Potential Applicability of Financial 

Responsibility Requirements to Private 

Motor Carriers 

Final Report 

March 2006 
Foreword 

The primary benefit associated with the expanded insurance requirements examined in this study 

stems from avoiding the high costs of crashes involving unsafe private carriers that would find it 

difficult or impossible to obtain public liability coverage at the new, higher levels. Estimated 

costs for insurance and reporting exceed estimated benefits in 26 of the 27 scenarios considered 

in this study, indicating that extending the current minimum financial responsibility requirements 

for for-hire motor carriers to private motor carriers is not cost-beneficial under the assumptions 

used. However, the financial responsibility requirements examined within this study may be 

justifiable given equity considerations. 

Although the report can be helpful to the general public in understanding brake inspection and 

certification, the report is primarily targeted towards private motor carriers. 

This publication is considered a final report and does not supersede another publication. 

Notice 

This document is disseminated under the sponsorship of the Department of Transportation in the 

interest of information exchange. The United States Government assumes no liability for its 

contents or use thereof. 

The contents of this report reflect the views of the contractor who is responsible for the accuracy 

of the data presented herein. The contents do not necessarily reflect the official policy of the 

Department of Transportation. 

This report does not constitute a standard, specification, or regulation. 

The United States Government does not endorse products or manufacturers named herein. Trade 

or manufacturers’ names appear herein only because they are considered essential to the object 

of this document.

This report presents the results of a study to assist the U.S. Department of Transportation’s 

Federal Motor Carrier Safety Administration assess the potential benefits and costs of 

implementing provisions of Section 4120 of the Safe, Accountable, Flexible, Efficient 

Transportation Equity Act: A Legacy for Users (SAFETEA-LU) regarding private motor carrier 

public liability insurance. These provisions would require private passenger and property carriers 

to have financial responsibility in the same amounts currently required by sections 31138 and 

31139 of the United States Code. 

The work performed for the study involved conducting a literature review, collecting data, and 

developing a plan to interview and collect data and information from state agencies and 

stakeholders. All information obtained was examined and fed into safety and economic models 

to determine the benefits and costs that could be expected from implementation of the new 

private motor carrier financial responsibility requirements. 
 

Technical Report Documentation Page 

Form DOT F 1700.7

1. Report No. 

FMCSA-PSV-07-001 

2. Government Accession No. 3. Recipient's Catalog No. 

4. Title and Subtitle: 

Potential Applicability of Financial Responsibility Requirements to Private Motor Carriers

5. Report Date: 

 March 2007 

7. Author(s): 6. Performing Organization Code 

Mark Lepofsky, Patrick Balducci, Arthur Greenberg 

Contributors: Aftab Ahmed, David Kall, Thomas McSweeney, Jodi Rizek, and Erik Wik 

(Battelle); Daniel Murray (American Transportation Research Institute); David Hershey 

(National Accounting and Finance Council); Steve Keppler and Paul Bomgardner 

(Commercial Vehicle Safety Alliance) 

8. Performing Organization Report No.

9. Performing Organization Name and Address: 10. Work Unit No. 

Battelle Memorial Institute 

505 King Avenue 

Columbus, OH 43201

11. Contract or Grant No. 

GS-23F-8167H/ORDER 1406-04-06-DO60197 

13. Type of Report and Period Covered 

Final Report 

September 2005 – April 2006

12. Sponsoring Agency Name and Address: 

Department of Transportation 

Federal Motor Carrier Safety Administration 

400 Seventh Street, SW 

Washington, DC 20590 

14. Sponsoring Agency Code 

FMCSA

15. Supplementary Notes: 

Contracting Officer’s Technical Representative: Deborah M. Freund 

Task Manager: Richard F. Clemente

16. Abstract: 

This report presents the results of a study to assist the U.S. Department of Transportation’s Federal Motor Carrier Safety Administration 

assess the potential benefits and costs of implementing provisions of Section 4120 of the Safe, Accountable, Flexible, Efficient 

Transportation Equity Act: A Legacy for Users (SAFETEA-LU) regarding private motor carrier public liability insurance. These 

provisions would require private passenger and property carriers to have financial responsibility in the same amounts as are currently 

required by sections 31138 and 31139 of the United States Code. 

The work performed for the study involved conducting a literature review, collecting data, and developing a plan to interview and collect 

data and information from state agencies and stakeholders. All information obtained was examined and fed into safety and economic 

models to determine the benefits and costs that could be expected from implementation of the new private motor carrier financial 

responsibility requirements. 

The primary benefit associated with the expanded insurance requirements examined in this study stems from avoiding the high costs of 

crashes involving unsafe private carriers that would find it difficult or impossible to obtain public liability coverage at the new, higher 

levels. Estimated costs for insurance and reporting exceed estimated benefits in 26 of the 27 scenarios considered in this study, indicating 

that extending the current minimum financial responsibility requirements for for-hire motor carriers to private motor carriers is not costbeneficial under the assumptions used. However, the financial responsibility requirements examined within this study may be justifiable 

given equity considerations.

17. Key Words: 

Commercial Motor Carriers, Financial Responsibility, Insurance, Private Motor Carriers 

18. Distribution Statement

19. Security Classif. (of this report) 

 Unclassified 

20. Security Classif. (of this page) 

 Unclassified 

21. No. of Pages: 

 84 

22. Price 

 N/A 
SI* (MODERN METRIC) CONVERSION FACTORS 

APPROXIMATE CONVERSIONS TO SI UNITS APPROXIMATE CONVERSIONS FRO

Symbol When You Know Multiply By To Find Symbol Symbol When You Know Multiply By 

LENGTH LENGTH 

in inches 25.4 millimeters mm mm millimeters 0.039 incft feet 0.305 meters m m meters 3.28 feeyd yards 0.914 meters m m meters 1.09 Yami miles 1.61 kilometers km km kilometers 0.621 mi

AREA AREA 

in2 square inches 645.2 square millimeters mm2 mm2 square millimeters 0.0016 squft2 square feet 0.093 square meters m2 m2 square meters 10.764 squyd2 square yards 0.836 square meters m2 m2 square meters 1.195 squac acres 0.405 hectares ha ha hectares 2.47 acrmi2 square miles 2.59 square kilometers km2 km2 square kilometers 0.386 squ

VOLUME VOLUME 

fl oz fluid ounces 29.57 milliliters ml ml milliliters 0.034 flugal gallons 3.785 liters l l liters 0.264 gaft3 cubic feet 0.028 cubic meters m3 m3 cubic meters 35.71 cuyd3 cubic yards 0.765 cubic meters m3 m3 cubic meters 1.307 cu

MASS MASS 

oz ounces 28.35 grams g g grams 0.035 oulb pounds 0.454 kilograms kg kg kilograms 2.202 poT short tons (2000 lbs) 0.907 megagrams Mg Mg megagrams 1.103 sho

TEMPERATURE (exact) TEMPERATURE (exac

°F Fahrenheit 5(F-32)/9 Celsius °C °C Celsius 1.8 C + 32  temperature or (F-32)/1.8 temperature temperature 

ILLUMINATION ILLUMINATION 

fc foot-candles 10.76 lux lx lx lux 0.0929 fl foot-Lamberts 3.426 candela/m2 cd/m2 cd/m2 candela/m2 0.2919 

FORCE and PRESSURE or STRESS FORCE and PRESSURE or S

lbf pound-force 4.45 newtons N N newtons 0.225 psi pound-force per square inch 6.89 kilopascals kPa kPa kilopascals 0.145 

* SI is the symbol for the International System of Units. Appropriate rounding should be made to comply with Section 4 of ASTM E380.
 

Table of Contents 

Page 

EXECUTIVE SUMMARY .................................................................................................... ES-1

1.0 INTRODUCTION ............................................................................................................ 1-1

1.1 Background................................................................................................................ 1-1 

1.2 Project Methodology..................................................................................................1-3 

1.2.1 Literature Search and Data Gathering............................................................1-3 

1.2.2 Interviews with State Agencies......................................................................1-3 

1.2.3 Interviews with Stakeholders.........................................................................1-4 

1.2.4 Safety and Economic Analyses......................................................................1-4 

2.0 LITERATURE SEARCH AND DATA GATHERING ................................................ 2-1

2.1 Safety of Private Motor Carriers................................................................................2-1 

2.2 Insurance Requirements and Costs ............................................................................2-6 

2.2.1 Reports and Documents .................................................................................2-6 

2.2.2 State Private Motor Carrier Insurance Requirements ....................................2-8 

2.2.3 Cost of Insurance ...........................................................................................2-9 

2.3 Economic Analysis ..................................................................................................2-16 

3.0 INTERVIEWS WITH STATE AGENCIES .................................................................. 3-1

3.1 Safety Issues............................................................................................................... 3-2 

3.1.1 Private versus For-hire Carriers.....................................................................3-3 

3.2 Insurance Requirements and Insurability...................................................................3-3 

3.2.1 Insurance Requirements.................................................................................3-3 

3.2.2 Insurability .....................................................................................................3-5 

4.0 INTERVIEWS WITH STAKEHOLDERS.................................................................... 4-1

4.1 Safety of Private Motor Carriers................................................................................4-1 

4.2 Pricing of Insurance for Private Motor Carriers ........................................................4-2 

4.3 Insurability of Private Motor Carriers........................................................................4-3 

4.4 Acquisition of Insurance............................................................................................4-4 

