Minimum Liability Insurance Fact Sheet

This issue deals with the minimum liability insurance which trucking companies are required to have. The current insurance minimum of $750,000 was established by Congress in 1980 and has not been raised in over 30 years. This negatively impacts not only the truck crash victims but, also, the trucking companies, and the public. More information about this issue can be found in the links below.

See posts on this website regarding minimum insurance:  https://annaleahmary.com/tag/minimum-insurance/

January 13, 2019 Comment: Why is this so important? What’s it all about? Here’s a quote from the Federal Register. . .

Motor Carrier Act of 1980

The next significant legislation regarding financial responsibility was the Motor Carrier Act of 1980 (MCA), Pub. L. 96-296, which largely deregulated the motor carrier industry. Section 30 of the MCA set minimum levels of financial responsibility for property-carrying motor carriers. The MCA also gave the Secretary of Transportation (Secretary) the authority to reduce those levels, by regulation, for a “phase-in period” of up to 2 years, provided the reduced levels would not adversely affect public safety and would prevent a serious disruption in transportation service.

The MCA set the minimum financial responsibility level at $750,000 for the transportation of property, $5 million for the transportation of certain hazardous materials, and $1 million for the transportation of hazardous materials consisting of “any material, oil, substance or waste” that is not subject to the $5 million limit.^[4] Pursuant to the MCA, DOT opted to phase in implementation of the new minimum financial responsibility levels. DOT set those levels at $500,000 for property (non-hazardous), $1,000,000 for certain hazardous materials, and $500,000 for other hazardous materials not subject to the $1,000,000 limit.^[5]Pursuant to Section 406(a) of the Surface Transportation Assistance Act of 1982, Pub. L. 97-424, DOT extended the phase-in period through the end of 1984. 49 FR 27288. As of January 1, 1985, DOT set the levels at the lowest levels authorized by the MCA, and the levels have remained unchanged since.

Setting minimum levels of financial responsibility was intended to address two concerns, first, to protect the ability of the public to recover damages in the event of crashes and, second, to ease concerns that competition in the largely deregulated industry could result in cost-cutting at the expense of minimum safety standards.^{[6] Financial Responsibility for Motor Carriers, Freight Forwarders, and Brokers, ANPRM FMCSA, 11/28/2014}

Also, see this comment from Todd Reiser, vice president of the transportation practice for the Lockton Companies:

• While the effort to raise the minimum insurance level for trucking companies from $750,000 to around $4 million to $5 million is pretty much dead in the water, Reiser said raising that minimum level is still important. “I can tell you $750,000 is just not adequate,” he emphasized. “Moving forward, [a level of] $2 million or in that range would be a good step.”  Trucking insurance: Technology may help stem rising premiums, Fleet Owner, December 9, 2016

NOTE, January 14, 2019: Jerry and I submitted a petition to Secretary Chao on June 13, 2017, asking her to act with her administrative authority to immediately sign an increase to trucking minimum liability insurance. She has 180 days to respond. Will she?

After all, the current minimum liability level was only set 34 years ago.

Trucking Minimum Liability Petition Letter to Secretary Chao from Jerry and Marianne Karth

Demand for Due Diligence FMCSA Action on Trucking Minimum Liability

See in-depth article by Fair Warning on this issue: Feds Reject Insurance Hike for Big-Rigs, Pleasing Independent Truckers, Rankling Safety Advocates, By Paul Feldman on July 13, 2017

1. The trucking industry for acting to delay progress on this important issue.
2. FMCSA for not using their authority to subpoena the insurance industry to provide the necessary information for the required cost/benefit analysis.
3. The insurance industry for not providing the requested information.
4. The Secretary of Transportation for not using his/her authority to sign in an increase — as was originally intended.
5. Congress for not acting to make sure that this issue is properly addressed.
6. The President for not signing a Vision Zero Executive Order to ensure that safety rules are not delayed or diluted by cost/benefit analysis that does not give appropriate value to the preservation of human life and health.

See the April 2014 FMCSA Report on this issue: https://www.fmcsa.dot.gov/sites/fmcsa.dot.gov/files/docs/Financial-Responsibility-Requirements-Report-Enclosure-FINAL-April%202014.pdf

January 31, 2017 Update: Over two years ago, on November 28, 2014, the FMCSA issued an Advanced Notice of Proposed Rulemaking on this issue—with no end in sight. It is my understanding, from communication with DOT today, that “the FMCSA has not been able to obtain insurance rate information from the insurance companies concerning premiums to cover trucks and buses. With regard to the status of the ANPRM, we have completed our review of the comments and unfortunately the commenters could not provide information to help us with the economic analysis concerning this issue.”

From FMCSA’s report on minimum insurance, released April 2014: http://www.fmcsa.dot.gov/sites/fmcsa.dot.gov/files/docs/Financial-Responsibility-Requirements-Report-Enclosure-FINAL-April%202014.pdf

http://cartwright.house.gov/media-center/press-releases/cartwright-introduces-legislation-to-keep-highways-safe-and-protect

http://www.truckingalliance.org/news/7/trucking-alliance-commends-rep-cartwright-for-raising-minimum-financial-requirement-levels-issue-in-congress

What came out of the AnnaLeah & Mary Stand Up For Truck Safety Petition and the meeting we had with DOT on May 5, 2014? Did it make a difference? Here is the first of the three requests which we made in the petition and what has come about:

1. First Request: Raise minimum levels of insurance required for truck drivers–which has not been done for over 30 years.
2. Result: In November 2014, the FMCSA  issued an Advance Notice of Proposed Rule Making (ANPRM) announcing that they are considering a proposed rule to increase the minimum liability insurance coverage for motor carriers.  https://www.federalregister.gov/articles/2014/11/28/2014-28076/financial-responsibility-for-motor-carriers-freight-forwarders-and-brokers  https://annaleahmary.com/2014/12/good-news-fmcsa-announces-first-step-toward-increasing-minimum-liability-for-trucker-insurance/ https://www.facebook.com/464993830249803/photos/a.465869083495611.1073741828.464993830249803/741290079286842/
3. The period for Public Comments ended on February 26, 2015. The 11,391 signatures from our petition were added to these Public Comments. This will be followed by a review of these comments and a decision about whether to actually proceed with a rulemaking process. The signatures were posted on the Federal Register here: The is a Comment on the Federal Motor Carrier Safety Administration (FMCSA) Proposed Rule: Financial Responsibility for Motor Carriers, Freight Forwarders and Brokers: AnnaLeah and Mary Karth – Comments

NOTE: No further progress. June 2, 2016

SAFE HAUL Act of 2013.

Here is a site to track this bills’s progress through the legislative process: http://beta.congress.gov/bill/113th-congress/house-bill/2730?q=H.R.+2730

From that site:

“Introduced in House (07/18/2013)

Safe And Fair Environment on Highways Achieved through Underwriting Levels Act of 2013 or SAFE HAUL Act of 2013 – Revises certain minimum financial responsibility requirements to increase from $750,000 to $4.422 million the minimum level of financial responsibility sufficient to satisfy established liability coverage for motor carriers or motor private carriers providing property transportation. Requires the Secretary of Transportation (DOT) to adjust such amount annually for inflation relating to medical care.”