Lack of Regulatory Standards in Trucking Insurance
No federal or state legislation mandates that insurance companies assess a motor carrier’s safety fitness before issuing a commercial trucking policy. While all for-hire interstate carriers are required to have minimum liability coverage to operate, the methods for obtaining this coverage vary widely. Some involve strict actuarial underwriting and safety audits, while others use digital platforms that issue coverage without evaluating a carrier’s accident record. Originally, the federal minimum of $750,000, established in 1980, was meant to act as a safety benchmark, but it has not functioned as such for many years, with recent national data confirming this.
Research Insights on Carrier Safety Performance
A working paper, currently under peer review and available at theteaintel.com, connects FMCSA insurance filing records with safety performance data from 314,078 interstate for-hire carriers using the agency’s data from February 2026. The research classifies insurance types into four categories: underwritten programs (which assess risks), non-underwritten programs (which issue policies without safety evaluation), Risk Retention Groups (RRGs, operating under federal exemption with no state protections), and group captive programs.
Findings on Risk Scores and Inspection Rates
The results align with expectations based on the insurance market’s structural incentives, but the extent of the differences was surprising, particularly concerning the RRGs. Comparisons within groups, accounting for fleet size, indicate that non-underwritten carriers show significantly higher risk scores than equally sized underwritten carriers in five of six fleet size categories. The disparity ranges from less than a quarter point for solo owner-operators to over four points for medium-sized fleets. Non-underwritten carriers also have inspection violation rates that are 7.93 percentage points higher than the vetted average across the entire study.
Multi-Violation Inspections as a Safety Indicator
The “dirty inspection rate,” which reflects the number of inspections leading to multiple violations across various basic categories, indicates systemic safety neglect. This measure does not appear in existing safety assessments and highlights organizational issues within carriers. The consistency between the gap in composite scores and this inspection metric is significant across all fleet size categories.
Predictive Value of Insurance Category on Safety
The temporal analysis adds a forward-looking aspect; data shows that carrier performance in one year significantly predicts outcomes in the following year across all insurance categories. However, the differences are noteworthy; underwritten carriers show a 6.6 percentage-point gap between high and low performers, while non-underwritten carriers indicate a 9.7-point gap, suggesting a lack of ongoing monitoring that fosters improvement.
Concerns Regarding Risk Retention Groups
Findings related to RRGs were unanticipated and notable. RRG carriers scored significantly higher on risk metrics than their underwritten counterparts. Their inspection violation rates are notably higher, and they show no improvement in out-of-service rates over time, reflecting inadequate monitoring. The Liability Risk Retention Act of 1986 allows RRGs to operate nationwide with minimal oversight, creating a pool that attracts high-risk carriers and exacerbating systemic risks.
Policy Recommendations
It’s essential to raise the federal minimum insurance requirement, which has cumulatively lost over 70% of its purchasing power due to inflation. However, this alone won’t rectify the problem if coverage remains unassessed. A federal minimum standard requiring risk evaluations is necessary to ensure that policies reflect the carrier’s true safety record. Additionally, reforming the oversight for RRGs to require more substantial risk-adjusted capital buffers and routine solvency reviews could mitigate the adverse selection problem.
For carriers, the immediate takeaway is that insurance type serves as a reliable indicator of safety quality. Shippers and brokers can use this data as part of their carrier qualification standards. Carriers wishing to distinguish themselves from the higher-risk RRG group should consider transitioning to underwritten or captive programs to enhance their safety infrastructure. More detailed methodology and additional insight on raising the federal minimum insurance levels can be found at theteaintel.com.
