By now, our readers are aware of the deadly April 26th commercial trucking accident in the Denver suburb of Lakewood that killed 4, injured 6, and destroyed 24 vehicles. Many readers will also be shocked to learn that the trucking company whose driver has been charged with four counts of vehicular homicide carried only $750, 000 in accident liability insurance, which is theminimum amount of such insurance that isrequired by federal law.
In today’s post, the commercial trucking accident injury lawyer at The Doan Law Firm will explain the federal regulations that govern the minimum amounts of accident liability insurance that a commercial trucking company must carry before it is allowed to begin, or to continue, carrying freight or other cargo. He will then explain how a trucking company can often use carrying only the minimum amount of insurance coverage to actuallyavoidpaying damages in cases where it is named as a defendant in catastrophic accidents.
Federal motor carrier law and mandatory accident liability insurance
The Department of Transportation’s Federal Motor Carrier Safety Administration has the legal authority to set rules and regulations that all interstate (and someintrastate) motor carriers must follow on a daily basis. The FMCSA cannot, however, simply change an existing regulation or impose a new one on its own.
Specifically, the FMCSA must abide the provisions of the Motor Carrier Regulatory Reform and Modernization Act ( Text, Wikipedia article, Industry summary), which is sometimes referred to simply as the Motor Carrier Act of 1980 . As it relates tomandatory commercial truck accident liability insurance, Section 387.9 requires aminimum coverage of:
$1 Million if transporting crude oil / refined petroleum products that arenot classified as hazardous
$750 Thousand if transporting materials that arenot otherwise regulated
Note that since the above represent the minimum federal requirements for liability insurance, there is nothing that would prevent a commercial trucking company from carrying more than minimum coverage (except for their ability toafford additional coverage).
Why would a company carry only the minimum amount of liability insurance?
First of all, it’s simply a matter of economics:minimum coverage is much cheaper thanmore coverage (just ask anyone who carries the amount of auto insurance required to register their car with the state DMV)!
Secondly, once an insurance carrier meets its legal option to pay the maximum amount set forth in the policy, a trucking company can simply use a little “creative accounting” to prove that it has no other assets and then file for protection under the Bankruptcy Code and leaveall the other victims withnothing!
What can I do if I’m injured in a trucking accident and the company is “underinsured?”
As a rule, you have very few options in this unfortunate situation. Depending on the laws of the state where the accident occurred, most personal injury lawyers will suggest that your best hope for recoveringany damages following such an accident are to 1) do nothing, 2) file an injury claim with yourown insurance company, 3) make sure that you file a lawsuit as soon as possible after the accident, or 4) locate others whose negligence may have contributed to your injury.
In most uninsured- or underinsured-defendant accidents, this is likely to be your only option. Although you will ultimately be responsible for the costs of your own injuries and other losses, at least you won’t incur the additional expenses of filing a lawsuit against someone that you willnever collect a single penny.
File a claim with your insurance carrier
Since your medical and property-loss expenses will begin “as soon as the dust settles,” you will probably be forced to take this option rather than wait years for a lawsuit to be settled (assuming that youwin your lawsuitand that the trucking company’s insurance carrier hasn’t “maxed out” paying other claims from the same accident).
File your lawsuit as early as possible
In some states, if there are multiple lawsuits over thesame accident a court will hear lawsuits on a “first filed, first tried” basis. Thus, if your lawsuit was filedfirst, you would be awarded damagesbefore the other lawsuits are tried. Since a trucking company’s insurance carrier is only liable up to a maximum amount, theymay offer a more generous settlement in an earlier lawsuit to avoid the expenses of having to defend against other, later, claims.
Locate other defendants
Many trucking companies use the services of “outside” sources such as dealerships or private maintenance shops to service their equipment, particularly for “roadside” equipment failures.If the cause of an accident can be traced back to improper maintenance or repairs, itmay be possible to file a lawsuit against such “third party” defendants following an accident.
We will continue to follow developments in this tragedy and will post updates on our website as they become available.