4.5 Affects of Increased Insurance Requirements on Operations....................................4-4 

4.6 Industry Growth and Driver Turnover.......................................................................4-5 

4.7 Costs to Explore Obtaining Public Liability Insurance .............................................4-5 
 

Table of Contents (continued) 

 Page 

5.0 ANALYSES ....................................................................................................................... 5-1

5.1 Baseline......................................................................................................................5-1 

5.1.1 Potentially Affected Private Carriers............................................................. 5-1 

5.1.2 Affected Private Carriers Accounting for Existing Insurance Coverage.......5-3 

5.1.3 Number of Vehicles for Which Insurance is Required..................................5-4 

5.2 Costs to Private Motor Carriers .................................................................................5-5 

5.2.1 Costs to Explore Obtaining Public Liability Insurance .................................5-5 

5.2.2 Costs for Public Liability Insurance ..............................................................5-5 

5.2.3 Costs to File Proof of Insurance..................................................................... 5-7 

5.2.4 Impacts on Small Businesses......................................................................... 5-8 

5.2.5 Summary of Costs........................................................................................5-10 

5.3 Benefits ....................................................................................................................5-11 

5.3.1 Safety Benefits from Crash Reduction ........................................................5-11 

5.3.2 Summary of Benefits ...................................................................................5-15 

5.4 Benefit-cost Ratios................................................................................................... 5-15 

6.0 CONCLUSIONS AND RECOMMENDATIONS.......................................................... 6-1

6.1 Conclusions................................................................................................................ 6-1 

6.2 Recommendations......................................................................................................6-2 

APPENDIX A. REFERENCES 

APPENDIX B. ADDITIONAL ANNOTATED REFERENCES 

APPENDIX C. STATE-SPECIFIC DETAIL 
 

List of Figures Page 

Figure 5-1. Insurance Cost Curves for 9-15 Passenger Vehicles, Buses, and Heavy Trucks.....5-6 

List of Tables 

Table ES-1. Benefit-Cost Analysis Findings.................................................................................. 4 

Table 1-1. Insurance Requirements for For-hire Carriers of Property.........................................1-2 

Table 1-2. Insurance Requirements for For-hire Carriers of Passengers.....................................1-2 

Table 2-1. Number of Carriers in Each Category........................................................................2-1 

Table 2-2. State Insurance Requirements for Private Motor Carriers ......................................2-10 

Table 2-3. State Insurance Requirements for all Vehicles........................................................2-12 

Table 2-4. Effective State Insurance Requirements for Private Motor Carriers.......................2-14 

Table 2-5. Insurance Cost Data from Private Motor Carriers....................................................2-15 

Table 2-6. Insurance Cost Data from Insurance Companies .....................................................2-16 

Table 3-1. State Agencies Interviewed ........................................................................................3-1 

Table 3-2. State Private Carrier Insurance Requirements............................................................3-4 

Table 3-3. State Private versus For-hire Carrier Financial Responsibility Requirements...........3-5 

Table 5-1. MCMIS Fields Used to Identify Private Carriers.......................................................5-1 

Table 5-2. MCMIS Fields Used to Assign Carriers to Categories ..............................................5-2 

Table 5-3. Number of Carriers in Each Category........................................................................5-3 

Table 5-4. Estimates of Carriers with Adequate Insurance Coverage by Fleet Size ...................5-4 

Table 5-5. Number of Carriers in Each Category Requiring Additional Insurance ....................5-4 

Table 5-6. Number of Vehicles in Each Category Requiring Additional Insurance ...................5-5 

Table 5-7. Insurance Costs per Vehicle per Year ........................................................................5-6 

Table 5-8. Filing Costs.................................................................................................................5-8 

Table 5-9. Impacted NAICS Codes ............................................................................................. 5-9

Table 5-10. Small Business Share of Establishments, Employees, Annual Pay, and Estimated 

Receipts in Impacted NAICS Codes.................................................................................... 5-9 

Table 5-11. Small Business Cost Analysis ................................................................................5-10 

Table 5-12. Summary of Costs ..................................................................................................5-10 

Table 5-13. Results of Cost Sensitivity Analysis....................................................................... 5-11 

Table 5-14. Crash Costs by Vehicle Type and Crash Severity..................................................5-12 

Table 5-15. Crash Rates by Carrier Category............................................................................5-12 

Table 5-16. Annual Reductions in Crashes, Fatalities, and Injuries..........................................5-13 

Table 5-17. MCMIS Underreporting Correction Factors .......................................................... 5-13 

Table 5-18. Annual Reductions in Crashes, Fatalities, and Injuries Corrected for Underreporting

............................................................................................................................................5-14 

Table 5-19. Annual Reductions in Crashes, Fatalities, and Injuries Corrected for Carriers Already 

Meeting the Insurance Requirements.................................................................................5-14 

Table 5-20. Annual Reductions in Crashes, Fatalities, and Injuries Corrected for Carriers 

Meeting the Insurance Requirements Assuming a 60 Percent Ratio of Effectiveness......5-14 

Table 5-21. Summary of Benefits..............................................................................................5-15 

Table 5-22. Benefit-cost Analysis Findings...............................................................................5-16 

Table C-1. Carriers and Vehicles Requiring Additional Insurance by State ............................. C-2 
 

Table C-2. NAICS Codes, SBA Size Threshold, and Annual Revenue for Selected Trucking 

Industries............................................................................................................................. C-4 

Table C-3. NAICS Codes, SBA Size Threshold, and Number of Employees for Additional 

Selected Trucking Industries............................................................................................... C-6 

Table C-4. Number of Small and Large Business in Selected Trucking Industries .................. C-7 

Table C-5. NAICS Codes, SBA Size Threshold, and Annual Revenue for Selected Passengercarrying Industries .............................................................................................................. C-9 

Table C-6. Number of Small and Large Business in Selected Passenger-carrying Industries C-10 
 

List of Abbreviations and Acronyms

ABA American Bus Association 

ANOVA Analysis of Variance 

AIA American Insurance Association 

ATA American Trucking Associations 

ATRI American Transportation Research Institute 

BCR Benefit-Cost Ratio 

BI&PD Bodily Injury and Property Damage 

BLS Bureau of Labor Statistics 

BTS Bureau of Transportation Statistics 

CFR Code of Federal Regulations 

CHP California Highway Patrol 

CMV Commercial Motor Vehicle 

CR Compliance Review 

CVSA Commercial Vehicle Safety Alliance 

DII Driver Inspection Indicator 

DRM Driver Review Measure 

ECM Engine Control Module 

ESM Enforcement Severity Measure 

FACT Fatal Accident Complaint Team 

FARS Fatality Analysis Reporting System 

FHWA Federal Highway Administration 

FMCSA Federal Motor Carrier Safety Administration 

FMCSR Federal Motor Carrier Safety Regulations 

GES General Estimates System 

NHTSA National Highway Traffic Safety Administration 

LTCCS Large Truck Crash Causation Study 

LTL Less Than Truckload 

MCMIS Motor Carrier Management Information System 

MISTER Management Information System of Terminal Evaluation Records 

NAS North American Standard 

NASS National Automotive Sampling System 

NAICS North American Industry Classification System 

NATEF National Automotive Technicians Education Foundation 

NIOSH National Institute for Occupational Safety and Health 

NITL National Industrial Transportation League 

NTS National Transportation Statistics 

NPTC National Private Truck Council 

NTSB National Transportation Safety Board 

OES Occupational Employment Statistics 

OMB Office of Management and Budget 

OOS Out of Service 

RCCC Regular Common Carriers Conference 
 

List of Abbreviations and Acronyms (continued) 

ROE Ratio of Effectiveness 

SAFER Safety and Fitness Electronic Records 

SAFETEA-LU Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy 

for Users 

SBA Small Business Administration 

SEA Safety Evaluation Area 

TIFA Trucks Involved in Fatal Accidents 

UMTRI University of Michigan Transportation Research Institute 

USDOT U.S. Department of Transportation 

VIUS Vehicle Inventory and Use Survey 

VMT Vehicle Miles Traveled 
 ES-1 

EXECUTIVE SUMMARY

Part 387 of the Federal Motor Carrier Safety Regulations (FMCSRs) requires specified motor 

carriers of property and passengers to meet certain financial responsibility requirements. These 

requirements apply, with some exceptions, to: 

 For-hire motor carriers operating commercial motor vehicles transporting property in 

interstate or foreign commerce (49 CFR 387.3(a)) 

 Any motor carrier operating commercial motor vehicles transporting hazardous materials, 

hazardous substances, or hazardous wastes in interstate, foreign, or intrastate commerce 

(49 CFR 387.3(b)) 

 For-hire carriers of passengers operating in interstate or foreign commerce (49 CFR 

387.27) 

Financial responsibility means having financial reserves, such as insurance policies or surety 

bonds, sufficient to satisfy the minimum public liability requirements. Public liability is liability 

for bodily injury, property damage, and environmental restoration. Environmental restoration

means restitution for the loss, damage, or destruction of natural resources arising out of an 

accidental discharge of toxic or other environmentally harmful materials or liquids. 

There are currently no Federal financial responsibility requirements for private motor carriers of 

non-hazardous commodities operating in interstate commerce, or for private motor carriers of 

passengers operating in interstate commerce. Current regulations exempts these private motor 

carriers of property and private motor carriers of passengers from the requirement to have 

financial responsibility covering public liability, property damage, and environmental restoration 

resulting from crashes involving their vehicles. 

