After being denied by Congress earlier in the year, the Federal Motor Carrier Safety Administration (FMCSA) is once again seeking to impose higher insurance coverage limits on the commercial trucking industry. Late last month, the organization issued a public notice regarding the proposed rule changes, seeking comment on requiring commercial trucking industries to carry insurance plans with increased policy limits for bodily injury and property damage. The proposed changes would also require brokers and freight forwarders to carry insurance coverage and revise current rules regarding trip insurance and self-insurance.
Currently, trucking companies are only required to carry insurance with a minimum level of payout set at $750,000. Those rules have been in place since 1982. The FMCSA sent a report to Congress in April showing that some accidents involving commercial trucks cause injuries and damage that far exceed $1 million and the current minimally required insurance plans do not cover those costs. The study reported that the primary driver of the now inadequate policies is the rising cost in medical care and that the current minimum policy coverage has not risen in line with inflation. Because of those effects, the true value of the current insurance coverage has decreased significantly since the rules were first enacted over three decades ago.
Previous Attempts Failed
The FMCSA presented this data to Congress last spring, but the House of Representatives voted against the request in June of 2014. The FMCSA hopes to go back to Congress with additional reports to further substantiate its position. The previous report did not address the regulatory costs of increasing financial responsibility limits, nor did it assess expected increases in premiums that trucking companies would be likely to face if the new rules were enacted. Much of that information was not publicly available to the FMCSA because there are no standard pricing practices in the insurance underwriting process. Therefore, most of the available information was limited.
The FMCSA will be seeking additional information and comments on the proposed rule changes from the public and other organizations that have studied minimum insurance levels such as the American Trucking Associations and the Alliance for Driver Safety and Security. Those comments are due to the FMCSA by February 26, 2015.