FMCSA: Current insurance minimums for carriers ‘inadequate,’ new rule coming

| April 22, 2014

truck crashThe current $750,000 minimum liability insurance required to be held by carriers is too low, said the Federal Motor Carrier Safety Administration this week, and the agency plans to create a rule upping that minimum. 

In an agency report to Congress released this week, FMCSA concludes that the $750,000 liability limit set in 1985  does not “adequately cover catastrophic crashes” today, due chiefly to inflation and increased medical costs, the agency says. 

Related

House bill would increase trucking insurance minimum by millions

A bill referred to the House's transportation committee last week would raise the minimum insurance required by trucking companies from $750,000 to $4,422,000.

Had the number kept pace with the core consumer price index (a measure of inflation), the minimum required insurance would be $1.62 million, FMCSA says, but if the number had kept up with the medical consumer price index, which measures the increase annually in medical costs, carriers would be required to have $3.18 million in liability insurance.

The agency’s study was required by the MAP-21 highway funding act from 2012. The law required  FMCSA to study the adequacy of the minimum and the possibility of raising it. 

The Owner-Operator Independent Drivers Association says the insurance increase “would be a death nail for small businesses” in the trucking industry, and OOIDA Executive Vice President Todd Spencer says that just 1 percent of all crashes where trucks are involved exceed $750,000 in damages. 

“The agency seems to be bowing to the economic objectives of the personal injury attorneys and mega-trucking companies who have been campaigning for higher insurance requirements,” he said. “Trial lawyers will see windfall payouts in the increases, and big trucking companies — who already use special exceptions in the law to avoid buying insurance on the open market — see an opportunity to drive up business costs and do away with their small-business competitors.”

The agency backs up the point about 1 percent of all crashes exceeding the current minimums, but the Trucking Alliance, an association of fleets, said in a report last March that between 2005 and 2011, 42 percent of the settlements paid by its carrier members exceeded $750,000. The per-occurrence average determines true risk, the Alliance noted then

Related

As agency studies, one group wants increased insurance requirements for carriers

The MAP-21 law requires FMCSA study the minimum insurance requirement, but against the wills of other trucking groups, the Trucking Alliance is pushing for an ...

The American Trucking Associations, however, says it questions FMCSA’s study and does not see a correlation between insurance minimums and safety. 

“ATA has yet to see any evidence that increased insurance minimums will lead to improved highway safety, and until we can review the underlying Volpe study FMCSA’s report relies on, that continues to be the case,” ATA said in a statement. “In addition, we are disappointed by the report’s lack of depth in exploring these issues.”

The agency attempts to quell carriers’ fears about increased insurance premiums by saying in its study that insurance rates have “declined slightly on average in nominal terms” for the same level of coverage. Adjusted for inflation, insurance rates have dropped too, the agency says, adding that the current $750,000 minimum runs about $5,000 a year per truck. 

Despite critics of the study, the agency says it has already formed “a rulemaking team” to determine a new minimum liability level. The rule is now “among [its] high priority rules,” FMCSA’s study says. 

  • USMC 69-75

    I highly doubt it, just the righting of the trucks and cleaning the highway, fortunately no others were involved. The one could have been a real nasty, a Coronado 53 ft van came off one interstate ramp onto another interstate ramp at about 75 mph, laid her down across the entire west bound lanes and entrance ramp…..good thing nobody was at that point heading west bound!
    I’m sure both drivers are looking for jobs today…

  • USMC 69-75

    When you learn the ropes of the trucking game come on back!

  • Mello

    Not a o/o… driving for 6years now company driver… all I can say is if I got a 40mph truck and 500mi a week I really dont care as long my check still 1200-1500/wk. Its all about the gov making as much money as possible as all these addons just make it easier for o/o more so than companies to fail and be fined for some b.s. reasons. It took me all of 2months when I first started driving to realize being a o/o is not even a option. Want to run your own company. . Buy a hot dog cart.. trucking is not it. We can vote complain and everything else under the sun, but behind the doors they are going to set what they need done regardless of how it impacts us individually as drivers. (P.s. so agree with shadow.. lmao)

  • Hollywood

    It’s time to quit trucking. Shove it up your bumper.

  • Stormy

    Didn’t Obamacare lower and continue to lower the cost of medical expenses. I thought that was the last lie I heard about it. I would say they can’t have it both ways but obviously they can do and say anything they want. We are just now calling FMCSA out on the restart it has been in effect for a year and we aren’t even making a rippple! This is not just Obama, he is just the mouthpiece, this apple is rotten from the core all the way out.

  • jojo

    Well if you’ve had enough and want to walk away, I respect that.
    I would hope that you would at least inform your legislatures WHY you have decided to do so.