Although these carriers may be subject to state insurance requirements, it is important to 

consider the ramifications of establishing uniform national requirements. Section 4120 of the 

Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users 

(SAFETEA-LU) would require private passenger and property carriers to have financial 

responsibility in the same amounts as are currently required by sections 31138 and 31139 of the 

United States Code. This section would also authorize the Secretary of Transportation to require 

private carriers of non-hazardous property and private motor carriers of passengers to file 

evidence of financial responsibility with the Department, as for-hire carriers already do. 

This project was designed to assist the U.S. Department of Transportation’s (USDOT) Federal 

Motor Carrier Safety Administration (FMCSA) to assess the potential benefits and costs of 

implementing provisions of SAFETEA-LU regarding private motor carrier public liability 

insurance. 

Battelle assembled and led a project team that included the American Transportation Research 

Institute (ATRI), the Commercial Vehicle Safety Alliance (CVSA), and Daecher Consulting. 

The work performed for the study involved conducting a literature review, collecting data, and 

developing a plan to interview and collect data and information from state agencies and 

stakeholders. All information obtained was examined and fed into safety and economic models 
 ES-2 

to determine the benefits and costs that could be expected from implementation of the new 

private motor carrier financial responsibility requirements. 

Costs for expanding the minimum financial responsibility requirements to private motor carriers 

would include staff time to become familiar with a new regulation and to assess their operation 

to determine their need for additional insurance, and obtain it. This process would include 

obtaining insurance quotes and determining the most appropriate insurance option. These total 

industry costs are estimated at $306,890 to $460,334 for private carriers operating 9-15 

passenger vehicles, $567,992 to $851,988 for private carriers operating buses designed or used to 

transport 16 or more passengers, and $54,981,077 to $82,471,615 for motor carriers of nonhazardous property. These are considered one-time costs, necessary for performing assessments 

necessary to obtain insurance commensurate with the FMCSA standards presently applied to forhire carriers. These costs are assumed to be incurred in the first year of the 10-year analysis 

timeframe. 

The vast majority of the costs considered in this study, however, are those that would be tied to 

the expanded insurance requirements. The total insurance costs borne by private carriers is 

estimated at $22.3 to $33.4 million for 9-15 passenger vehicle operators, $56.4 to $84.6 million 

for 16 or more passenger vehicle operators, and $3.4 to $5.1 billion for motor carriers of nonhazardous property over the 10-year analysis time frame. 

Under the insurance requirements outlined in SAFETEA-LU and evaluated in this study, private 

carriers would be required to file forms that provide evidence of required bodily injury and 

property damage (BI&PD) insurance coverage (Forms BMC-91, 91x, or 82), and endorsements 

that must be attached to BI&PD policies (Forms BMC-90 and 32). Thus, private carriers would, 

at a minimum, be required to file two forms with FMCSA if they were subject to the agency’s 

insurance requirements. The total insurance filing costs borne by private carriers is estimated at 

$11,835 to $17,753 for 9-15 passenger vehicle operators, $27,258 to $40,888 for 16 or more 

passenger vehicle operators, and $2,595,748 to $3,893,622 for motor carriers of non-hazardous 

property over the 10-year analysis time frame. 

The primary benefit associated with the expanded insurance requirements examined in this study 

stem from avoiding the high costs of crashes involving unsafe private carriers that would find it 

difficult or impossible to obtain public liability coverage at the new, higher levels. Expanding 

Federal public liability insurance requirements to private carriers would not be expected to 

completely eliminate the discrepancy between private and for-hire accident rates. Thus, this 

analysis considers a ratio of effectiveness (ROE), where the proposed regulation change would 

reduce but not eliminate the gap in accident rates between private and for-hire carriers. ROEs of 

60, 80, and 100 percent were used in the low-, mid-, and high-end estimates. The cost savings 

associated with avoided crashes for 9-15 passenger vehicles are estimated at $3.2 to $5.3 million 

over the 10-year analysis time horizon. The avoided crash costs for 16 or more passenger 

vehicles are estimated at $9.5 to $15.8 million. The crash costs avoided due to a reduction in the 

number of crashes involving motor carriers of non-hazardous property is estimated at $2.3 to 

$3.8 billion. 
 ES-3 

The benefits and costs over the ten-year analysis period associated with the expanded insurance 

requirements are highlighted in ES-1 and are shown in present value terms, discounted at 7 

percent. The BCA considers 27 scenarios, with varying combinations of benefits and costs 

ranging from low-end to high-end estimates, with mid-point estimates also included. As noted 

previously, the benefits estimates vary based on the ROE, ranging from 60 percent (low-end) to 

100 percent (high-end) with a mid-point estimate of 80 percent. The cost estimate includes a 

mid-point estimate and low- and high-end estimates that represent ± 20 percent of the mid-point. 

The scenarios also differ based on the vehicle fleet considered: 9-15 passenger vehicles, 16+ 

passenger vehicles, and trucks carrying non-hazardous property. 

Table ES-1 shows that estimated costs exceed estimated benefits in 26 of the 27 scenarios 

considered in this study. Net costs (costs minus benefits) are estimated at $16.9 to $30.2 million 

for 9-15 passenger vehicles, $40.6 to 75.1 million for 16+ passenger vehicles, and -$428.41

 to 

$2.8 billion for trucks carrying non-hazardous property. In all cases except Scenario 21 

(highlighted in Table ES-1) where low-end costs and high-end benefits are considered for nonhazardous property-carrying trucks, costs exceed benefits and the benefit-cost ratios (BCRs) fall 

below 1.0. The lowest BCRs are attributed to the 9-15 passenger vehicles, while trucks achieve 

the highest BCRs. 

 

1

 For one of the 27 scenarios, benefits exceeded costs, resulting in a negative net cost. 
 ES-4 

Table ES-1. Benefit-Cost Analysis Findings 

Scenario Benefits Costs Vehicle Type Benefits Costs BCR 

1 Low Low 9-15 Passenger $3,195,125 $22,274,703 0.14 

2 Low Low 16+ Passenger $9,497,027 $56,415,901 0.17 

3 Low Low Trucks $2,284,724,636 $3,379,486,082 0.68 

4 Low Mid 9-15 Passenger $3,195,125 $27,843,379 0.11 

5 Low Mid 16+ Passenger $9,497,027 $70,519,876 0.13 

6 Low Mid Trucks $2,284,724,636 $4,224,357,602 0.54 

7 Low High 9-15 Passenger $3,195,125 $33,412,055 0.10 

8 Low High 16+ Passenger $9,497,027 $84,623,851 0.11 

9 Low High Trucks $2,284,724,636 $5,069,229,123 0.45 

10 Mid Low 9-15 Passenger $4,260,167 $22,274,703 0.19 

11 Mid Low 16+ Passenger $12,662,703 $56,415,901 0.22 

12 Mid Low Trucks $3,046,299,515 $3,379,486,082 0.90 

13 Mid Mid 9-15 Passenger $4,260,167 $27,843,379 0.15 

14 Mid Mid 16+ Passenger $12,662,703 $70,519,876 0.18 

15 Mid Mid Trucks $3,046,299,515 $4,224,357,602 0.72 

16 Mid High 9-15 Passenger $4,260,167 $33,412,055 0.13 

17 Mid High 16+ Passenger $12,662,703 $84,623,851 0.15 

18 Mid High Trucks $3,046,299,515 $5,069,229,123 0.60 

19 High Low 9-15 Passenger $5,325,208 $22,274,703 0.24 

20 High Low 16+ Passenger $15,828,379 $56,415,901 0.28 

21 High Low Trucks $3,807,874,394 $3,379,486,082 1.13 

22 High Mid 9-15 Passenger $5,325,208 $27,843,379 0.19 

23 High Mid 16+ Passenger $15,828,379 $70,519,876 0.22 

24 High Mid Trucks $3,807,874,394 $4,224,357,602 0.90 

25 High High 9-15 Passenger $5,325,208 $33,412,055 0.16 

26 High High 16+ Passenger $15,828,379 $84,623,851 0.19 

27 High High Trucks $3,807,874,394 $5,069,229,123 0.75 

While some individuals interviewed for this research believe that private motor carriers are 

generally safer than for-hire motor carriers, no studies were identified that indicated that private 

carriers, as a whole, were safer than for-hire carriers. The FMCSA data analyzed for this project 

indicate the opposite is true: for-hire carriers in all three carrier categories examined have lower 

overall crash rates per vehicle miles traveled than private carriers. However, data examined on 

fatal truck and bus crashes showed that private carriers had lower fatality crash involvements 

than for-hire carriers. 

Based on the results of the analyses conducted for this project, it appears that extending the 

current minimum financial responsibility requirements for for-hire motor carriers to private 

motor carriers is not cost-beneficial under the assumptions used in this analysis. The BCRs for 

the two passenger carrier categories are both significantly less than one. The BCR for nonhazardous property motor carriers is closer to one, but still indicates that the costs outweigh the 

benefits for this much larger group of private carriers. However, the financial responsibility 

requirements examined within this study may be justifiable given equity considerations. 
 1-1 

1.0 INTRODUCTION

1.1 Background 

Part 387 of the Federal Motor Carrier Safety Regulations (FMCSRs) requires specified motor 

carriers of property and passengers to meet certain financial responsibility requirements. These 

requirements apply, with some exceptions, to: 

 For-hire motor carriers operating commercial motor vehicles (CMVs) transporting 

property in interstate or foreign commerce (49 CFR 387.3(a)) 

 Any motor carrier operating commercial motor vehicles transporting hazardous materials, 

hazardous substances, or hazardous wastes in interstate, foreign, or intrastate commerce 

(49 CFR 387.3(b)) 

 For-hire carriers of passengers operating in interstate or foreign commerce (49 CFR 

387.27) 

Financial responsibility means having financial reserves, such as insurance policies or surety 

bonds, sufficient to satisfy the minimum public liability requirements. Public liability is liability 

for bodily injury, property damage, and environmental restoration. Environmental restoration

means restitution for the loss, damage, or destruction of natural resources arising out of an 

accidental discharge of toxic or other environmentally harmful materials or liquids. 

