This week the FMCSA announced that it has withdrawn its proposed rulemaking which could have called for an increase in carrier liability insurance.
That’s good news for both carriers and brokers, because a steep increase in insurance premiums would have added extra costs at a time when many carriers are wondering how they’re gone to pay for electronic logging devices required by December 18. Those added costs could have pushed many small carriers out of the business and reduced overall capacity.
Increase could have been significant
Although the FMCSA’s Advance Notice of Proposed Rulemaking—issued Nov. 28, 2014—did not recommend a specific dollar amount, observers speculated that increases could have been significant. The FMCSA noted that if the $750,000 liability insurance minimum set in the 1980s had kept pace with inflation, it would be $1.6 million today. Insurance premium increases hit carriers especially hard because they have to purchase insurance for each truck, rather than for the overall business.
In its announcement, the FMCSA gave only a brief reason for the withdrawal of its Advance Notice of Proposed Rulemaking (ANPRM):
“In the ANPRM, FMCSA sought public comment on whether to exercise its discretion to increase the minimum levels of financial responsibility, and, if so, to what levels. After reviewing all public comments to the ANPRM, FMCSA has determined that it has insufficient data or information to support moving forward with a rulemaking proposal, at this time.”