FMCSA Debates Commercial Vehicle Insurance Minimums…Including Limos

 

The medical consumer price index inflation rates would make the inflation-adjusted levels of financial responsibility significantly higher for carriers of 15 or fewer passengers.

In April 2014, the Federal Motor Carrier Safety Administration (FMCSA) released a report examining the appropriateness of the current laws regarding minimum financial responsibility requirements for motor carriers of property and passengers, including insurance requirements. The new report to Congress cites several recent studies indicating that inflation has greatly increased medical claims costs and related expenses, and FMCSA has determined that the current financial responsibility minimums for the different transportation sectors are due for reevaluation. The current minimum financial responsibilities for passenger carriers have been in effect since November 19, 1985.

For passenger transportation vehicles, the study focused primarily on the areas regarding the number of passengers (1-8, 9-15 and 16+) and the type of vehicle (motorcoach, school bus, minibus, passenger van and limousine). The current minimum financial responsibility levels are: $5 million for carriers operating vehicles with a seating capacity of 16 or more passengers, and $1.5 million for carriers operating vehicles with a seating capacity of 15 or fewer passengers.  The industry consists largely of small companies operating 6 or fewer vehicles, totaling more than 75% of the nation’s passenger carriers.

According to FMCSA, the study’s findings have provided preliminary support for increasing the current levels of financial responsibility for passenger carriers. The medical consumer price index has outpaced overall inflation rates by 4.9% annually, which would make the inflation-adjusted levels of financial responsibility significantly higher for carriers of 15 or fewer passengers – from the current $1.5 million to over $6.3 million. 

The Agency has formed a rulemaking team to further evaluate the appropriate level of financial responsibility for motor carriers, and has placed this rulemaking among the Agency’s high priority rules. FMCSA will continue to meet with stakeholders as it moves forward with developing a proposed rule for this issue.   

LimoDirect offers limo liability insurance, limo physical damage insurance and limo general liability insurance while providing superior coverage & claims service.