Are the current levels of “financial responsibility” — primarily liability insurance — for carriers too low?
This is a question that the Federal Motor Carrier Safety Administration (FMCSA) has been examining since a report released in April indicated that the existing $750,000 minimum is inadequate for many incidents that result in claims exceeding this amount.
Industry groups like the American Trucking Associations and the Owner-Operator Independent Drivers Associations argue that only 1 percent of trucking-related accidents exceed this minimum threshold. They believe raising the minimum would be impractical and would likely lead to higher premiums for motor carriers.
As part of a possible rulemaking to adjust the minimum coverage, FMCSA released a set of 26 questions on November 26 that it seeks answers to from both fleet operators and owner-operators.
This inquiry is part of an Advanced Notice of Proposed Rulemaking intended to collect feedback from the trucking industry prior to any changes being made to the regulations. Carriers are invited to submit their formal responses via the regulations.gov portal by February 26.
Here are some of the key areas and questions that FMCSA is exploring for trucking industry feedback:
Premiums
- What are the current insurance rates for carriers, and how do they differ based on FMCSA’s safety ratings?
- How much would insurance premiums rise with each 10 percent increase in the required liability coverage?
- What percentage of fleets currently have insurance coverage above the minimum requirements?
Current Insurance Levels
- How frequently do accidents result in costs that surpass the current minimum thresholds, and how often are carriers held responsible for these additional expenses?
- Do such accidents lead to bankruptcies among carriers?
Impacts of Increasing Insurance Coverage
- Would smaller carriers experience different effects from larger carriers if coverage limits were raised?
- Could an increase in minimum coverage hinder carriers’ ability to acquire insurance?
- How would higher minimums impact carriers’ investments in safety initiatives, preventive maintenance, or technology?
Timeline
- What would be a reasonable phase-in period if FMCSA decides to raise the minimum coverage amounts?
- Should there be a systematic approach to update these minimums in the future based on inflation metrics, and how often should such updates occur?
Self-Insurance
- Should FMCSA strengthen the requirements for carriers that self-insure to ensure they have “adequate safety programs” in place?
To share your thoughts with FMCSA on these and other topics, click here.
