Insurance Regulations For Transport Vehicles

There are certain simple requirements laid down by the Federal Motor Carrier Safety Administration regarding insurance requirements for transport vehicles. To get an Operating Authority (MC number), carriers are required to have public liability insurance, which includes coverage for property damage as well as bodily injury.

Public Liability Insurance: This is one of the most important insurance coverage for truck drivers as it covers them and others in case of an accident, where the driver is at fault. The property damage part of the coverage is to pay for repairs and damages done to the vehicle and any other property, while the bodily injury part helps in compensating for hospital bills of the victims of the accident.

In order to transport passengers or goods, and work as the for-hire carriers, companies are required to get an authority to operate for interstate commerce. This operating authority is determined and granted by FMCSA, depending on the following:

Motor Carrier of Property:

• For-hire motor carriers transporting commodities for the general public
• Must not transport household goods
• File proof of public liability insurance with FMCA
• Cargo Insurance is not required

A Motor carrier of Household Goods:

• For-hire motor carriers transporting household goods (moving companies)
• Household goods include personal items, goods shipped from stores or factories
• File proof of public liability insurance with FMCA
• Cargo insurance is required

Broker of Property:

• Individual, partnerships or companies that arrange for the transport of goods
• Must not transport household goods
• No ownership, hence no responsibility towards property

Broker of Household Goods:

• Individual, partnerships or companies that arrange for transport of household goods
• No ownership, hence no responsibility towards property
• Under certain conditions relating to services provided by the motor carriers, companies are required to register as a household goods broker.

United States-based Enterprise Carrier of International Cargo:

• Transportation of international cargo, except household goods
• Headquarters in US, owned/controlled by Mexican citizen or resident alien
• Cargo either arriving or dispatched from foreign country

United States-based Enterprise Carrier of International Household Goods:

• Transportation of international household goods
• Headquarters in the US, owned/controlled by a Mexican citizen or resident alien
• Cargo either arriving or dispatched from a foreign country
• Household goods include personal items, goods shipped from stores or factories

Once the Operating Authority is established, motor carriers are required to get coverage and submit proof to FMCSA. Also, there are certain regulations regarding the minimum limit of coverage, as decided by FMCSA:

Type of Freight	Minimum Limit of Coverage
Non-hazardous freight moved in vehicles weighing 10000lbs or less	$300,000
Non-hazardous freight in vehicles weighing more than 10000lbs	$750,000
Oil moved by For-Hire & Private Carriers	$1,000,000
Other Hazardous material moved by for-Hire or Private Carriers	$5,000,000

Other Coverage: Apart from the above, household goods motor carrier and freight forwarders are also required to have cargo insurance of at least $5,000 for each vehicle and $10,000 per occurrence. Freight forwarders, as well as Brokers of Freight, are required to have both – a Surety Bond of $75,000 and Trust Fund Agreement of $75,000.

Motor Carrier companies are also required to designate a Service Process Agent, to act as a representative of the company for proceeding brought against the motor carrier, broker or freight forwarder.

The above-mentioned requirements by FMCSA are in place to ensure that in case of accidents, any damage to property or people is taken care of, and thus must be strictly complied with. Also, a commercial transport vehicle will not be allotted a USDOT number by FMCSA unless all the insurance requirements are fulfilled. Motor Carrier companies are required to furnish proof of appropriate and mandated coverage in order to operate in the United States.