Owner-Operator Independent Drivers Association announced that it is supporting one of its owner-operator members in a demand for class arbitration with FFE Transportation Services over several alleged violations of the truth-in-leasing regulations. This is the first time that OOIDA has recommended use of arbitration for resolving a dispute over the leasing regulations. Last year, the U.S. Supreme Court ruled that arbitrators have the authority to certify classes. OOIDA emphasized that while it recommends exercising the new option for classwide arbitration, it is not softening its reliance on the federal court system.
A federal district court in Jacksonville, Fla., rejected a request by Landstar System and its subsidiaries to dismiss a lawsuit filed by the Owner-Operator Independent Drivers Association regarding chargebacks. Landstar challenged OOIDA’s private right of action, the authority of the court to order the payment of damages and the four-year statute of limitations claimed by OOIDA.
Texas Court of Appeals ruled that a shipper had not waived its protections under the federal Carmack Amendment simply because the contract set the carrier’s liability for losses in Mexico at zero. While that contract term may be common practice and may have reflected the parties’ intention that the shipment not be subject to Carmack, it does not represent an express waiver of Carmack, the court ruled. (Celadon Trucking Services vs. Titan Textile Co.)
Q Our company is a small over-the-road carrier that transports expensive shipments in truckload quantities. About half of a truckload worth $500,000 was damaged beyond repair, and the shipper filed a claim for $250,000. Although we have cargo limits of $200,000 per occurrence, our insurer has stated that it will only pay $100,000 of the claim less the deductible because of some co-insurance provision in the cargo policy that we knew nothing about. Can this be right?
A Co-insurance provisions often show up in casualty policies. Insurers use them to keep policyholders from under-insuring property on first-dollar coverage. A typical co-insurance provision reads something like this:
“In the event of a loss to which the limit of liability applies, the insurer shall in no event be liable for a greater proportion of such loss than the limit of liability involved bears to 100 percent of the evaluation of contents of the vehicle at the time such loss occurred.”
Co-insurance provisions can have surprising and devastating effects. In your case, your coverage of $200,000 per occurrence is 40 percent of the $500,000 worth of goods on the truck. So your insurer will pay only 40 percent of the loss, or $100,000.
