The Federal Motor Carrier Safety Administration has made the work it is doing on producing a rule that will raise the minimum amount of liability insurance for carriers top priority. This is according to a report issued to the United States Department of Transportation this week, which notes that the FMCSA has moved up the date to publish the proposed rule to September 19th (up from November).

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The FMCSA initially announced their intention to pursue this rule in April, when a study was published that noted the $750,000 minimum that was set in 1985 is too low and will not “adequately cover catastrophic crashes” today. The publication also cited inflation and higher medical costs as adding to the need to increase the minimum amount. The report notes that if minimum liability insurance had kept up with the core consumer price index (also known as CPI, which is a measure of inflation) it would be at $1.62 million. Additionally, if it had kept pace with the medical consumer price index, the minimum would be to the tune of $3.18 million.

However, both the OOIDA and the American Trucking Association assert that the current minimum does not need changing. They base these claims on studies that indicate that just 1% of all crashes exceed $750,000 in claims. They also contend that this will drive up business costs and put an extra strain on smaller trucking companies.

The Administration has formed a rule-making team to determine what the minimum liability insurance level should be, but there is as of yet, no indication of what the proposed increase amount will be. Many believe that based on the last increase in ’84 where the minimum was increased by $250,000, the new minimum will be set at $1 million. While most carrier companies currently have $1 million in coverage, the public will have to wait until September in order to hear the ultimate dollar figure that the Administration comes up with, and then the timeline for the long process that will follow in order to attempt to put the proposed rule into law.

So until then, as with the finalization of many other regulations, we wait…

 

What you need to know about FMCSA’s proposal to raise carrier liability insurance minimums was last modified: by