Trucking companies that haul hazardous materials (hazmat), already reeling from the increased scrutiny and security precautions being placed on the industry in the wake of the September 11th terrorist attacks, are now facing steep increases in insurance premiums. The increases, which were not unexpected, may cause many smaller carriers to go out of business.
According to a survey conducted by the American Trucking Associations (ATA), insurance rates for hazmat carriers skyrocketed after the World Trade Center attacks, when the Department of Transportation (DOT) warned that trucks carrying explosives and other hazardous cargoes could be used as “rolling bombs” in subsequent terrorist incidents. Under federal law, hazmat carriers already have to carry at least $1 million in insurance, but ATA reports that premium hikes for broader umbrella policies or excess insurance jumped an average of 111 percent in 2001. Carriers that renewed their coverage after September 11th found the jump to be even higher. Premiums for those truckers were raised an average of 159 percent.
The average primary insurance premiums for hazmat truckers increased 36 percent in 2001, compared to only a 30 percent increase for non-hazmat carriers. However, truckers that renewed their policies after September 11th found that their premiums increased 47 percent. Representatives of ATA and the National Tank Truck Carriers noted that fear of terrorist attacks is only one factor affecting the increases, but it is by far the most important. Also playing a role is a decrease in the number of insurance companies willing to underwrite hazmat policies.