These motor carriers must have at least the minimum amount of insurance required by law 

(United States Code, Title 49, Sections 31138 and 31139). For motor carriers of property, the 

schedule of limits is shown in Table 1-1. 
 1-2 

Table 1-1. Insurance Requirements for For-hire Carriers of Property 

Type of Carriage Commodity Transported Effective Date: 

1/1/1985 

(1) For-hire (in interstate or 

foreign commerce, with a gross 

vehicle weight rating of 10,001 or 

more pounds). 

Property (non-hazardous). $750,000 

(2) For-hire and Private (in 

interstate, foreign, or intrastate 

commerce, with a gross vehicle 

weight rating of 10,001 or more 

pounds). 

Hazardous substances, as defined in 49 CFR 

171.8, transported in cargo tanks, portable 

tanks, or hopper-type vehicles with capacities in 

excess of 3,500 water gallons; or in bulk 

Division 1.1, 1.2, and 1.3 materials, Division 

2.3, Hazard Zone A, or Division 6.1, Packing 

Group I, Hazard Zone A material; in bulk 

Division 2.1 or 2.2; or highway route controlled 

quantities of a Class 7 material, as defined in 49 

CFR 173.403. 

$5,000,000 

(3) For-hire and Private (in 

interstate or foreign commerce, 

in any quantity; or in intrastate 

commerce, in bulk only; with a 

gross vehicle weight rating of 

10,001 or more pounds). 

Oil listed in 49 CFR 172.101; hazardous waste, 

hazardous materials and hazardous substances 

defined in 49 CFR 171.8 and listed in 49 CFR 

172.101, but not mentioned in (2) above or (4) 

below. 

$1,000,000 

(4) For-hire and Private (in 

interstate or foreign commerce, 

with a gross vehicle weight rating 

of less than 10,001 pounds). 

Any quantity of Division 1.1, 1.2, or 1.3 material; 

any quantity of a Division 2.3, Hazard Zone A, 

or Division 6.1, Packing Group I, Hazard Zone 

A material; or highway route controlled 

quantities of a Class 7 material as defined in 49 

CFR 173.403 

$5,000,000 

For for-hire motor carriers of passengers, the requirements are shown in Table 1-2. 

Table 1-2. Insurance Requirements for For-hire Carriers of Passengers 

Vehicle Seating Capacity Effective Date: 

11/19/1985 

(1) Any vehicle with a seating capacity of 16 passengers or more $5,000,000 

(2) Any vehicle with a seating capacity of 15 passengers or less 

 (see exceptions listed below) 

$1,500,000 

Exceptions to these requirements for vehicles with a seating capacity of 15 passengers or less, as 

provided in 49 CFR 387.27(b), are: 

1. A motor vehicle transporting only school children and teachers to or from school 

2. A motor vehicle providing taxicab service and having a seating capacity of less than 7 

passengers and not operated on a regular route or between specified points 
 1-3 

3. A motor vehicle carrying less than 16 individuals in a single daily round trip to commute to 

and from work and 

4. A motor vehicle operated by a motor carrier under contract providing transportation of 

preprimary, primary, and secondary students for extracurricular trips organized, 

sponsored, and paid by a school district. 

There are currently no Federal financial responsibility requirements for private motor carriers of 

non-hazardous commodities operating in interstate commerce, or for private motor carriers of 

passengers operating in interstate commerce. Current regulations exempt these private motor 

carriers of property and private motor carriers of passengers from the requirement to have 

financial responsibility covering public liability, property damage, and environmental restoration 

resulting from crashes involving their vehicles. 

Although these carriers may be subject to state insurance requirements, it is important to 

consider the ramifications of establishing uniform national requirements. Section 4120 of the 

Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users 

(SAFETEA-LU) would require private passenger and property carriers to have financial 

responsibility in the same amounts as are currently required by sections 31138 and 31139 of the 

United States Code. This section would also authorize the Secretary of Transportation to require 

private carriers of property (that is, non-hazardous cargoes) and private motor carriers of 

passengers to file evidence of financial responsibility with the Department, as for-hire carriers 

already do. 

1.2 Project Methodology 

Battelle assembled and led a project team that included the American Transportation Research 

Institute (ATRI), the Commercial Vehicle Safety Alliance (CVSA), and Daecher Consulting. 

The work performed for the study involved conducting a literature review, collecting data, and 

developing a plan to interview and collect data and information from state agencies and 

stakeholders. All information obtained was examined and fed into safety and economic models 

to determine the benefits and costs that could be expected from implementation of the new 

private motor carrier financial responsibility requirements. 

1.2.1 Literature Search and Data Gathering 

The literature search for this project focused on gathering literature, data, and sources related to 

(a) the safety of transportation, and (b) insurance requirements and costs of insurance for private 

motor carriers operating CMVs designed to seat 9-15 passengers (including the driver), CMVs 

designed to seat 16 or more passengers (including the driver), and CMVs transporting nonhazardous property. 

1.2.2 Interviews with State Agencies 

In an attempt to corroborate and/or gather information not available in the literature that 

quantified the safety of private motor carriers and state insurance requirements, survey/interview 
 1-4 

questions were developed and administered to state officials. It was expected that individuals in 

state agencies (both safety- and insurance-related agencies) would have data or insight on the 

safety of transportation involving private motor carriers that they could share with the project 

team. A list of questions was e-mailed in advance to a previously developed list of state officials 

and subsequent surveys were administered by phone or by return of the e-mail questionnaire. 

Follow-up calls were required in some cases to clarify any ambiguities. 

1.2.3 Interviews with Stakeholders 

A similar activity sought to obtain additional information on private motor carrier safety and 

insurance issues that was not available from the literature search. This material included carrier 

safety; insurability; insurance pricing, coverage, and acquisition; and certain crash cost 

information. The targeted groups for these interviews included representative industry 

associations; however, it became apparent that the detailed information sought was more readily 

available from insurance companies and private motor carriers and it was these groups that were 

the focus of the interviews. As with the state agency interviews, these interviews were conducted 

with the help of questions e-mailed to the respondents in order to facilitate responses. 

1.2.4 Safety and Economic Analyses 

The data and information obtained in earlier stages of the project were used to develop the safety 

and economic models needed to determine the potential benefit-cost ratio for implementing new 

financial responsibility requirements for private motor carriers. The primary benefits are the 

safety impacts of crash prevention and the primary costs are those to purchase and file proof of 

the required public liability coverage. 
 2-1 

2.0 LITERATURE SEARCH AND DATA GATHERING

The literature search for this project focused on gathering literature, data, and sources related to 

(a) the safety of transportation, and (b) insurance requirements and costs of insurance for private 

motor carriers operating CMVs designed to seat 9-15 passengers (including the driver), CMVs 

designed to seat 16 or more passengers (including the driver), and CMVs transporting nonhazardous property. The information provided in this section has been organized into three 

sections, based on the primary focus of each information source: 

 Safety of private motor carriers 

 Insurance requirements and costs 

 Economic analysis techniques 

Most of the literature did not specifically address private carriers or differentiate between them 

and for-hire carriers; however, some of the overall information presented can be related to 

general differences between these two types of carriers. 

2.1 Safety of Private Motor Carriers 

Databases 

During the literature review, several databases were examined in detail to determine if they could 

support a comparison of the safety of private motor carriers to the safety of for-hire motor 

carriers. These databases included the Trucks Involved in Fatal Accidents (TIFA) and Buses 

Involved in Fatal Accidents (BIFA) databases maintained by the University of Michigan 

Transportation Research Institute (UMTRI). Data from FMCSA’s Motor Carrier Management 

Information System (MCMIS) was received during the analysis phase of the project and is 

discussed in Section 5.0. The distribution of active domestic interstate carriers in the MCMIS 

database among the different types of operations is summarized in Table 2-1. 

Table 2-1. Number of Carriers in Each Category 

Carriers 

Category Private For-hire Both* 

9-15 passenger vehicles only 536 493 239 

16+ passenger vehicles only 1,606 652 286 

non-hazardous property vehicles only 239,912 141,147 21,918 

more than one type of vehicle 1,265 384 213 

not assigned 17,860 7,867 968 

Total 261,179 150,543 23,624 

Percentage 60.0% 34.6% 5.4% 

*These are private carriers that also have for-hire authority and, therefore, already 

have the required minimum levels of financial responsibility and would not need to 

obtain additional insurance. 
 2-2 

TIFA data for 2002 analyzed by UMTRI show that 33.7 percent of trucks involved in fatal 

accidents were operated by private carriers, 54.8 percent by for-hire carriers, 1.3 percent were 

government owned, 0.8 percent were daily rentals, and 9.4 percent were for carrier type that 

could not be determined (Blower, 2005). These figures include fatal crashes involving vehicles 

operated by hazardous materials carriers, but those percentages were very low. Only 4.6 percent 

of the trucks operated by private carriers in the TIFA data carried hazardous materials; the figure 

for the for-hire carriers was 3.1 percent. As private carriers operate more vehicles than for-hire 

carriers according to current MCMIS data (1.4 million trucks for private carriers and 0.58 million 

trucks for for-hire carriers), the TIFA data indicate that private carriers have significantly lower 

fatality crash involvements per vehicle than for-hire carriers. 

