The Federal Motor Carrier Safety Administration (FMCSA), a U.S. Department of Transportation division that regulates interstate trucking, is considering making commercial trucking companies raise the minimum amount of insurance coverage they must have as interstate carriers.
The $750,000 minimum insurance under federal law has not changed in 30 years. However, most truckers actually carry liability policies of $1 million, according to the trucking and insurance industries.
Responding to a section of a 2012 federal transportation bill passed by Congress, the FMCSA in November asked the public whether the $750,000 minimum liability insurance for trucks is sufficient. By the close of the comment period on Feb. 26, more than 2,100 comments had been submitted—mainly from truck owners or operators and attorneys.
Prime Property & Casualty Insurance Company comments
Any increase "beyond the $1 million set by the market will needlessly result in increased premiums and safe motor carriers going out of business," said a letter to the FMCSA from Prime Property & Casualty Insurance Inc., a Chicago-based firm. According to Prime, an increase will not fulfill the goal of ensuring that members of the public are protected from truck-involved accidents. But it is estimated that such an increase will cost motor carriers approximately 60% to 70% more in premiums.
"Rather than increasing coverage beyond that amount and causing harm to thousands of small businesses and increasing costs to consumers, the FMCSA should consider a compensation fund to address the rare (less than 1%) catastrophic claim," the insurer said. "The current minimum financial requirements for motor carriers are not out of date and provide the public with adequate protection from potentially uncompensated losses resulting from truck-involved accidents."
Truckers opposing an increase say that higher insurance premiums, not judgments, are what will force them off the road. The comments show a lack of consensus on just how high premiums would go. But numerous truckers say it would hurt them—and help the trial lawyers.
The FMCSA will review the comments and decide how to proceed, although it has set no deadline by which to issue the regulations.
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