Truckers Minimum Insurance Limits May Increase in 2016
Most likely later in 2016 truckers would be required to buy higher insurance limits under a government proposal, although how much higher is not yet known.
The Federal Motor Carrier Safety Administration (FMCSA) concluded in a report to Congress that current minimum financial responsibility limits for the commercial motor vehicle industry — including the $750,000 limit for general freight carriers— are inadequate to meet the costs of some crashes, mainly because of rising medical costs.
The agency stopped short of recommending specific new limits but could have a proposal by the end of June and new limits could be published in November.
Truckers are split, with some accepting higher limits and others opposing them as unnecessary and a burden on smaller trucking firms.
Insurers aren’t saying anything, yet anyway, while insurance brokers, noting that many truckers already buy more than the minimum limits, agree that current minimum limits are too low.
The FMCSA study found that catastrophic motor carrier crashes resulting in injury, death and/or damages that exceed the current limits are relatively rare — less than one percent of 3330,000 crashes analyzed. However, while catastrophic crashes are rare, the costs for the resulting severe injuries can exceed $1 million and current insurance limits do not adequately cover these costs, according to the report.
Congress required the FMCSA report on comparing the benefits of increasing insurance minimums, including improved compensation for crash victims and reductions in commercial vehicle crashes, with the costs imposed on commercial motor vehicle operators and the insurance industry.
FMCSA regulates all registered commercial motor vehicles that operate interstate or that carry hazardous materials‑ or close to 540,000 motor carriers— and their 5.6 million drivers.
Current minimum financial responsibility levels imposed under federal law are:
$750,000 for for-hire interstate general freight carriers
$1,000,000 for for-hire private carriers of oil and hazardous materials
$5,000,000 for for-hire and private carriers of other hazardous materials
$1,500,000 for for-hire passenger carriers of 15 or fewer seats
$5,000,000 for for-hire passenger carriers with more than 15 seats
$300,000 for for-hire general freight carriers of less than 10,0001 pounds
(The report does not examine the current bond and insurance requirements for freight forwarders and brokers since these requirements were set at $75,000 effective October 1, 2013.)