Last week, the FMCSA announced in the Advanced Notice of Proposed Rulemaking (ANPRM) that its seeking input from the public, insurance providers, carriers, brokers and freight forwarders on revising minimum insurance liability requirements.
Motor carriers are required to maintain and show proof of financial responsibility, either though a bond, insurance, or other financial means. The funds are to be called upon in the event of a crash. The current minimum coverage requirement is $750,000.
In April, the FMCSA called on Congress to raise the minimum liability insurance requirements. In a report to Congress, the FMCSA stated, ” Current financial responsibility minimums for the commercial motor vehicle industry are inadequate to meet the costs of some crashes.”
“The analysis shows that while catastrophic motor carrier crashes are rare, the costs for resulting severe and critical injuries can exceed $1 million. Current insurance limits do not adequately cover these costs, which are primarily due to increases in medical expenses and other crash-related costs,” the FMCSA states.
In July 2013, U.S. Rep. Matt Cartwright introduced the Safe and Fair Environment on Highways Achieved through Underwriting Levels Act (H.R. 2730) or “A SAFE HAUL.” The bill proposed to raise the required insurance minimum for motor carriers.
The current $750,000 minimum coverage requirement was established in 1980, more than 30 years ago, a press release from Representative Cartwright stated.
In today’s terms, with the increased cost of medical care, $750,000 is equivalent to $4.4 million, a press release from Cartwright’s office stated.
“This is a matter of public safety. Tragically, more than 100,000 people have been killed in commercial vehicle collisions since 1980,” said Rep. Cartwright. “This legislation is essential to protecting our nation’s highways and ensuring that victims receive the proper amount of compensation for their losses.”
Representative Cartwright says that the current $750,000 minimum fails to meet the basic functions intended by congress of promoting safer operations by holding insurers responsible for trucking operations inspections prior to underwriting policies.
A copy of the ANPRM and instructions for submitting comments is available at https://www.federalregister.gov/articles/2014/11/28/2014-28076/financial-responsibility-for-motor-carriers-freight-forwarders-and-brokers.
Submit your comment by February 26, 2015.