Insurance Rates Going Up

Increasing losses from cargo theft are leading insurers to raise rates and crack down on shippers and carriers that leave trailers unguarded in high-crime areas.

Some insurers are refusing to write policies in areas like Los Angeles and Miami, and they are requiring carriers to take extra security precautions to protect valuable loads, such as electronics goods, from theft, according to Gail E. Toth, executive director of the Transportation Loss Prevention & Security Council of American Trucking Associations.

“This may be the beginning of another insurance crisis, but with a new twist,” she said, referring to the dilemma created in the mid-1980s when many insurers withdrew completely from the trucking market. “The twist is geographic. Some insurers are saying they will no longer cover freight moving through Los Angeles County or other hot spots.”

Such a blanket exemption would be unprecedented, and insurance industry officials say they have no intention of denying coverage based solely on location. But they are denying claims if freight is left unattended for extended periods of time, and they are requiring carriers to provide additional security for trailers or terminal properties.

For the full story, see the Dec. 13 print edition of Transport Topics. Subscribe today.