Forisk: Truck Insurance Remains a Concern for the Logging Industry

Below is an excerpt from a Q3 2017 article in the Forisk Research Quarterly examining issues affecting commercial automobile insurance and log truck insurance specifically.

Large swaths of the general public still have no idea what modern logging entails. Even in areas with extensive forest industry activity, many people associate the chainsaw as the state of the art and it’s alarming how many people still ask about livestock extracting the logs. However, one thing almost everyone associates with logging is trucks. Stacked, cut logs traveling down the highway may be the most visible and recognizable aspect of the forest industry. At some point, a truck transported from the forest every forest product in use today. A functioning wood supply chain requires log trucks. Yet, the viability of log hauling challenges the entire chain. Hauling is a low profit margin operation. It is highly regulated and, in part because of its visibility, subject to frequent inspections. Increasingly, it also feels pressure from insurance markets with costs reportedly rising and availability falling.

Discussions of log truck insurance have increased at industry association meetings over the past few years as loggers raised concerns about insurance costs. To clarify our understanding of the issue, Forisk reached out to a number of people involved at all levels of trucking insurance. We spoke with logging contractors from seven states spread across the U.S., representing around 350 logging trucks. They repeated the same issues. Almost all employed drivers who had been denied coverage by an insurance company. It is increasingly difficult to cover a driver. Typically, they need two years of driving experience after gaining their commercial driver’s license (CDL). They must pass drug and alcohol tests to maintain their CDL. Often, they must also have a safe driving record. The standard for coverage denial was anything more severe than a single, minor traffic violation. Multiple violations or any “serious” violation, such as speeding more than 15 mph above the speed limit, invalidated a driver.

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