“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 the association membership. "Carriers renewing after October 1, 2001, have seen premium increases averaging 130 percent while those who renew after January 1, 2002 see hikes averaging 146 percent. The business reality is that tank truck carriers have no options beyond either rate increases or surcharges. The fact that only 15 percent of our carriers have renewed since the first of this year means the worst is yet to come."
The NTTC President's comments followed release of a survey, conducted by NTTC, that concentrated on the $1 million through $5 million layer of insurance required of most tank truck carriers by federal regulation. While many carriers insure to levels higher than that required by law, it is a general rule that bulk transporters of petroleum products 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.
"Carriers renewing after October 1, 2001 have seen premium increases averaging 130 percent while those who renew after January 1, 2002, see hikes averaging 146 percent," said Harvison. "The business reality is that tank truck carriers have no options beyond either rate increases or surcharges. The fact that only 15 percent of our carriers have renewed since the first of this year translates to the fact that the worst is yet to come."
Detailed survey results are as follows:
1) Total respondents = 107
2) # of carriers reporting over 33% hazmat = 82
3) Of that 82, the # of carriers reporting over 33% petroleum = 52
4) Average percentage of premium increase in the $1m/$5m layer = 88.7% (regardless of date of renewal)
5) Average percentage of premium increase in the $1m/$5m layer (carriers renewing after Oct., 2001) = 130%.
6) Average percentage of premium increase in the $1m/$5m layer (carriers renewing after Jan. 1, 2002) = 146%
7) Average percentage of premium increase in the $1m/$5m layer (carriers over 33% hazmat and renewing after Oct. 1, 2001) = 91%
8) Average percentage of premium increase in the $1m/$5m layer (carriers over 33% hazmat and renewing after Oct., 2001) = 144%
9) Of all reporting carriers, 77% increased their deductible, 21% remained the same, while 2% decreased.
10) Of all reporting carriers, 5% increased their liability limits, 12% decreased, and 83% remained the same.
11) 32% of respondents reported increased gross revenues, 25% declined, while 43% remained "about" the same.
12) 63% of all respondents reported increased costs for workers comp, averaging 25%
13) Of all respondents, 43% report that they maintain levels above $5 million and the average increase for coverage in those upper levels was 104%.