FMCSA Feeling Pressure To Increase Minimum Requirements
There is increasing pressure on the Federal Motor Carrier Safety Administration (FMCSA) from trial attorneys and large trucking companies to increase the minimum insurance requirements for cargo trucks. Conversely, the insurance industry believes the industry would be better served if the market place were allowed to adjust the rates and is concerned that increasing the minimum requirements would increase rates and force insurers to reallocate scarce capacity.
The minimum insurance for cargo trucks has remained stagnant since the $750,000 level was established in 1980, when the industry was deregulated. As the governing body the FMCSA, has autarchic authority to raise the standard. Section 32104 of the “Moving Ahead for Progress in the 21,Century Act of 2012” or MAP-21, promulgated that the Agency shall review and issue a report to Congress on the appropriateness of the current minimum financial responsibility requirements.
The first report was due six months after the date of enactment (October 1, 2012) on March 1, 2013, but has been delayed by the Agency. Agency officials have announced that the report will be released by the end of the year. After the initial report, the Agency must review and report every four years.
A recent report conducted by the Alliance for Driver Safety and Security, Inc., further provides evidence that there is need for an examination of the minimum financial requirements. The report found that forty two percent of the dollar settlements paid by trucking companies exceeded the minimum financial requirements. The percentage falls to 37.5% for a $1 million limit, 31.7% for a $1.5 million limit, and 27.6% for a $2 million limit. The study examined 8,692 accident settlements between 2005 and 2011.