Truck Insurance Minimums: The Debate and Why It Matters to You
Federal law has required interstate trucking companies to carry at least $750,000 in liability coverage since 1980, and that number has never been raised. Whatever you think it was worth then, it buys a fraction of that today, and the argument about changing it has been running for more than a decade. If you are shipping a vehicle, this is not an abstract policy fight. It is the reason to ask what your carrier actually carries.
Where the Minimum Came From
The $750,000 figure was set by Congress in the Motor Carrier Act of 1980 and applies to for-hire interstate carriers moving general freight. Higher minimums apply to some hazardous materials and to passenger carriers.
It was never indexed to inflation. That single omission is the whole argument, because medical costs and legal settlements have moved a very long way since 1980 while the floor has not moved at all.
Regulators have looked at raising it more than once. Proposals have been floated, studied and shelved, and the minimum stands where it did. Confirm the current requirement with the Federal Motor Carrier Safety Administration rather than assuming, because this is an area where the rules could change.
The Case for Raising It
Safety advocates and plaintiff attorneys argue that the floor no longer covers the harm a serious truck crash causes.
A multi-vehicle accident with severe injuries can produce costs well beyond $750,000, and when coverage runs out the shortfall falls on the injured party, on their own insurers, or on a carrier that may simply not have the assets. In practice a small carrier facing a judgment beyond its policy limit frequently ceases to exist rather than paying.
The argument continues that an inadequate floor also distorts competition, because a carrier operating at the minimum has lower costs than one carrying realistic coverage, and undercuts it on price.
The Case Against
Small carriers and owner-operators argue that higher minimums would push them out of the industry, and the concern is not theoretical.
The trucking industry is dominated by very small operations. A large share of carriers run a handful of trucks, and insurance is already one of their heaviest fixed costs. A substantial increase in the required limit raises premiums for exactly the operators with the least ability to absorb it.
Their argument is also that the vast majority of claims settle well within the current limit, so raising the floor would impose a large cost across the whole industry to address a small number of catastrophic cases. Whether that is a good trade is precisely what the debate is about.
Why the Number Has Not Moved
It is worth understanding why a figure everybody agrees is dated has survived this long, because it explains why it will probably survive a while longer.
Raising it requires either Congress or a completed federal rulemaking, and both routes have stalled repeatedly. A rulemaking has to be justified with a cost-benefit analysis, and the data needed to show how often claims actually exceed the limit is held by private insurers rather than by regulators. Studies have concluded that the evidence was insufficient rather than that the limit was adequate, which is a different finding than it sounds.
Meanwhile the industry’s own economics have moved on without the rule. Many shippers and brokers now require far more coverage contractually than the federal floor demands, so a carrier hauling for a large customer frequently carries well above the minimum regardless. In that sense the market has partly routed around the regulation, which reduces the pressure to change it.
What This Means for Your Vehicle
Here is the part that matters practically, and it is a distinction most people get wrong.
Liability coverage is not what protects your car. Liability covers injury and damage the truck causes to other people. What covers the vehicle on the trailer is cargo insurance, and that is a separate policy with its own limit, and it is not set by the federal minimum at all.
Cargo limits vary enormously between carriers. A limit that is generous for a trailer of ordinary sedans can be well short of the value of a single collector car. And the limit is frequently per incident rather than per vehicle, which means a loaded trailer in a serious accident can exhaust it.
So the question to ask is not whether the carrier meets the federal liability minimum. It is what the cargo policy limit is, and whether your vehicle’s value fits inside it comfortably.
The Questions Worth Asking
Ask for the certificate of insurance rather than a verbal assurance. It names the insurer, the policy period and the limits.
Ask what the cargo limit is and whether it is per vehicle or per incident. Ask what the deductible is and who pays it, because on some policies that falls to the customer. Ask what is excluded, since acts of nature, road debris and personal items left in the vehicle commonly are.
Then check the carrier’s authority and safety record through the Federal Motor Carrier Safety Administration’s public system. An active operating authority and a clean inspection history tell you more about risk than any policy limit does.
Where Enclosed Transport Fits
If your vehicle is worth more than a typical cargo limit comfortably covers, the answer is partly insurance and partly the trailer.
Enclosed carriers generally carry higher cargo limits, because the vehicles they move are worth more, and the trailer itself removes several of the exposures a policy would not have paid for anyway. On a genuinely valuable car, that combination is worth more than the price difference.
For anything at the very top end, ask your own insurer about coverage while the vehicle is in transit. Our guide to what car shipping insurance actually covers works through the detail.
Common Questions
What is the federal minimum? $750,000 in liability coverage for most for-hire interstate carriers, set in 1980 and never indexed to inflation.
Does that protect my car? No. Liability covers harm the truck causes to others. Your vehicle is covered by the carrier’s separate cargo policy.
What should I actually ask? For the certificate of insurance, the cargo limit, whether it is per vehicle or per incident, the deductible and the exclusions.
Why do small carriers oppose higher minimums? Insurance is already one of their largest fixed costs, and most carriers run only a few trucks.
Is enclosed transport better insured? Generally yes, because enclosed carriers move higher value vehicles and carry higher cargo limits to match.
Get a Quote
Call Ship A Car, Inc. at (866) 821-4555 with both zip codes, your date range and the value of the vehicle, or price the move with the instant calculator.
