A proposal that could eventually lead to higher insurance requirements for trucking companies is close to publication. An advanced notice of the proposal is under review by the White House Office of Management and Budget and can be expected to show up in the Federal Register this year.
Acting under instructions from Congress, the Federal Motor Carrier Safety Administration plans to update insurance requirements that have been in place for almost 30 years.
In 1985 the Department of Transportation (FMCSA did not exist then) set minimums of $750,000 for general freight, $5 million for the most dangerous hazmats and $1 million for other hazmats.
In 2012 Congress considered telling the agency to raise the general freight minimum to $1 million, but it ultimately told the agency to prepare an analysis that could become the basis for a new standard.
In its analysis the agency found that the minimums need to be reevaluated due to increasing medical costs and changing statistical life estimates. It is considering a range of numbers, but one option would be to peg the minimums to the Consumer Price Index.
If that happens, the general freight requirement would jump to $1.6 million, dangerous hazmats would go to $10.8 million and other hazmats would go to $2.2 million.
Transportation interests take varied and conflicting positions on the issue.
The agency asked an advisory panel of carriers, owner-operators, enforcement officials, bus companies and safety advocates for suggestions on how to proceed, and this week the panel came back with a five-page list.
At a meeting Tuesday in Alexandria, Va., the Motor Carrier Safety Advisory Committee said the agency needs more information about the costs of insurance and claims, the impact of insurance costs on small carriers, and the frequency of catastrophic claims.
The agency is focusing on which index the minimum should be pegged to, and how to account for the wide gap between ordinary claims and the rare catastrophic claim.
American Trucking Associations is concerned that a minimum that includes the highest claims would be too expensive.
The Owner-Operator Independent Drivers Association contends that insurance minimums do not correspond to safety.
Advocates for Highway and Auto Safety noted that insurance is not just a way to influence safety behavior – it also determines who pays for injuries.
The agency is a long way from making any changes. It will take comments on this advanced notice and then complete the research it needs to craft a proposal. That proposal will have to go through the same notice-and-comment process before the agency can post a final rule.
Meanwhile, Congress has a bill that would force the agency to stop work on this issue. The bill has not advanced but it is a signal that there is significant opposition to any changes.