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Insurance premiums skyrocketing for tank truck carriers, survey finds

Jun 1, 2002 12:00 PM

“Premiums for bulk haulers' liability insurance have been skyrocketing, and, for many carriers the worst is yet to come,” said Cliff Harvison, president of National Tank Truck Carriers Inc (NTTC) in a special report to his members.

“Carriers renewing after Oct 1, 2001, have seen premium increases averaging 130% while those who renew after Jan 1, 2002, see hikes averaging 146%. The business reality is that tank truck carriers have no options beyond either rate increases or surcharges,” Harvison said. “The fact that only 15% of our carriers have renewed since the first of this year translates to the fact that the worst is yet to come.”

Harvison's comments came after release of a NTTC survey that concentrated on the $1-million to $5-million layer of insurance required of most tank truck carriers by federal regulations.

While many carriers insure to levels higher than the law requires, bulk transporters of petroleum products generally must have coverages of at least $1 million per incident. Transporters of most other hazardous materials, in cargo tanks, require coverages of at least $5 million. Mandated coverages include public liability and property damage and environmental restoration.

Results of the survey include:

Total respondents — 107.
Number of carriers reporting more than 33% hazmat — 82.
Of that 82, the number of carriers reporting more than 33% petroleum — 52.
Average percentage of premium increase in the $1-million/$5-million layer — 88.7% (regardless of date of renewal).
Average percentage of premium increase in the $1-million/-$5-million layer (carriers renewing after October 2001) — 130%.
Average percentage of premium increase in the $1-million/-$5-million layer (carriers renewing after Jan 1, 2002) — 146%.
Average percentage of premium increase in the $1-million/$5-million layer (carriers more than 33% hazmat and renewing after Oct 1, 2001) — 91%.
Average percentage of premium increase in the $1-million/$5-million layer (carriers more than 33% hazmat and renewing after October 2001) — 144%.
Of all reporting carriers, 77% increased their deductible, 21% remained the same, while 2% decreased.
Of all reporting carriers, 5% increased their liability limits, 12% decreased, and 83% remained the same.
32% of respondents reported increased gross revenues, 25% declined, while 43% remained about the same.
63% of all respondents reported increased costs for worker comp, averaging 25%.
Of all respondents, 43% report that they maintain levels above $5 million, and the average increase for coverage in those upper levels was 104%.