  • mousekiller

    People like You are the problem with todays trucking. You have such a small mind you cannot communicate with out the F bomb in daily conversations. You are small minded and your mother should have washed your mouth out with lye soap when you were younger. Your the dumpster diver driver that is killing this industry due to lack of civility and personal pride. It must be hard for you to order eggs and toast at a restaurant with out the f bomb in your order. .

  • mousekiller

    Consider the cost of fixing the road damage. labor for several different companies involved in clean up. The cost of investigators. The tow bills. The cost of the cargo damage can amount to near a million . pharmacy, electronics.,etc .The list goes on. Lost truck or repairs for it. Lost trailer. Replacement costs for either or both . Medical expenses. It can amount to well over a million dollars aggregate. there are expenses we don’t see when we see the flipped truck and a wrecker.

  • Pingback: The Increasing Urgency of Driver Safety | Safety Is My Goal's Blog

  • Brenda B

    I love your comment…..so funny……and right on!

  • Nejedlo Trucking

    Rep Matthew Cartwright PA, who introduced this bill, is the husband of Marion Munley. They practice law in the firm Munley, Munley & Cartwright, Plains PA. Their firm specializes in lawsuits against trucking companies. Follow the money.

  • Stormy

    Personal auto only require $30,000 CSL in some states and $50,000 in most states. Wow… what a difference for the most dangerous drivers on the road.

  • independent driver

    I agree 100% with you. I’ve been doing this for 40 years and it’s getting rediculous ! We all need to stick together and make our voices heard. And there lies the problem, we have all these idiots out there that just don’t care , they come here with a friend or relative get a truck and run it 24/7 for 2 to 5 years and go back to their country. I’m 3rd generation trucker and it’s just getting rediculous it’s getting to the point that it’s not worth the aggravation anymore. If we all stick together we can get results but getting even most of us to do this will take a miracle. For myself I have no problem shutting down for a week which I will do because I need to vote and get a few people out of politics especially in my own state . The ones with their heads up king Obama ass. What these idiots are trying to do is wrong and their trying to put us all out of business. And they’ve been doing a good job at it because I already know people that have closed up shop and had enough.the government already doesn’t do what their supposed to with all the money we give them for all the extra taxes we pay instead they use it for whatever they want and now they want more? And they want to raise my insurance on top of everything else? And let’s not mention an electronic babysitter in my truck that I can’t afford and then have to pay someone to keep track of ? I own 1 truck and I know what it does and where it is because I’m in it!! I’m in my 50’s and now I’m working towards doing something else at my age instead of what I born into and grew up doing all my life . I’m just so disgusted with what the feds and these big companies are doing and their trying to control everything that has to do with it ! They basically want to be sitting in the truck with me holding my hand and then taking all the profits !

  • independent driver

    I have to agree with you there us o/o know more of what’s going on than these steering wheel holders and if it doesn’t pay it’s not getting hauled on my truck I can guarantee that !

  • https://www.statefarm.ca/agent/CA/AB/Calgary/Ted-Yan-GQB585PH9AK Calgarystatefarm

    It’s good that they are realizing this is a problem and addressing it.

    Ted Yan

  • Jack Davis Jr.

    Damn, sounds like to me there trying there best not to have any owner operators. My lord, look how many independent trucks you had several years ago compared to now. You do that, there want be any left.ets take some of all the money you people make and start helping getting us out of dept and see how it a not to bring a check home. This is a freaking joke

  • Jack Davis Jr.

    And it takes more than a handful to do anything. It’s like other drivers are scared or something or has the government already bought there asses. What we need is everyone go back United and the White House needs to let GOD back in ASAP. Ever since they threw GOD out, look what has happened to our country that is getting bought by other countries. Put GOD back in the White House and then see what happens to the United States…..

  • Being Real

    True economics 101:
    Big Business (Special Interest Groups)+ Politics (Campaign Contributions)= -O/O (No more O/Os).

  • Dave Bradley

    Some one here is not up to date; $5 a mile for over size and heavy haul?? (considered together all the same) Last I heard several years ago they were getting $7 to $9 a mile.

  • Dave Bradley

    without even thinking I know of a hell of a lot more than 5 truck stops in NM. you “fancy Dan’s” only know places like Petro Pilot J and the likes who are the biggest rip offs on the hwy.

  • Pingback: #DOT adds raising #CarrierInsuranceMinimums to #Regulatory calendar, pushes #SafetyFitnessRule back | iTruckTV

  • liljimmies

    They would IF EVERYONE quits hauling their loads!!! Have to get it together drivers and BIG companies!!

