New research reveals that premiums of commercial auto insurance climbed for the second year running. Critics contend that this goes against the aim of a 2021 state law—which is to lower expenses by making it more difficult to sue transportation businesses.
Based on a weighted rated change analysis and a new Texas Department of Insurance report, commercial insurance rates for all vehicle types rose, on average, almost 28% in the three years since a law targeting civil lawsuits against trucking companies passed (through June 30 of this year).
TDI notes that business rates have increased by an average of 73% since 2017. As yet unknown are the 2024 final figures.
Originally considered the most dangerous in the nation, House Bill 19 established a "bifurcated" trial process for suing trucking corporations engaged in accidents on Texas roadways. Under HB 19, civil cases involving a commercial vehicle are practically divided into two trials. Before a jury can examine, in a second phase, whether the firm bears any responsibility—and if so, how much—that driver must first be found negligent.
In a trial's "second phase," juries can only hear specific allegations—that of a company's negligent hiring or training of an employee. Lawyers claimed the regulation muzzles a victim's capacity to present their story in court.
Proponents claimed the measure is meant to stop jurors from "unfairly" punishing companies through massive so-called "nuclear verdicts," not to hinder "legitimate" victims from seeking justice.
A selling factor to legislators, the legislature assigned TDI to investigate how the law affected insurance rates.
Effect Cannot Be Measured
TDI started interviewing carriers who changed their rates last year. The research states that their answers fell into three categories: HB 19 has "no impact," the impact is "immaterial to rates," or it is "too early to determine" how significant the bill will be.
TDI claimed, "so far," it has yet to notice "any impact" from HB 19, while several insurers reportedly supplied data pertaining to the shift in lawsuit rates.
From 2017 to 2024, the average liability premium for all kinds of vehicles rose by 70%. For trucks, tractors, and trailers, it climbed 75% throughout that period.
As tort reform is pursued and insurance companies hike insurance prices, legal rights for companies have been on the chopping block. In the end, the hope is to lessen accidents while not continuing to remove rights from companies.