James F. Mahoney, Attorney
Commentaries
 
     

March 2012

Liability Insurance Rates: What Drives Them Up?

Despite all the hype that CSA scores will move your insurance rates, the real drivers
of insurance premiums are reinsurance rates and the catastrophic property losses

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Truck liability insurance rates not tied to safer roads. Rates are going up despite decline in injuries and fatalities in trucking-related crashes.

Despite all the hype that CSA scores will move your insurance rates, underwriters pay lip service to these indicators. The real drivers of insurance premiums are, and probably will always be, reinsurance rates and the catastrophic property losses.

Rates for truckers are on the rise because of reduced underwriting capacity due to cat losses and reduced competition among insurers for cash flow. If you've ever had a reason to consider alternative risk mechanisms such as well-intentioned, well-supervised and well-funded captives, this is it, right now.

In 2010, 32,885 people died in motor vehicle traffic crashes in the United States; this is the lowest number of fatalities since 1949 when we had 30,246 fatalities. There was also an additional 3% decline in the number of people killed, from 33,883 in 2009, according to NHTSA’s 2010 Fatality Analysis Reporting System (FARS).

A slight increase of 1% in the number of people injured was not statistically significant from the number of people injured in crashes in 2009.

Alcohol-impaired-driving fatalities, i.e., fatalities in crashes involving a driver or motorcyclist with a BAC of 0.08 grams per deciliter (g/dl) or greater declined by 5% in 2010; yet alcohol impaired fatalities still accounted for 31% of all fatalities.

However – there was bad news. A 9% increase in the number of people killed in crashes involving large trucks. Fatalities to occupants of large trucks increased by 16%.

Among fatally injured passenger vehicle occupants, 51% of those killed were unrestrained. Of occupants killed at night, 61% were unrestrained, compared to 42% who were unrestrained during day time.

When looking at the time of day of crashes – and this should be an issue as the FMCSA rewrites the night-time reset requirements - 86% of the total decline in fatalities could be seen in nighttime crashes. Of the 998 fewer fatalities in 2010, there were 857 fewer fatalities in nighttime crashes. Nighttime is defined in the study as the hours between 6 p.m. to 6 a.m.

Over three-quarters - 78% - of the overall decline in fatalities came from a decline in weekend crashes. Both Arizona and California saw a 5.5% reduction in fatalities.