Higher Liability Limits Needed, Says DOT Report
The US Federal Motor Carrier Safety Administration (FMCSA) has recently stated that current required minimum liability limits for motor carriers are insufficient to cover the costs of rare but catastrophic crashes, and the FMCSA plans to develop a proposed rule to address the issue.
The current required US minimum liability limits were established in the 1980s, and by 1985 limits for motor carriers of property (freight) were set at:
- $750,000 for the transportation of property
- $5 million for the transportation of certain hazardous materials
- $1 million for the transportation of other hazardous materials
For motor carriers of passengers, minimum limits were set at:
- $5 million for vehicles with a seating capacity of 16 or more passengers
- $1.5 million for vehicles with a seating capacity of 15 or fewer
These limits are adequate in most cases; the FMCSA study says catastrophic crashes resulting in injury, death and/or property damages that breach the current minimum limits constitute less than 1% of all commercial motor-vehicle crashes. But the few catastrophic and severe/critical injury crashes that do occur “can far exceed the minimum levels of financial responsibility", the FMCSA says.
The FMCSA has formed a rulemaking team to evaluate what the appropriate level of financial responsibility should be for the motor-carrier industry. The next step, the study says, will be to meet with stakeholders and develop a proposed rule.What Congress will do after that is unclear.
For more information about this development, please see DOT Report Calls for Higher Minimum Motor Carrier Limits by Phil Gusman, PropertyCasualty360 (May 28, 2014).
Tia Chisholm, HUB International TRANSPORTATION
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