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 the
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 actually avoidpaying 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 some intrastate) 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 to mandatory commercial truck accident liability insurance, Section 387.9 requires a minimum coverage of:
- $5 Million if transporting hazardous chemicals / materials, as defined in Title 49 CFR Parts 100-185
- $1 Million if transporting crude oil / refined petroleum products that are not classified as hazardous
- $750 Thousand if transporting materials that are not 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 to afford 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 than
more coverage (just ask anyone who carries the
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 leave all the other victims with nothing!
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 recovering any damages following such an accident are to 1) do nothing, 2) file an injury claim with your own 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 will never 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 you win your lawsuit and 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 the same accident a court will hear lawsuits on a “first filed, first tried” basis. Thus, if your lawsuit was filed first, you would be awarded damages before the other lawsuits are tried. Since a trucking company’s insurance carrier is only liable up to a maximum amount, they may 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, it may 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.