A new dawn for insurance, safety and compensation in trucking
As an insurance provider servicing truck drivers and small fleet operators, it’s valuable to reflect on how independent owner-operators are particularly affected by the prevailing issues that influence our industry. These include driver safety, claim frequency and severity, and loss experiences. The introduction of the Guaranteeing Overtime for Truckers (GOT) Act in The House of Representatives and Senate has enormous implications for how we perceive and address these issues.
Primarily, the GOT Act aims to level the financial playing field for truck drivers, a workforce often overlooked despite their immense contribution to the stability of our supply chain. For nearly a century, motor carriers have been exempt from paying truck drivers overtime, leading to instances where drivers work upwards of 70 hours a week at a base pay commensurate with a 40-hour workweek. This Act intends to amend the Fair Labor Standards Act of 1938, requiring truckers to receive overtime compensation for work exceeding 40 hours a week.
Notably, these amendments aren’t just about fair pay; they’re intrinsically linked to improved safety on our roads and highways. By assuring compensation for overtime, we inherently discourage excessive working hours and reduce the frequency of fatigued drivers on our highways. This is, naturally, an important contributor to reducing accident rates, and positively impacting the loss experience and claims for insurance companies.
The GOT Act also emphasizes the validation of sequestrations, or “on-the-job” waiting periods, which are commonplace at loading docks and congested ports. By offering suitable compensation for these typically uncompensated periods, we are likely to see a reduction in our existing pool of overworked and underpaid drivers. Cumulatively, these factors contribute to a decrease in worker fatigue, an increase in driver retention, and, inevitably, safer roadways for all.
Moreover, the shift to recognize and reward experience can considerably transform the industry’s safety standards. Experienced truckers are more likely to demonstrate safer driving practices, and enhancing their compensation will not only improve driver safety but also reduce the frequency and severity of accidents, thereby decreasing insurance claims. The proposed changes could also alleviate the high turnover rates that worry both the trucking and insurance industries. Providing fair compensation will likely encourage drivers to remain in the profession, reducing the costs and risks associated with training new recruits.
Introduced by bipartisan lawmakers, the GOT Act appears to bring opposing sides together in more ways than one. Given the recent recommendation by the U.S. Department of Transportation to repeal excess-hour exemption, the GOT Act has garnered support from differing groups, including safety advocates, trucking associations, and crucially, insurance providers.
As a whole, the enactment of the GOT Act has the potential to usher in a wave of significant benefits. For America’s truck drivers, it promises fair compensation and improved working conditions. For the insurance industry, it forecasts improved safety, potentially leading to fewer accidents and thus a reduction in insurance claims. As we anticipate the final outcomes of this legislation, insurance and trucking industry groups should consider how to remain proactive in ensuring the financial wellness, safety, and quality of life of our truck drivers and thus, the vitality of the American supply chain we all depend on.
