Ever since the Motor Carrier Act of 1980 deregulated the trucking industry, business has boomed. The industry carries over 9 billion tons of freight each year, which makes up about 70% of U.S. shipments. Unfortunately, with an increase in the amount of trucking traffic has come an increase in the amount of accidents. According to the Federal Motor Carrier Safety Administration (FMCSA), there has been an upward trend in the number of truck accidents that result in injury or fatality as recently as 2012. In that year, there were nearly 4,000 fatal truck accidents and 77,000 accidents that resulted in injury.
Minimum Insurance Regulations Established in Motor Carrier Act of 1980
Because a certain number of truck accidents are inevitable, the Motor Carrier Act of 1980 established minimum levels of insurance that trucking companies were required to carry. The purpose of the minimum level was to protect the public’s ability to recover damages if they were injured in an accident with a commercial truck.
The act set the minimum insurance level at $750,000 for freight transportation, $5 million for trucks transporting certain hazardous materials, and $1 million for trucks transporting other hazardous materials that do not fall under the $5 million requirement.
Minimum Insurance Levels May Be Raised
The minimum levels of insurance established in 1980 have not been raised since they were first set 35 years ago. This presents a problem because it has not kept up with inflation and rising medical costs. Often, victims of a truck accident may have medical bills alone that exceed the minimum insurance levels. So when a trucking company’s insurance is insufficient to cover the total damages, those costs get shifted onto the victim and federal programs such as Medicare and Medicaid.
Simply put, the current minimum level of insurance that trucking companies are required to carry is no longer sufficient. That position is supported by the Volpe study conducted by the FMCSA. That study found that raising insurance minimums would improve compensation for truck accident victims, adjust for rising costs of medical care, and help reduce the number of accidents.
As a result of the Volpe study, the FMCSA is considering rule changes that would raise the minimum level of insurance. Public comment on the proposed rule changes have recently been closed to allow regulators to consider all arguments.