Current required minimum liability limits for motor carriers are insufficient to cover the costs of rare but catastrophic crashes, the Federal Motor Carrier Safety Administration (FMCSA) says, adding that it plans to develop a proposed rule to address the issue.
Industry observers acknowledge that catastrophic crashes can and do exceed current minimum limits, but wonder about the impact on rates and claims payments should those limits be raised. For its part, the FMCSA says its study did not assess potential premium increases as a regulatory cost, noting the lack of available information on underwriting and pricing practices from both insurers and motor carrier risk managers.
The study, released last month, was conducted in accordance with the Moving Ahead for Progress in the 21st Century Act (MAP-21), which President Obama signed into law July 6, 2012. The act directed the Department of Transportation secretary to issue a report to Congress on the "appropriateness of the current minimum financial-responsibility requirements for motor carriers of property and passengers…," which the secretary delegated to the FMCSA.
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