Fleet insurance can be challenging to follow and understand. It’s an ever-changing space, but your business relies on it to function. Not only is fleet insurance a federal and state requirement, but it also protects your business in the event of an accident. Your fleet can invest in all kinds of coverage options and plans, but most fleets are looking to save money wherever possible. Unfortunately, premiums may increase in 2022 due to the reintroduction of a bill that raises the minimum insurance requirement. We will discuss this in more detail below.
History of the Minimum Insurance Requirement
The minimum insurance requirement for motor carriers has been $750,000 since 1980 when Congress established a limit to “ensure public safety and to measure the financial fitness and responsibility of a motor carrier company entering the business.” However, the FMCSA has argued that insurance minimums have not kept up with the cost of living rising and the per capita expenditure rising. They proposed raising the minimum in 2014 but had to withdraw the proposal in 2017.
The Reintroduction of the Minimum Insurance Requirement Increase
When the FMCSA withdrew its proposal, the drive for the increase did not go away. Truck safety advocates from 26 states and Washington D.C. created the Truck Safety Coalition. The group sent a letter to the U.S. House Committee on Transportation and Infrastructure, requesting they pass the legislation. This legislation is widely supported by organizations such as Parents Against Tired Truckers, the American Association for Justice, Citizens for Reliable and Safe Highways, the Institute for Safer Trucking, and Road Safe America. They argue that it will keep roads safer as drivers will be held accountable for their actions.
Opposition to the Minimum Insurance Requirement Increase
Those who oppose this increase include the Owner-Operator Independent Drivers Association, who argue that it would increase insurance premiums for small-business truckers. They also claim that there is not a correlation between insurance coverage and highway safety. According to the OOIDA, insurance companies have already adjusted their coverage above the required 750,000 based on market conditions.
How Much Would Premiums Increase?
The proposal is to increase the insurance minimum from $750,000 to $2,000,000. The FMCSA says it cannot calculate exactly how much premiums would rise based on this change, but the OOIDA estimates that premiums may double as a result. For example, a trucker who pays $10,000 a year may have to pay up to $20,000.
Learn More About Fleet Insurance
If you have more questions regarding fleet insurance, we have plenty of blog posts to help you out. Our glossary entry on fleet insurance goes over all of the basics. Also, check out our articles, “How Does Fleet Insurance Work?” and “How to Save Money on Fleet Insurance in 2022,” for more details on how fleet insurance works and how you can save on your premiums.