BIFA data analyzed by UMTRI show that of buses involved in fatal accidents between 1999 and 

2002, 6.1 percent were operated by private carriers while 30.7 percent were operated by for-hire 

carriers (Blower, 2005). MCMIS data include approximately 16,000 buses for private carriers 

and approximately 57,000 buses for for-hire carriers, indicating a lower fatality crash 

involvement per vehicle for private carriers (20 percent of the fatal crashes and 28 percent of the 

vehicles). 

Literature – Property Carriers 

Petty (2005) cites a National Private Truck Council (NPTC) survey of 63 private fleets in early 

2005 that indicated that the recordable accident rate per million vehicle miles for these 

companies was 0.424 for 2003 and 2004. This was compared to the rate for all large trucks of 

0.763, a 45 percent difference. However, the industry-wide rate was determined from FMCSA 

data for 2001, so the rates are not directly comparable. 

According to a recent article (Bradley, 2005), the current trucking environment is making inhouse, private fleets more attractive to some businesses, including businesses with regular routes, 

backhaul opportunities, and time-sensitive customers. Driver pay is reported to be higher and 

working conditions are reported to be better at private fleets. The article also cites a survey 

conducted by the NPTC of 200 companies that indicated annual driver turnover rates in private 

fleets of 11 to 16 percent, as compared to rates in excess of 100 percent for for-hire fleets. 

Additional details were provided in a separate article that compared these figures to those for the 

trucking industry overall, which was 125 to 135 percent. A more recent survey of NPTC 

membership (McFain, 2005) reports an annual driver turnover rate of private carriers of 16.9 

percent, based on 199 responses. Data provided at a recent industry association meeting placed 

private carrier driver turnover at 6 percent; the rate was reported to be 115 percent for for-hire 

truckload drivers and 15 percent for for-hire less-than-truckload drivers (Fisher, 2005). Finally, 

another article quotes Peter Vroom, President of the Truck Renting and Leasing Association, 

who reported that some private fleets have annual driver turnover rates of 3 to 5 percent, as 

compared to a for-hire industry driver turnover rate of 121 percent in the third quarter of 2004 

(PACCAR, 2005). 

Other data indicate that private fleets are losing ground to for-hire fleets. Data reported in 

American Trucking Trends shows that private carriers account for 48.1 percent of all registered 

fleets in 2005, but this figure was 50.6 percent in 2004 and 68 percent in 1992 (although the 
 2-3 

definition for 1992 was “not for hire” rather than “private”) (ATA, 2005). The more recent 

NPTC survey (McFain, 2005) found that the primary reason to operate a private fleet cited by 

58.3 percent of respondents is to provide better customer service to key customers. Cost 

advantages were cited as the primary reason by 15.1 percent of the respondents. 

A National Institute for Occupational Safety and Health (NIOSH) report (2003) cited a 2002 

study on fatigue-related crashes based on TIFA data that examined private versus for-hire 

carriers, single-unit trucks versus tractor-semitrailers, and length of trip (local, 50 to 200 miles, 

and more than 200 miles). This study identified private carriers as having the second highest 

fatigue-related fatal crash rate per vehicle mile traveled (2.47), following for-hire, single-unit 

truck drivers (3.41), although the sample sizes for these groups were small. They reported that 

for-hire carrier drivers had a “substantially higher risk” of fatal, fatigue-related crashes than 

private carrier drivers. The group with the highest relative risk was for-hire tractor-semitrailer 

drivers on one-way trips of over 200 miles. 

Literature – Passenger Carriers 

One study focused on the safety of passenger motor carriers (Corsi, 2002b) based on an 

examination of Motor Carrier Safety Status (SafeStat) Measurement in four Safety Evaluation 

Areas (SEAs): driver, vehicle, accident, and safety management.2

 It utilized data compiled in 

September 2000 from SafeStat and all available data on passenger carriers in the MCMIS Census 

File. Data were based on the results of carrier’s roadside inspections, compliance reviews, 

enforcement cases, and crashes. The report was divided into two parts. One part compared the 

safety performance of carriers transporting passengers with that of carriers in other key industry 

segments (building materials, bulk freight, general freight, moving/household goods, intermodal 

freight, large machinery, tank truck operations, and passenger transport) and was broken down 

by for-hire and private carriers. The other part represented the same summary statistics for 

subsections of passenger carriers based on carrier size. The data included 2,826 for-hire and 114 

private motor carriers of passengers. The for-hire passenger carriers had no unsatisfactory ratings 

on their most recent compliance review and 5 percent of private passenger carriers had 

unsatisfactory ratings. Passenger motor carriers received the highest levels of compliance based 

on overall safety performance; they had a recordable accident rate (number of crashes per million 

miles traveled) of less than 1 and had enforcement severity scores of 1.39 and 2.5 for private and 

for-hire carriers, respectively. While for-hire carriers generally outperformed the private carriers 

from a safety perspective, both types of passenger carriers achieved very high levels of 

compliance. 

The second part of the SafeStat analysis of passenger motor carriers examined how safety 

performance differs between passenger carriers based on size. Subgroups were established based 

on different numbers of power units: only 1, 2 to 3, 4 to 8, 9 to 25, and 26 or more. Based on the 

data, conditional evaluations decreased as the size of the carrier increased. The study concluded 

that size seems to matter with respect to an overall evaluation of carrier safety using compliance 

reviews. Carriers with the largest number of power units (26+) had the lowest average recordable 

crash rate, but overall, the smaller the fleet size, the lower the recordable crash rate. The largest 

 

2

 Lower SEA values indicate safer performance. 
 2-4 

fleet size group had the lowest driver review measure. Also, as carrier size increased, out-ofservice (OOS) rates decreased. In general, for-hire carriers with the largest-sized fleets 

outperformed the smaller fleets. Due to insufficient data on private passenger motor carriers, 

they were unable to examine the influence of carrier size on performance. Overall, passenger 

carriers are the safest industry segment, the authors reported. 

Literature – Both Property and Passenger Carriers 

Corsi (2000) examined the safety performance of motor carriers, primarily among numerous 

industry segments, including both passenger carriers and property carriers in a number of 

different commodity-based segments.3 The study distinguished between private and for-hire 

carriers and concluded that private carriers have significantly better performance than do for-hire 

carriers on the driver SEA. Eight segments had no driver violations in 80 percent of the reviewed 

carriers and seven of them were private segments. The two lower-performing segments in the 

driver safety area were both for-hire segments. The for-hire carriers performed better on the 

compliance review, vehicle safety review, safety management review, and recordable crash rate 

measures. In eight segments, more than 30 percent of private carriers rated during a compliance 

review received a conditional rating; whereas, for for-hire carriers it was true in only one 

segment. Only two segments had higher scores for the vehicle safety review measure, and both 

of these involved private carriers. Four out of five segments with 60 percent or more of the firms 

with no safety management violations involved for-hire carriers. While the study reported a wide 

variation in recordable crash rates among the segments, they identified a concentration of high 

rates among private firms (there were five segments with average private carrier recordable crash 

rates of 1.5 per million vehicle miles traveled or more). 

The Corsi (2000) study examined passenger motor carriers and determined that a higher 

percentage of for-hire carriers received a satisfactory rating upon their most recent compliance 

review (82.2 versus 70.0 percent). The unsatisfactory ratings went to 10 percent of the private 

carriers and only 1.6 percent of the for-hire carriers. The recordable crash rate for private carriers 

was 0.13 per million vehicle miles traveled (VMT); whereas, it was 0.91 for for-hire carriers.4

Private carriers had a higher percentage of acute or critical driver violations as well, 33.3 versus 

6.0 percent. The data show that for-hire fleets have lower vehicle SEAs (28.6 versus 64.0), lower 

driver SEAs (23.0 versus 55.7), and lower driver safety review measures (1.8 versus 14.7) than 

private fleets. 

A more recent examination of SafeStat and MCMIS data by Corsi (2004) used data compiled in 

September 2000, September 2001, September 2002, and September 2003. More than 400,000 

individual motor carriers, both private and for-hire, were included in each of the four 

compilations. The same 20 industry segments used in Corsi’s earlier study (2000) were used 

here, with the for-hire, general freight segment broken into truckload and less-than-truckload 

components, for a total of 21 segments. As with the earlier study, private carriers had better 

 

3

 The ten industry segments analyzed are building materials, moving/household goods, general freight, heavy 

equipment, produce, intermodal, passenger transportation, refrigerated (non-produce), tank carriers, and bulk 

materials (non-tank). Each of these was separated into two segments, one for private carriers and one for for-hire 

carriers, bringing the total number of segments analyzed to 20. 

4

 The report cautions on the small sample size that was used to develop the recordable crash rate figures. 
 2-5 

driver SEA scores and for-hire carriers had better records on compliance review and safety 

management review measures. There was little difference observed between the groups on driver 

out-of-service rates, hours-of-service violation rates, vehicle out-of-service rates, and vehicle 

SEA values. Unlike in the 2000 report, the 2004 study determined crash rates and fatal crash 

rates on a per-power-unit basis rather than on a per-vehicle-mile-traveled basis. The private 

carriers had significantly lower crash- and fatal crash-to-power unit rates (0.0436 versus 0.823 

for all crashes and 0.0020 versus 0.0044 for fatal crashes). However, the authors did not report 

the average annual mileage per power unit for private and for-hire carriers. Analysis of MCMIS 

data used for the present study show that the average mileage per power unit is more than five 

times greater for those in for-hire fleets than for those in private fleets. 

