In an article published in August of 2013, Evidence Solutions, Inc. – Heavy Truck Division wrote about Rep. Matt Cartwright’s (D-Pa.) proposal to increase the minimum liability insurance that trucking companies are currently required to carry from $750,000 to $4,422,000. For over three decades, the existing insurance requirement hasn’t changed. While the increase may seem significant, it merely makes up for the lost purchasing power due to inflation.
A higher liability insurance requirement for interstate carriers is making progress. The Federal Motor Carrier Safety Administration (FMCSA) which regulates the interstate trucking and bus industries, along with the Motor Carrier Safety Advisory Committee (MCSAC) recommended to Congress the increase be adopted. On May 20th, 2014, after a lengthy study, MCSAC voted to recommend the FMCSA begin working on the rule change to increase the minimum financial responsibility requirement to $4.422 million. In addition to the increase, the MCSAC recommended that an automatic adjustment to the Medical Consumer Price Index (CPI) be factored in every four years. The medical CPI is much higher over the last 30+ years than is the overall CPI. Using the medical CPI is important due to the fact that most significant claims against Interstate Trucking are for catastrophic injuries.
The proposed changes to the financial requirement regulation will be published soon. The public will then be invited to comment on the changes. It is likely the insurance industry will support the move, as will the larger national carriers. The mom and pop owner/operators will likely oppose any change to the current minimums.
In addition to the base minimum insurance rate, the FMCSA is expected to recommend higher rate for other types of trucking and transportation as well. In general, the requirements are:
• Carriers of Non-Hazardous Property: $750,000 of liability insurance is required for trucks weighing more than 10,001 pounds and traveling between states or countries.
• Insurance Requirements for Carriers of Hazardous Materials including: radioactive materials, explosives, gases in containers larger than 3,500 gallons and any amount of materials that are poisonous by inhalation and the gross vehicle weight is less than 10,000 pounds is currently: $5 million in liability insurance, whether the truck travels across state lines or not.
• Trucks Weighing 10,001 pounds or more are required to have $5 million of liability insurance is required if the truck carries hazardous materials in containers of greater than 3,500 gallons, carries bulk explosives or materials poisonous by inhalation.
• For-Hire or Private Trucks 10,001 pounds or more, carrying other hazardous materials must have $1 million of insurance is required if the carrier: marries, in bulk, miscellaneous hazardous materials not included in either of the above scenarios, including oil, or listed in the hazardous materials table. ( For more information, look at FCMA’s hazardous materials information pages. )
• Insurance Requirements for Passenger Motor Carriers: Interstate or foreign, able to carry 16 or more passengers, including the driver, is $5 million of insurance, if the carrier goes between states or countries.
• Motor Carriers of Passengers who carry 15 or fewer passengers, including the driver, must have $1.5 million of insurance if the carrier travels between states or countries. The exceptions to this rule include: school buses, taxi cabs with fewer than 7 passengers, and commuter vehicles with less than 16 passengers on a daily round trip.
