March 4, 2026 2:20 PM, EST
Key Takeaways:
A recent report submitted to Congress reveals that current federal minimum insurance standards for the trucking sector do not sufficiently protect against catastrophic losses due to soaring medical costs over the past four decades.
The Federal Motor Carrier Administration (FMCSA) issued a 14-page report titled “Examining the Appropriateness of the Current Financial Responsibility and Security Requirements for Motor Carriers, Brokers and Freight Forwarders — Report to Congress” detailing the financial responsibility mandates for motor carriers of both property and passengers as well as the bonding and insurance obligations for brokers and freight forwarders. Brokers are those compensated to facilitate the transportation of goods by licensed motor carriers. This report is released every four years.
The report states, “The diminishing real value of current minimum financial responsibility thresholds is essentially undermining the role of insurance in covering catastrophic accidents.” The FMCSA found that the current insurance limits are inadequate for major crash events primarily due to escalating medical expenses.
The agency noted that costs associated with serious crashes can easily exceed $1 million, although it recognized that catastrophic incidents involving motor carriers are relatively uncommon. Additionally, the report highlighted rapidly increasing monetary assessments for mortality risks, known as the value of a statistical life (VSL). A comparison showed that the VSL estimated 13 years ago was $6.2 million, while the Department of Transportation’s most recent recommendation in 2024 stands at $13.2 million.
As of January, the FMCSA mandates that brokers and freight forwarders maintain a surety bond or trust fund of $75,000.
The current required minimum levels of financial responsibility for bodily injury and property damage insurance for fleets are as follows:
- $300,000: for-hire general freight carriers for commercial vehicles weighing under 10,001 pounds
- $750,000: for-hire interstate general freight carriers
- $1 million: for-hire and private carriers transporting oil and certain hazardous materials
- $5 million: for-hire and private carriers transporting other hazardous materials
These minimum requirements have remained unchanged since 1985.
The FMCSA report emphasizes that the landscape of crash costs has shifted due to rising medical expenses, creating a gap between the current minimum insurance levels and actual costs incurred in serious injury and fatality incidents.
Traffic on a foggy, rainy Interstate 5 in Los Angeles. Minimum financial responsibility levels for fleets have not changed since 1985. (Trevor Srednick/Getty Images)
The FMCSA notes that from 1985 to 2024, the average annual medical consumer price index rose by 4.21%, outpacing the core inflation rate of 2.8% and further diminishing the real value of the required insurance coverage in the trucking sector.
Consequently, insurance is increasingly unable to fulfill its essential role in severe crash incidents. Adjusted for inflation, the coverage for general freight would approximate $2.2 million using core consumer price index adjustments, or about $3.7 million with medical CPE adjustments, the report stated.
The trucking industry transports around 12 billion tons of freight each year. As of December, FMCSA records indicated there were 456,227 for-hire property carriers required to file proof of financial responsibility, alongside 1,875 freight forwarders and 25,127 registered brokers.