  • liljimmies

    AMEN!!!

  • liljimmies

    I would second guess that figure also, I didn’t get charged with a 4 wheeler side swiping me BUT a VA trooper wrote it up as being my fault and my insurance company raised my insurance $2,000 more a year because of that jerk lying about the accident!!

  • Ron

    Wonder how much money Fmcsa has received from Accident attorneys. I am sure they will tell us. Hahahahaha

  • Ron

    Let me know if you can get all independents together I will help anyway I can .I have some ideas how to strike without a lot of people getting hurt

  • http://www.driveforfreedomfoundation.org Brian Carlson

    Deregulation, that powerful legal, economic, and political movement of the last decade, is beginning to reveal its profound impact upon the industries it has grasped. 1970s, 1980s, Reagan Carter era… deregulation embraced airline, railroad, bus, telecommunications, broadcasting, banking, cable television, oil and gas and motor carrier industries. Stripped bare of government bureaucrats and layers of red tape, firms in these industries were cast into the seas of the free market to sink or swim on their own.

    Not unlike other deregulated industries, the motor carrier industry has been plagued by severe economic problems in the decade of deregulation. Indeed, perhaps the most onerous economic impacts of deregulation have been suffered by savings and loan institutions and motor carriers. Although deregulation of the thrifts made the headlines because the taxpayer has been saddled with more than half a trillion dollars in federal insurance liability, the trucking story has been left untold. And now they PILE on. Trucking only makes the local news when a semi turns over on the interstate and flattens a few automobiles. But make no mistake about it, the economic carnage in both industries has been relentless.

    Understand this-The level of bankruptcies and rate of concentration among motor carriers have been unprecedented in business history. The public served by the trucking industry is paying highly discriminatory prices for service. Motorists are endangered by an unacceptable deterioration in the level of safety.(Large Carrier Quick Buck Training) As we shall see, these deleterious results of deregulation in the 1980s and 1990s parallel those which preceded economic regulation of motor carriers in the 1930s and of the railroads in the 1880s.

    The movement of goods over the highways accounts for more revenue than all the other modes of transportation (i.e., air, rail, water, and pipeline) combined. Nearly everything we Americans consume-our clothes, our food, our furniture, our appliances-was at some point moved by truck. Moreover, transportation as a whole accounts for nearly 18% of the U.S. gross national product. Hence, governmental policy here, good or bad, has profound implications.

    Consolidation for control has been in the works for many years now. They started by closing off lanes to carriers. Only a few survived. Now shipping lanes are being filled by big corp. They have and will continue to abuse the freedom of the free market. Your fair market is dying, if it is not already dead.
    http://www.driveforfreedomfoundation.org

    Or many of you will be done! There is no more time for pontificating, and slandering each other… there is little time left. You must find the wise and move forward to force collective bargaining. Or the pain and suffering is about get a whole lot worse. And thousands of truckers will let opinion and whether someone who wrote an article, forgot a comma where there should have been a period. Then write them off as not credible.
    Folks that’s Incredible blindness.

    Your fellow Americans need you. We need you, and you need us.

    In closing.

    The time where doing it alone is gone. As the abominations against Good American truckers continues.

    The Obama Administration is getting ready to make the trucking Industry another poster child for his so-called Legacy. Do you really want to sit idle by and let that man and his cronies destroy you with out a fight?

    The time for debate is over. Apathy has killed you. Time to act.
    Godspeed

  • http://www.driveforfreedomfoundation.org Brian Carlson

    http://www.driveforfreedomfoundation.org. Its going to be home to 2 million drivers some day. You want victory you all must have a home base. No fee. Support your fellow drivers. Do not have to have a fee or be a lawyer to be taken seriously. My wife and I and the rest of the members your fellow drivers will be waiting.
    All the best.

  • Scott M. Reed

    Ron I have a meeting with my Congressman if you really wanna help send me an email roger.45801@gmail.com

  • RichieC

    Lets get to the core of the matter……saftey…for the children…….its all about the children…….
    Mass transit needs to replace private automobiles . How do we do this…very simple…1 make any car commuting to work…be required to have every seat full. 2. close all parking lots at all employers turn them into solor energy production…thus eliminating communiting via private vehicle. By this method we have a start to the root saftey problem on our highways….the texting…tired…inattentavive…incompatant 4 wheeler driver and the overcrowding he causes.

  • RichieC

    “ATA has yet to see any evidence that increased insurance minimums will lead to improved highway safety….
    the ATA wants its membership to be able to hire the school drivers…with their 12 weeks of parking lot training.

OverdriveOnline.com strives to maintain an open forum for reader opinions. Click here to read our comment policy.