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DOT Report Calls for Higher Minimum Motor Carrier Limits; Market Impact Examined

A DOT report says minimum liability limits for motor carriers are insufficient to cover the costs of rare but catastrophic crashes. What would raising the minimum limits do to pricing and claims activity for commercial motor vehicle risks?

By Phil Gusman | Updated on May 28, 2014
Flames engulf a tractor-trailer and tour bus after they collided near Orland, Calif. on Apr. 10, 2014, killing 10. (AP Photo)

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.

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