Set on a fast-paced schedule, the Federal Motor Carrier Safety Administration launched on Wednesday, Oct. 1, an advanced notice of proposed rulemaking that lays out the agency’s consideration to seek increased minimum insurance required of motor carriers.
The agency submitted the ANPRM to the Office of Management and Budget on Oct. 1 – a day later than the agency projected. However, FMCSA projects the advanced notice will clear OMB on Oct. 12 and to publish in the Federal Register on Oct. 22. That’s a pace far faster than the typical 30- to 60-day time period allotted for OMB review.
While the abstract of the ANPRM at OMB is void of any information, the agency has been toying with the idea of raising the minimum insurance requirements since earlier in the year when it released a report on financial responsibility.
In the report the agency noted that the current minimum insurance requirements of $750,000 for general freight and $1 million for hazmat were set in 1985. The report states that minimum insurance for general freight coverage would be $1.7 million now factoring in the cost of medical inflation, based on the medical consumer price index.
In the agency’s report on significant rulemakings, the agency did not matter of factly state it was seeking to raise the minimum insurance levels. Rather the agency reports it is “considering” a rulemaking.
“The FMCSA announces that it is considering a rulemaking to increase the minimum levels of financial responsibility for motor carriers, including liability coverage for bodily injury or property damage in the case of freight and passenger motor carriers,” the report states.
The Owner-Operator Independent Drivers Association has been opposed to raising the minimum insurance levels and to the way some of the conclusions were reached in a recent report being used by the agency to justify an increase.
The report does confirm that the number of crashes costing more than the current $750,000 minimum liability insurance for interstate operations is very small, a stance that OOIDA has taken since the first mention of increasing insurance minimums was raised.
OOIDA Director of Government Affairs Ryan Bowley points out that a footnote to the study used as the basis for the report says that approximately 74 crashes per year occur that are above the minimum level. However, the study conducted by Volpe National Transportation Systems Center did not consider fault in the crashes studied.
Bowley points out that between 75 and 85 percent of crashes – depending on what research you use – are the fault of the passenger car driver. That would drive the number of truck driver-responsible crashes to fewer than 20.
“Even though the agency’s report confirms that fewer than 1 percent of all truck-involved accidents result in injuries or property damage that exceed current insurance requirements, it seems pretty clear they plan to raise those requirements anyway,” said Todd Spencer, OOIDA executive vice president, after the report was first released in May.
The agency seems to be bowing to the economic objectives of the personal injury attorneys and mega-trucking companies who have been campaigning for higher insurance requirements,” Spencer said. “Trial lawyers will see windfall payouts in the increases, and big trucking companies – who already use special exceptions in the law to avoid buying insurance on the open market – see an opportunity to drive up business costs and do away with their small-business competitors.”
Spencer points to the core mission of FMCSA – highway safety. “The amount of insurance carried by motor carriers has never been shown to have a correlation with safety.”
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