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  • Increased Regulations Regarding Commercial Vehicles (18-Wheelers, Semi-trucks, etc)

Increased Regulations Regarding Commercial Vehicles (18-Wheelers, Semi-trucks, etc)

In 1980, Congress deregulated the trucking industry, counting on the insurance industry to make sure that trucking companies regulated themselves when it came to safety. The government did set minimum insurance levels. Here is a quote from the 1980 Motor Carrier Act:

To protect against any potential impairment to safety, arguments were made that some precautions should be taken to require higher financial responsibilities for motor carriers…. Thus, the action of the Committee in increasing financial responsibility is to encourage carriers to engage in practices and procedures that will enhance the safety of their equipment so as to offer the best protection to the public.


The carrier who wants to maintain high safety levels will be under pressure to cut his costs to meet his competitors, some of which may cut costs by operating in violation of minimum safety standards. Specifying minimum insurance levels is one way to help improve motor carrier safety. Insurance companies are equipped to evaluate the performance of the motor carriers. The premiums they assess are in direct relation to the risks they assume. Therefore, an unsafe carrier will have an increased premium and a totally unsafe carrier may not be able to obtain the insurance necessary to operate, or at best will be at an insurance cost disadvantage.

The biggest insurance cost to motor carriers is for “public liability” insurance. That is insurance that covers bodily injury, damage to property and environmental restoration. The minimum levels of this insurance include coverage for freight and coverage for passengers.

For freight, motor carriers have to carry coverage for $750,000 - 5 million dollars depending on what’s being transported, and $300,000 for non-hazardous freight carried in vehicles weighing less than 10,001 lbs.

For motor carriers with passengers, the minimum levels are 5 million dollars, or 1.5 million dollars for those running only vehicles that seat 15 or fewer passengers.

For motor carriers and freight forwarders of household goods, cargo insurance is set at $5,000 per vehicle and $10,000 per occurrence.

These minimum amounts are the same today as when the law was passed, 36 years ago. Two things should catch your attention right away. First, there’s inflation. The intent of the 1980 Act was to set the $750,000 coverage as the absolute minimum, in terms of 1980 prices.

Second, because the deregulation of the trucking industry led to an increase in the difference in size and weight between trucks and cars, accidents involving trucks cause more damage today than they did in 1980. With the 1980 deregulation, for instance, semi-trailers were allowed to expand in length from 48' to 53'. Trucks are also now allowed to weigh in at 80,000 lbs.

Deregulation of the trucking industry has made our roads much more dangerous than they were in 1980. If you’ve been in an accident with a truck, or if you have any questions about the law governing trucking, call Justinian and Associates today.

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