Literature – General Safety Performance 

The literature cited in this section does not distinguish between private and for-hire fleets, but 

provides some insight into key issues that may differ between the two types of fleets, such as 

carrier financial performance and driver characteristics and their influence on safety. For 

example, Gary Petty, of the National Private Truck Council (NPTC) believes that “the pay is 

usually better in private fleets and working conditions are better” (Bradley 2005). 

A study examined the connection between motor carriers’ safety performance and financial 

performance from several key for-hire industry segments (Corsi, 2002a). Private carriers were 

not included in the analysis. Financial data were collected from the reports filed with the Bureau 

of Transportation Statistics (BTS) for 1999 by large, for-hire motor carriers with adjusted annual 

operating revenues of $3 million or more. Safety performance data were collected from MCMIS 

data for 2000. 

Compliance review results were compared to the financial variables to determine if fleets with 

satisfactory ratings had better financial performance. Safety variables were examined to 

determine if they were correlated with financial performance measures. The research showed 

that firms with higher gross revenues were likely to have lower driver inspection indicator (DII) 

scores and lower driver SEA scores, indicating better driver safety performance. Carriers with 

higher average hauls were likely to have higher DII scores and higher driver SEA scores, 

indicating poorer driver safety performance. Driver wages tended to be negatively linked with 

DII scores and driver SEA scores. 

In addition to Corsi (2002a), a number of papers illustrate that the firms having the most crashes 

also seem to be the ones in the most financial peril (Beard, 1992 and Rodriguez, 2004). More 

successful trucking companies have the financial ability to ensure that equipment is up to date 

and up to standards. Rodriguez also tied safety to driver hiring and training. The most successful 

trucking companies, in terms of safety, have a more stringent screening process in hiring, 

emphasizing pre-service and in-service training for drivers, and using a variety of different 

rewards to encourage safe driving performance (Mejza, 2003). 

Since insurers are dedicated to recognizing and reducing risk for their clients, they have helpful 

insights on how to improve fleet safety for higher bottom-line revenues. Since 1996, Liberty 

Mutual has conducted benchmark evaluations and studied best practices to identify the safest 
 2-6 

fleets. Their work looks at the effects of training, monitoring, and feedback; incentives; driver 

selection management policies and practices; and private vs. for-hire operations (Leavitt, 2005). 

Leavitt indicates that good training is essential. However, those carriers that focused their safety 

program entirely on training did not see positive results, because many accidents are caused by 

drivers’ habits and practices rather than lack of knowledge. The best fleets set clear performance 

expectations and continuously monitor driver performance. They encouraged fleets to download 

engine control module (ECM) data at every service. Companies that did this had 34 percent 

better crash frequency rates and 50 percent lower crash costs. Driver monitoring is as important 

as training. According to Leavitt, driver selection, training, and management commitment to 

safety, monitoring driver performance and following-up have the greatest impact on safety. 

A study by the ATRI statistically proved, based on an analysis of 540,000 driver records, that 

there is a strong relationship between prior driving history and future crash likelihood. For 

example, for drivers that have been convicted of (a) improper or erratic lane change, (b) failure 

to yield right of way, (c) improper turn, or (d) failure to maintain proper lane, the likelihood of a 

future crash increases between 91 and 100 percent. A reckless driving violation increases the risk 

of a future crash by 325 percent (ATRI, 2005). 

However, offering drivers incentives does not reduce accidents or encourage safe driving. 

According to insurers, it is better to do without than to hire a high-risk driver. Fleets whose road 

tests were 2 hours or longer as part of their driver selection process had a 45 percent lower crash 

frequency and 23 percent lower crash costs. Carriers that used planned routes had 38 percent 

lower crash costs. Furthermore, insurance companies view private fleets as a better risk than forhire carriers, because insurers do not see private fleets as trucking companies. Private fleets also 

tend to carry only their own goods, have more regular routes and far fewer long, over-the-road 

trips, and a more stable driver work force (Leavitt, 2005). 

Finally, the NIOSH report (2003) cited numerous strategies that all carriers (and other 

employers) can implement for preventing crashes. Some of the strategies discussed include 

comprehensive vehicle maintenance programs, delivery schedules and operations that allow for 

preventative maintenance, delivery schedules and operations that allow for drivers to maintain 

safe speeds and follow the hours-of-service regulations, communicating the importance of safety, 

mandated defensive driving instruction, and compensation for time spent conducting safety 

inspections. 

2.2 Insurance Requirements and Costs 

2.2.1 Reports and Documents 

This subsection describes the information obtained on the costs and issues involved in insuring 

commercial motor carriers. None of this information distinguished between for-hire and private 

motor carriers. In the 1980s, insurance companies were realizing high stock returns and were 

able to keep premiums low. However, high loss ratios are no longer tolerable. Larger carriers can 

be rated independently because their size allows a more accurate determination of their loss 
 2-7 

profile, while smaller trucking companies bear a heavier burden because they do not have the 

power to negotiate as well for lower premiums. Smaller carrier rates are often based on their 

specific loss profile, if they have had high losses. (Shepard, 2001). This implies that small 

carriers without significant losses must pay going market rates. 

In the past decade, insurance prices have risen at a steady rate that is typical of the insurance 

industry’s cyclical nature; however, over a three-year period between 2000 and 2003, insurance 

costs rose dramatically, which could include the direct and indirect effects of the September 11, 

2001 terrorist attacks. According to an ATA insurance survey conducted in 2002, average 

insurance costs rose 17 percent for those carriers renewing their policies in 2000 and 32 percent 

for those carriers renewing in 20015 (ATA, 2002). 

Jenks (2005) discusses why insurers are charging such high premiums and how the transit and 

private motor coach industry can best address these high costs. One reason for the very high 

prices is the State Regulatory Commissions that have an assigned risk program. A consumer 

unable to get coverage will go through the state, which will assign them to a licensed group. This 

group must then provide insurance to the consumer. A consumer who cannot obtain coverage 

alone certainly represents a higher risk, to the point where no insurer is willing to take a chance 

on this company. 

Another factor in higher prices is the business cycle itself. Businesses inevitably go into a period 

of recession and insurance prices typically will rise. Jenks states that the transit industry, which 

is typically funded by the public and usually has enough money to self-insure, will generally 

accept very high deductibles. However, for-hire contractors providing transit services are not 

financially secure enough to self-insure, probably are not large enough to enter a risk retention 

pool that is funded by a group of transporters, and, unlike government providers, can be sued. 

Therefore, these companies are almost required to buy from a third party. 

Jenks also states that the Federal government’s regulations on minimum financial responsibility 

were used as a barrier to entry. The requirement for maintaining financial responsibility as used 

as a safety measure, based on the belief that with such high minimums, companies that operated 

on a shoe-string budget would be forced out of the market. However, beginning in the 1980s, 

even high-risk operators usually have been able to find insurance. 

Still referring to passenger transportation, Jenks reports that recently, insurance premiums have 

increased significantly, not because of higher risk, but simply because judgments6

 have been 

rising. Reaction to this rise in prices for the companies that survived was simply to raise fare 

prices for passengers, but some companies could not endure the price change and simply went 

out of business. A reduction of services also has occurred; to lower liability, many door-to-door 

passenger services have recently gone to curb-to-curb. 

The high cost of insurance led large trucking companies to explore other insurance methods, 

which is a typical response when the market hardens and premiums rise. Captives and risk 

 

5

 The overall average for 2001 was 32 percent; it was 30 percent prior to September 11, 2001 and 37 percent after 

September 11, 2001. 

6

 The article did not address out-of-court settlements. 
 2-8 

retention have become appealing insurance situations for trucking companies (Vise, 2003). A 

captive is an arrangement in which several companies join forces to create an entity that acts as 

an insurance company and share in the risks of all the companies. This method has become 

popular because of the high cost of insurance, but also because the companies receive interest 

from costs not expended on accident payments. 

Another similar method is risk-retention groups, which feature some advantages, such as 

avoiding the law prohibiting a volume discount on insurance, but also has some drawbacks such 

as covering only third-party liability and not shielding all group members from joint liability 

(Vise, 2003). 

A number of sources provided insights into the costs for insurance for different groups of private 

motor carriers. The minutes from a meeting of the school board for a private school in Indiana 

indicated their cost to insure a school bus (with an unspecified seating capacity) was 

approximately $660 per year as compared to $500 per year to insure a van (Clear Creek, 2002). 

One insurance company website provides an estimate of $4,600 to $6,000 per truck for annual 

primary liability coverage (InsureMyRig.com, 2006). An online article reported that truck 

insurance premiums rose to $5,500 to $6,000 per truck in 2002, with increased deductibles of 

$25,000 to $50,000 (Memphis Business Journal, 2003). The article reports that one for-hire 

company with 350 trucks was quoted a cost of $350,000 to obtain $2 million in excess insurance 

coverage, which the carrier felt was insufficient coverage, although it well exceeds the Federal 

financial responsibility requirements. This equates to $1,000 per truck for $2 million in excess 

coverage. Another article quotes an underwriter indicating truck insurance rates of $4,500 to 

$5,500 per power unit, depending on the deductible. The underwriter expected these costs to 

reach $6,000 per power unit by the end of 2002 (France, 2002). 

