Closing Conn. Truck Loophole Easier Said Than Done, Insurers Warn

Insurance officials have warned Connecticut lawmakers that there is no easy way fix to a legal loophole that allowed a Bloomfield trucking company involved in a deadly July crash to operate without liability insurance.

Under state law, insurers notify the Department of Motor Vehicles when insurance lapses on passenger vehicles. But commercial vehicles are part of a separate system, they said.

Insurers don’t cover a particular truck under fleet policies, but rather the commercial entity, said Susan Giacalone, counsel for the Insurance Association of Connecticut. That means a trucking company can pull the insurance for a particular vehicle without canceling its fleet’s liability coverage.

“We simply can’t plug the commercial vehicles into the existing system,” said Kristina Baldwin, regional manager and counsel of the Property Insurers of America.

The legislature’s Insurance and Real Estate Committee held an informational hearing last Friday to come up with ways to make sure DMV is notified about lapsed insurance for trucks. The General Assembly plans to come up with legislation during a special session, to be held sometime this month or next.

Last month, survivors of the fiery, 20-vehicle crash in Avon that killed four people learned the owner of the dump truck involved did not have liability insurance for that vehicle. American Crushing and Recycling suspended coverage in January and received a $40,000 premium rebate.

The company has insisted, through an attorney, that its policy was in force at the time of the crash.

Giacalone said many trucking companies operate under multiple names, and the company names reported by insurers would not necessarily match those on file at DMV. Insurance companies don’t keep track of vehicle identification numbers for the trucks they insure, she said.

Michael J. Riley, president of the Motor Transport Association of Connecticut, said while all his members carry liability insurance, it is not unusual for some trucking companies to drop their coverage for a while. For example, firms that fill swimming pools typically drop the insurance on their trucks during the winter, he said.

But he said his group would still support tougher rules.

“We feel it is reasonable and prudent for the state to require notice of insurance and notice of termination,” he said.

The insurance officials said Friday that 14 states have notification rules, but said none work properly.

DMV Commissioner Ralph Carpenter said he believes Connecticut can do better and needs the legislature to force insurers to notify the department of lapsed coverage.

“If we don’t have some avenue to force that notification, I don’t know what the compliance rate would be,” he said.

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Topics Carriers Auto Connecticut