increase in insurance premiums for all trucking companies,” TRALA wrote in a letter last month to the bill’s lead sponsor, a Democrat. “FMCSA has set the national standards of interstate commerce based on a series of studies and statistics that find that over 99% of all accidents are covered by the $750,000 minimum,” the letter said.
Every year, TAT (formerly called Truckers Against Trafficking) honors a member of the trucking, bus or energy industry, whose direct actions help save or improve the lives of those exploited or prevent human trafficking from taking place, with the Harriet Tubman Award
Bob Costello has indicated that the freight market has improved – but very slowly – since January. It must be said that ATA’s indices are dominated by contract freight as opposed to spot rates.
Now, however, with Republican control of both houses of Congress and the White House (and, some say, the Supreme Court) I am optimistic that trucking will get a fairer shake than it has during Biden’s term in office.