2.2.2 State Private Motor Carrier Insurance Requirements 

The project team attempted to contact the appropriate agencies in all 50 states and the District of 

Columbia regarding sources of information on insurance requirements for private motor carriers 

of passengers and private motor carriers of non-hazardous property. In some cases, information 

was supplemented with searches of official state internet websites. Table 2-2 shows the results of 

this data collection. 

Additionally, the minimum auto liability requirements for each state were determined and 

assumed to apply for all vehicles registered in that state. These requirements are shown in Table 

2-3. The sum of the per-accident and property damage requirements was taken as the combined 

minimum—a comparable number to the single value reported in Table 2-2. Therefore, the 

assumed minimum liability requirements for each state was computed as the maximum of the 

values in Tables 2-2 and 2-3 for each type of operation and are shown in Table 2-4. For example, 

the minimum requirements for passenger vehicles carrying 9 to 15 passengers in Alabama in 

Table 2-4 is $50,000 ($40,000 + $10,000, from Table 2-3) and the minimum requirements for 

non-hazardous property carriers in Arizona is $750,000 (from Table 2-2). 
 2-9 

2.2.3 Cost of Insurance 

Data also were desired on the cost of insurance for private motor carriers. A matrix that would 

allow insurance costs or rates to be provided for up to 12 scenarios for each type of motor carrier 

operation was developed. This matrix included the following fields: 

 driver type: full-time, professional, or part-time 

 for-profit or not-for-profit 

 operating range: 50 miles or less, 51 to 200 miles, or more than 200 miles. 

Insurers were asked to estimate costs for the equivalent levels of coverage as interstate for-hire 

carriers and use fleet sizes of 10 vehicles for passenger carriers and 6 vehicles for non-hazardous 

property carriers. Alternatively, insurers were asked to provide a single per-power unit estimated 

average nationwide cost for each type of motor carrier if it was not possible to provide more 

detailed estimates. 

No insurance company contacted for this initial data collection effort was willing to provide any 

such data. In addition, the Property Casualty Insurers Association of America asked their 

membership if they would be willing to provide assistance, and if so, to contact the project team. 

No data were received. However, several insurance companies that participated in stakeholder 

interviews were able to provide some high-level data and this input is described in Section 4.2. 

To augment the limited information collected through the stakeholder interviews, the project 

team solicited insurance cost data from private motor carriers. A sample of about 100 private 

motor carriers were randomly selected from the MCMIS Census File and then manually 

stratified to ensure representation across the various categories and fleet sizes of the carriers. For 

carriers with missing contact information in MCMIS, the Safety and Fitness Electronic Records 

(SAFER) System was used to obtain the contact information. 
 2-10 

Table 2-2. State Insurance Requirements for Private Motor Carriers 

Type of Operation 

Passenger (by max. vehicle capacity) 

Private vs. 

For-hire 

State 

9 to 15 Pass. Veh. 

(A) 

16 or more Pass. Veh. 

(B) 

Property 

(non-hazardous) (C) A B C 

Notes 

AL 

AK 

AZ $750,000 1 

AR 

CA $750,000 2 

CO $1,500,000 $5,000,000 $750,000 

CT $1,500,000 $5,000,000 $750,000 

DE 

DC 

FL $350,000 $350,000 $300,000 3 

GA 

HI 

ID 

IL 

IN 

IA $1,500,000 $5,000,000 $300,000 

KS $350,000 $350,000 $350,000 

KY 

LA $1,500,000 $5,000,000 $750,000 

ME 

MD $250,000 $500,000 $750,000 4 

MA 

MI $1,500,000 $5,000,000 $750,000 

MN 

MS $1,500,000 $5,000,000 $750,000 

MO 

MT 

NE $1,500,000 $5,000,000 $750,000 

NV $1,000,000 

NH 

NJ 

NM 

NY 

NC $1,500,000 $5,000,000 $1,000,000 5 

ND 

OH 

OK $1,000,000 $5,000,000 $750,000 5 

OR $750,000 5 

PA 

RI 

SC 
 2-11 

Table 2-2. State Insurance Requirements for Private Motor Carriers (continued) 

Type of Operation 

Passenger (by max. vehicle capacity) 

Private vs. 

For-hire 

State 

9 to 15 Pass. Veh. 

(A) 

16 or more Pass. Veh. 

(B) 

Property 

(non-hazardous) (C) A B C 

Notes 

SD 

TN $1,500,000 $5,000,000 $750,000 

TX $5,000,000 $500,000 5,6

UT 

VT $300,000 $400,000 $50,000 7 

VA $1,500,000 $5,000,000 $750,000 8 

WA 

WV 

WI 

WY $500,000 $500,000 $500,000 

Key: 

 = private carriers have no specific insurance requirements 

 = private carriers have lower insurance requirements than interstate for-hire carriers 

 = private carriers have the same insurance requirements as interstate for-hire carriers 

 = private carriers have higher insurance requirements than interstate for-hire carriers 

1

 $300,000 for property-carrying vehicles weighing between 20,001 and 26,000 lbs. 2

 Limits are higher for passenger operations if they are youth-camp related. 3

 $50,000 for property-carrying vehicles from 26,000 to 35,000 lbs; $100,000 for vehicles up to 44,000 

lbs; $300,000 for vehicles over 44,000 lbs. 

4

 The passenger vehicle categories are 8-14 passengers and 15 or more passengers. 

5

 For property-carrying vehicles weighing over 26,000 lbs. 

6

 $500,000 for 16-25 passenger buses. 

7

 $300,000 for 8-12 passenger vehicles; $350,000 for 13-20 passenger vehicles; $400,000 for 

vehicles that can carry 21 or more passengers. 8

 Lower threshold is 7 passengers. 
 2-12 

Table 2-3. State Insurance Requirements for all Vehicles 

General Motor Vehicle Insurance Requirements* 

State Per-person Per-accident Property Damage 

AL $20,000 $40,000 $10,000 

AK $50,000 $100,000 $25,000 

AZ $15,000 $30,000 $10,000 

AR $25,000 $50,000 $25,000 

CA $15,000 $30,000 $5,000 

CO $25,000 $50,000 $15,000 

CT $20,000 $40,000 $10,000 

DE $15,000 $30,000 $10,000 

DC $25,000 $50,000 $10,000 

FL $10,000 $20,000 $10,000 

GA $25,000 $50,000 $25,000 

HI $20,000 $40,000 $10,000 

ID $25,000 $50,000 $15,000 

IL $20,000 $40,000 $15,000 

IN $25,000 $50,000 $10,000 

IA $20,000 $40,000 $15,000 

KS $25,000 $50,000 $10,000 

KY $25,000 $50,000 $10,000 

LA $10,000 $20,000 $10,000 

ME $50,000 $100,000 $25,000 

MD $20,000 $40,000 $15,000 

MA $20,000 $40,000 $5,000 

MI $20,000 $40,000 $10,000 

MN $30,000 $60,000 $10,000 

MS $10,000 $20,000 $5,000 

MO $25,000 $50,000 $10,000 

MT $25,000 $50,000 $10,000 

NE $25,000 $50,000 $25,000 

NV $15,000 $30,000 $10,000 

NH $25,000 $50,000 $25,000 

NJ $15,000 $30,000 $5,000 

NM $25,000 $50,000 $10,000 

NY $25,000 $50,000 $10,000 

NC $30,000 $60,000 $25,000 

ND $25,000 $50,000 $25,000 

OH $12,500 $25,000 $7,500 

OK $10,000 $20,000 $10,000 

OR $25,000 $50,000 $10,000 

PA $15,000 $30,000 $5,000 

RI $25,000 $50,000 $25,000 

SC $15,000 $30,000 $10,000 
 2-13 

Table 2-3. State Insurance Requirements for all Vehicles (continued) 

General Motor Vehicle Insurance Requirements* 

State Per-person Per-accident Property Damage 

SD $25,000 $50,000 $25,000 

TN $25,000 $50,000 $10,000 

TX $20,000 $40,000 $15,000 

UT $25,000 $50,000 $15,000 

VT $25,000 $50,000 $10,000 

VA $25,000 $50,000 $20,000 

WA $25,000 $50,000 $10,000 

WV $20,000 $40,000 $10,000 

WI $25,000 $50,000 $10,000 

WY $25,000 $50,000 $20,000 

*Obtained from http://info.insure.com/auto/minimum.html.

The research team was ultimately successful in reaching two insurance companies willing to 

discuss rates. These insurance companies provided rates for private carriers under the 

assumptions that the 9-15 passenger vehicle and bus operators would be either a school or church 

group and that the truck operator would be a private, for-profit company. In each case, average 

conditions (e.g., annual miles traveled, accident history, and other risk factors) were assumed. 

