The U.S. House of Representatives is considering a long-overdue increase in commercial truck insurance requirements, bringing the minimum liability limit up from $750,000 to nearly $5 million.

In H.R. 3781, which was introduced on July 17, 2019, and is co-sponsored by U.S. Representative Matt Cartwright (D-8^th District), U.S. House lawmakers propose to amend the federal law and federal trucking safety regulations for the commercial truck insurance requirements to:

• “[I]ncrease the minimum levels of financial responsibility for transporting property” from $750,000 to $4,923,154.
• “[I]ndex future increases to changes in inflation relating to medical care.”

The bill to increase the commercial truck insurance requirements explains the significant increase in truck liability minimum limits by pointing out that the $750,000 limit, which was set nearly 40 years ago in 1980 and has not been adjusted since, “would have the same purchasing power as $4,923,153.29 in 2019, if the amount was raised to account for medical-cost inflation.”

The official name for H.R. 3781 is the “Improving National Safety by Updating the Required Amount of Insurance Needed by Commercial Motor Vehicles per Event (INSURANCE) Act of 2019.” It has been assigned to the House Transportation and Infrastructure Committee. No action has yet been taken.

As a truck accident attorney, and as the Past-President of the Truck Lawyer Litigation Group for the American Association for Justice, as well as a current member of the Board of Regents for the Academy of Truck Accident Attorneys, I have called for this and supported this action on commercial truck insurance requirements for many years.

Here are the problems with the current, woefully low and inadequate commercial truck insurance requirements :

• The current commercial truck insurance requirements offer a limit that is dangerously inadequate to provide the necessary compensation to truck accident injury victims involved in a serious truck crash.
• Often for many truck crash victims, the current $750,000 minimum limits can be exhausted just paying for the medical bills and hospital bills.
• Also, far too often, the $750,000 is a single limit policy that must then be divided among multiple plaintiffs. It is common for a serious truck accident to involve more than one car. If multiple passengers in multiple cars are all injured from the same truck (such as a driver who falls asleep and plows into a line of cars stopped in traffic), this $750,000 policy has to be split among all the injured parties. As an example, I currently represent a woman who is paralyzed from the chest down after a truck driver smashed into her car, and several others, near Lansing, Michigan. The policy limit that insures that truck and driver must now be divided among several injured plaintiffs. It is a heart-breaking injustice for my client, and for the other people who have also had their lives completely shattered by this negligent driver.  
• This protects trucking companies and truck drivers as well. The current limit risks exposing trucking companies and truckers to excess judgments (i.e., damage awards whose dollar amount exceeds their insurance coverage) which only perpetuates the cycle of unsafe trucking practices, prompting these companies to declare bankruptcy and then reincarnate under new names “chameleon carriers” so they can hide their track record of safety violations.
• The current limit is adding insult to injury for families and victims of preventable truck accident injury and death cases all over the country. It shamefully puts the financial burden of catastrophic and severe truck accident injuries back on the truck accident victims and their families, shifting the burden of long-term medical care to the taxpaying public through Medicaid, rather than on at-fault trucking companies and motor carriers – where it belongs.

What is the federal law on commercial truck insurance requirements?

The federal law on commercial truck insurance requirements was passed by the U.S. Congress which set the mandatory minimum limits for truck liability insurance at $750,000. Specifically, the “Minimum financial responsibility for transporting property” law provides: 

• “The Secretary of Transportation shall prescribe regulations to require minimum levels of financial responsibility sufficient to satisfy liability amounts established by the Secretary covering public liability, property damage, and environmental restoration for the transportation of property by motor carrier or motor private carrier (as such terms are defined in section 13102 of this title) in the United States between a place in a State and (A) a place in another State; (B) another place in the same State through a place outside of that State; or (C) a place outside the United States.” (49 U.S. Code Section 31139(b)(1))
• “The level of financial responsibility established under paragraph (1) of this subsection shall be at least $750,000.” (49 U.S. Code Section 31139(b)(2))

What does the FMCSA say about commercial truck insurance requirements?

The Federal Motor Carrier Safety Administration (FMCSA), whose “primary mission . . . is to reduce crashes, injuries and fatalities involving large trucks,” has enacted safety regulations regarding trucks’ financial responsibility that mirror the commercial truck insurance requirements provided by the federal law. Specifically, the FMCSA’s rule provide: 

• Trucking companies, trucks and motor carriers engaged in the commercial transportation of property must have “minimum levels of financial responsibility” that provide at least $750,000 in public liability. (49 CFR Part 387.9)
• “No motor carrier shall operate a motor vehicle until the motor carrier has obtained and has in effect the minimum levels of financial responsibility as set forth in §387.9 of this subpart,” i.e., $750,000 in public liability. (49 CFR Part 387.7)

What have the truck safety experts said about the existing commercial truck insurance requirements?

Here is what the FMCSA said about the commercial truck insurance requirements in 2013:

• Costs for severe and critical injuries resulting from truck crashes can easily exceed $1 million.
• Due to rapid and ongoing increases in medical costs, the current truck liability limits are not adequately covering truck-related catastrophic injuries. 

(Source: FMCSA, “Financial Responsibility Requirements for Commercial Motor Vehicles,” January 2013) 

Here is what the FMCSA said about the commercial truck insurance requirements in 2014: 

• “When catastrophic and severe/critical injury crashes [involving commercial motor vehicles] do occur, the costs of resulting property damage, injuries, and fatalities, can far exceed the minimum levels of financial responsibility.”
• “Over the past 29 years, while insurance premiums have declined, the decreasing real value of the current minimum levels has effectively removed the function of insurance in covering catastrophic crashes, as medical and other crash-related costs have increased significantly.”
• “The legislative history of the Federal minimum insurance requirements strongly suggests that Congress recognized that crash costs would change and that DOT would regularly examine the levels and make adjustments as necessary.”
• “In conclusion, FMCSA has determined that the current financial responsibility minimums are inadequate to fully cover the costs of some crashes in light of increased medical costs and revised value of statistical life estimates.”
• In a report examining the “appropriateness and effectiveness of current minimum levels of financial responsibility for motor carriers of property,” the Pacific Institute for Research and Evaluation (PIRE) concluded that “the current minimum level of $750,000” is “too low.” Given that the range “for liability awards in large truck crashes involving death or catastrophic injury is $9-10 million (in 2012 dollars),” PIRE “recommended that DOT set a policy limit per crash of at least $10 million and index for inflation …” 
• Based on a March 2013 analysis of “crash settlement data,” the Trucking Alliance concluded that “the current $750,000 of insurance required of many motor carriers is inadequate to cover the costs of many crashes.” Additionally, the Trucking Alliance’s analysis determined that “42 percent of the trucking companies’ monetary exposure from these settlements would have exceeded their insurance coverage, if all companies in the study had maintained the minimum $750,000 insurance requirement.”

(Source: FMCSA, “Examining the Appropriateness of the Current Financial Responsibility and Security Requirements for Motor Carriers, Brokers, and Freight Forwarders – Report to Congress,” April 2014)

Here is what the FMCSA said about the commercial truck insurance requirements in 2018:

• “The conclusion of these reports that current insurance limits do not adequately cover catastrophic crash costs has not changed.”

(Source: FMCSA, “Motor Carrier Financial Responsibility Report to Congress,” March 2018).