In the Federal Motor Carrier Safety Administration’s latest report to Congress regarding the appropriateness of current financial responsibility requirements for motor carriers, the agency said it doesn’t have access to enough data.
Therefore, FMCSA's ability to provide “a thorough assessment of motor carrier financial responsibility requirements is limited,” the agency said.
Specifically for motor carriers, FMCSA was looking at the $750,000 liability insurance minimum for those hauling general freight. That minimum is higher, of course, for hazmat carriers.
In its new report, FMCSA acknowledged that “in the rare instances that fatal and severe/critical injury crashes do occur, the costs of resulting property damage, injuries, and fatalities can exceed the minimum levels of financial responsibility.”
At the same time, however, the agency said much of the information it would need to look at the adequacy of current insurance minimums “is not available, as many lawsuits are settled out of court and are subject to non-disclosure agreements.” Additionally, “insurance company information is largely proprietary," FMCSA added.
[Related: How to navigate the trucking insurance market to save at renewal]
As a result, FMCSA said it can only offer a limited assessment of the appropriateness of the motor carrier financial responsibility requirements.
“To assess the sufficiency of the financial responsibility requirements, FMCSA would need access to more detailed information from the insurance industry, including anonymized claims data at the person-level,” the agency said. “To date, efforts to obtain this information under existing legal authorities and through requests for voluntary disclosure have been unsuccessful.”
A table in FMCSA’s report shows that the $750,000 minimum established in 1985 falls well short of Consumer Price Index-adjusted levels. The core CPI-adjusted level for general freight coverage is approximately $2.2 million in 2024 dollars, while the medical CPI-adjusted level is approximately $3.7 million in 2024 dollars.
FMCSA’s report highlighted several studies, including a 2013 study by the Department of Transportation’s John A. Volpe National Transportation Systems Center and several external studies, but noted that “most of the published reports and publicly available data sources on the adequacy of current minimum insurance levels are not subject to frequent revisions,” adding that “there is limited new information or analysis for FMCSA to consider beyond what has been presented in previous reports and studies on this topic.”
FMCSA made a similar report to Congress in 2022, citing a lack of transparency from the insurance industry as to why it had yet to move toward an insurance requirement increase.
[Related: Congress again eyes massive trucking insurance hike]
Congress, in the MAP-21 highway funding legislation in 2012, required a report from FMCSA every four years beginning in 2013 to determine the appropriateness of financial responsibility requirements. The 2015 FAST Act highway bill expanded that by requiring FMCSA to consider certain factors before issuing a final rule that would increase motor carrier financial responsibility, including:
- The rule's potential impact on motor vehicle safety and the motor carrier industry
- The ability of the insurance industry to cover revised financial responsibility requirements
- The extent the current minimums adequately cover medical care, compensation, and other identifiable costs
- The frequency with which insurance claims exceed the current minimums in fatal accidents
- The impact on motor carrier safety and accident reduction of increased levels
Numerous attempts have been made in Congress to increase carriers’ liability insurance minimums, tie them to inflation and more, but none have made it into law.
[Related: Questions surround liability insurance hike in New Jersey]
