House Passes Amendment to Avoid Increases in Minimum Insurance Coverage for Motor Carriers

The U.S. House of Representatives narrowly passed an amendment to the Transportation, Housing and Urban Development Appropriations bill that prohibits FMCSA from using funds to increase insurance rates for motor carriers, which have not changed for three decades.


Reps. Steve Daines (R-MT) and Sam Graves (R-MO) introduced the amendment to disallow the use of any funds made available by the final THUD bill for fiscal year 2015 to "develop, issue or implement regulations that increase levels of minimum financial responsibility for transporting passengers or property." It passed a House vote Tuesday afternoon by a 214-212 margin.

For-hire, commercial motor carriers transporting passengers in interstate commerce must comply with the coverage minimum, but school buses that transport students to and from school are exempt from the federal requirement. States generally govern the minimum amount of school bus insurance coverage required of public school districts.

MAP-21, the current transportation reauthorization bill signed into law by President Obama in July 2012, directs the FMCSA to review these minimum insurance rates that have not been raised since Nov. 19, 1985. 49 CFR 387.33 requires vehicles with seating capacities of 16 passengers or more to have at least $5 million in coverage. It requires vehicles with seating capacities of 15 passengers or less need to have coverage of at least $1.5 million.

Despite finding that fewer than 0.02 percent of truck–involved crashes result in damages that exceed current coverage requirements, the FMCSA announced this spring that it was moving ahead with plans to increase these minimum insurance requirements for private truck and bus companies. The FMCSA study did not include data for passenger carriers or about the impact of increases on the insurance industry.

"Given the school bus industry's sterling safety record year after year and being the safest of all modes of transportation according to DOT's own statistics, NSTA does not believe an increase in minimum insurance limits is warranted," commented Tim Flood, president of the National School Transportation Association. "The amendment offered by Congressmen Daines and Graves, when enacted into law, will stop the Administration's pursuit of massive increases that would be very damaging to the industry and potentially decrease safety by reducing the availability of school bus service across the nation."

A transportation coalition consisting of NSTA, the United Motorcoach Association, the American Bus Association and the Owner-Operator Independent Drivers Association opposed the raising of rates that they said would increase costs by up to 60 percent for buses and 500 percent for trucks. This, association officials added, could equate to premiums of thousands of dollars more per vehicle per fleet before they could go into operation.

NSTA and the other associations promoted to their members a letter-writing campaign to congressional representatives. The associations said the rate increases could put as many as 40 percent of commercial motor vehicle companies out of business, with single truck and bus owners being impacted the most because higher operating costs lead to less take-home pay.


Last modified onWednesday, 11 June 2014 15:49