The insurance companies provided quotes for varying public liability coverage levels from 

$50,000 to $2,000,000. Rates quoted are shown in Table 2-6. Note that the rates quoted for 9-15 

passenger vehicles and buses are identical. When pressed on the quoted rates, one insurance 

agent noted that his company offered lower rates for passenger vehicles with a capacity of less 

than 15 passengers but that a 9-15 passenger vehicle would receive the same rates as those paid 

for 16+ passenger buses. Another agent noted that the rates for 9-15 passenger vehicles would 

be relatively higher than those for buses due to the historical performance and accident rates for 

these vehicles. 
 2-14 

Table 2-4. Effective State Insurance Requirements for Private Motor Carriers 

General Motor Vehicle Insurance Requirements* 

State Per-person Per-accident Property Damage 

AL $50,000 $50,000 $50,000 

AK $125,000 $125,000 $125,000 

AZ $40,000 $40,000 $750,000 

AR $75,000 $75,000 $75,000 

CA $35,000 $35,000 $750,000 

CO $1,500,000 $5,000,000 $750,000 

CT $1,500,000 $5,000,000 $750,000 

DE $40,000 $40,000 $40,000 

DC $60,000 $60,000 $60,000 

FL $350,000 $350,000 $300,000 

GA $75,000 $75,000 $75,000 

HI $50,000 $50,000 $50,000 

ID $65,000 $65,000 $65,000 

IL $55,000 $55,000 $55,000 

IN $60,000 $60,000 $60,000 

IA $1,500,000 $5,000,000 $300,000 

KS $350,000 $350,000 $350,000 

KY $60,000 $60,000 $60,000 

LA $1,500,000 $5,000,000 $750,000 

ME $125,000 $125,000 $125,000 

MD $250,000 $500,000 $750,000 

MA $45,000 $45,000 $45,000 

MI $1,500,000 $5,000,000 $750,000 

MN $70,000 $70,000 $70,000 

MS $1,500,000 $5,000,000 $750,000 

MO $60,000 $60,000 $60,000 

MT $60,000 $60,000 $60,000 

NE $1,500,000 $5,000,000 $750,000 

NV $40,000 $40,000 $1,000,000 

NH $75,000 $75,000 $75,000 

NJ $35,000 $35,000 $35,000 

NM $60,000 $60,000 $60,000 

NY $60,000 $60,000 $60,000 

NC $1,500,000 $5,000,000 $1,000,000 

ND $75,000 $75,000 $75,000 

OH $32,500 $32,500 $32,500 

OK $1,000,000 $5,000,000 $750,000 

OR $60,000 $60,000 $750,000 

PA $35,000 $35,000 $35,000 

RI $75,000 $75,000 $75,000 

SC $40,000 $40,000 $40,000 
 2-15 

Table 2-4. Effective State Insurance Requirements for Private Motor Carriers 

(continued) 

General Motor Vehicle Insurance Requirements* 

State Per-person Per-accident Property Damage 

SD $75,000 $75,000 $75,000 

TN $1,500,000 $5,000,000 $750,000 

TX $55,000 $5,000,000 $500,000 

UT $65,000 $65,000 $65,000 

VT $300,000 $400,000 $60,000 

VA $1,500,000 $5,000,000 $750,000 

WA $60,000 $60,000 $60,000 

WV $50,000 $50,000 $50,000 

WI $60,000 $60,000 $60,000 

WY $500,000 $500,000 $500,000 

Table 2-5. Insurance Cost Data from Private Motor Carriers 

Type Fleet Size* Insurance 

Type 

Coverage 

($) 

Obtained 

from 

Cost of Insurance 

(per vehicle per 

year) 

9-15 passenger vehicle operators 

Private Group 12 to 14 Vehicle $1,000,000 Ins. Co. $1,000 

School 1 Umbrella $1,500,000 Ins. Co. $3,100 

16+ passenger vehicle operators 

Church 4 to 6 Vehicle $5,000,000 Ins. Co. $1,000 

Church 1 Vehicle $60,000 Ins. Co. $800 

School 12 to 14 Umbrella $60,000 Ins. Co. $800-$1,200 

non-hazardous property carriers 

Manufacturingoriented Business 1 Not 

available $50,000 Ins. Co. $1,600 

Retail-oriented 

Business 7 to 8 Vehicle Not 

Available Ins. Co. $800 

Retail-oriented 

Business 201 to 300 Umbrella $850,000 – 

$1,000,0000 Self-Insured No monthly or 

yearly cost 

Service-oriented 

Business 4 to 6 Umbrella $55,000 Ins. Co. $1,500 

* Based on the Fleet Size Codes used in MCMIS; used to help preserve carrier anonymity. 
 2-16 

Table 2-6. Insurance Cost Data from Insurance Companies 

Coverage Level 9-15 Passenger 

Vehicles Buses Trucks 

$50,000 $1,847 $1,847 $4,600 

$100,000 $2,067 $2,067 

$200,000 $5,031 

$300,000 $2,328 $2,328 

$500,000 $2,594 $2,594 $5,500 

$1,000,000 $3,180 $3,180 $6,500 

$2,000,000 $3,700 $3,700 

2.3 Economic Analysis 

The following subsection briefly describes the few references that were most important for the 

economic analysis of the cost and benefits of extending minimum financial responsibility 

requirements to private motor carriers. 

 “The Economic Cost of Motor Vehicle Crashes, 2000” estimates the economic cost of all motor 

vehicle crashes in the United States in 2000 at $230.6 billion (Blincoe et al, 2002). This study 

monetizes the costs associated with 41,821 fatalities, 5.3 million non-fatal injuries, and 28 

million damaged vehicles. The study includes a number of cost elements: (a) productivity losses, 

(b) property damage, (c) medical costs, (d) rehabilitation costs, (e) travel delay, (f) legal and 

court costs, (g) emergency services, (h) insurance administration costs, and (i) costs to 

employers. The costs include those associated with both police-reported and unreported crashes. 

The crash costs are stratified by severity according to the Abbreviated Injury Scale. 

 “Revised Costs of Large Truck- and Bus-Involved Crashes,” prepared by the Pacific Institute for 

Research and Evaluation for the Federal Motor Carrier Safety Administration, documents the 

costs associated with large truck- and bus-involved crashes (Zaloshnja, 2002). More specifically, 

the report estimates the dollar value cost per crash, victim injured, or fatality incurred as a result 

of large truck- and bus-involved crashes. The cost elements examined in the study includes: 

medical related (e.g., hospital, rehabilitation), emergency services, property damage, lost 

productivity (e.g., crash investigation, lost wages, recruiting and training replacement workers) 

and lost quality of life (e.g., pain and suffering). The costs associated with crashes are 

differentiated based on crash severity, ranging from no injury to fatality, and by vehicle class, 

including straight trucks, truck-tractor combinations, and buses. The cost of police-reported 

crashes involving large trucks with a gross vehicle weight rating in excess of 10,000 pounds 

averaged $59,153 (2000 dollars). The cost of police-reported crashes involving buses averaged 

$32,548. These costs are reported from a societal perspective. 

In “The Economic Burden of Traffic Crashes on Employers,” NHTSA (2003) found that traffic 

crashes occurring on the job resulted in 2,100 fatalities and 353,000 injuries annually during the 

1998-2000 timeframe. Further, job-related vehicle crashes accounted for nearly 6.5 percent of all 

crash injuries. The study estimates the economic burden of traffic crashes on employers, 
 2-17 

including health-related fringe benefits costs, employer health care costs, sick leave, life, and 

disability insurance for employees involved in crashes and wage-risk premiums. These cost 

elements amounted to nearly $60 billion in annual costs to employers in the United States during 

the 1998-2000 time frame. This study estimates costs to employers by state. The costs to 

employers in California and New York were highest, topping $3.5 billion in each state. It also 

examines the costs associated with crashes involving an alcohol-impaired driver and passengers 

that are not using restraining devices. Finally, the study breaks down cost by industry, estimating 

the highest costs in the land transportation, construction, mining, and agriculture sectors. This 

study was examined to understand further the costs associated with heavy truck and passenger 

vehicle crashes and to validate some of the estimates presented in Zaloshnja (2002) but was not 

directly used to monetize the cost savings associated with avoiding crashes.
 3-1 

3.0 INTERVIEWS WITH STATE AGENCIES

As described in Section 1.0, published literature was sought concerning the safety, insurance 

requirements, and costs of transportation provided by private motor carriers of passengers and by 

private motor carriers of non-hazardous property. Since availability of this type of information in 

the open literature was expected to be limited, a parallel effort involving state data collection was 

undertaken. The intent of the collection was two-fold: (1) to gather data unavailable from the 

literature search or database analysis, and (2) to corroborate the limited information that was 

available. The information from the surveys was then used in the economic and safety analyses. 

Initial state contacts were provided by the CVSA, a project team member, and augmented with 

contacts identified through state websites. 

Nine state agencies were interviewed concerning the safety and current insurance and 

insurability situations of private motor carriers operating in their jurisdictions. The project team 

sought to conduct interviews with officials in State Departments of Public Safety or State Police 

and State Insurance Commissioners or equivalent state agencies to represent a cross-section of 

those with significant numbers of private motor carriers, geographical diversity, and other 

parameters. 

FMCSA requested that California, Illinois, New York, and Texas be included in the interview 

process. Other states were selected to represent a geographically diverse interview pool that 

included Colorado, Florida, Ohio, Virginia, and Washington. The specific organizations in each 

state are identified in Table 3-1. 

Table 3-1. State Agencies Interviewed 

State Agencies Interviewed 

California Highway Patrol – Commercial Vehicle Section 

Colorado Public Utilities Commission 

Florida Department of Transportation 

Illinois Department of Transportation 

Commerce Commission 

New York Department of Transportation 

Ohio Department of Public Safety 

State Highway Patrol 

Texas Department of Transportation 

Department of Safety – Texas Highway Patrol 

Virginia State Police 

Washington State Patrol – Commercial Vehicle Division 

Interviews were conducted by telephone, facilitated by advance distribution of interview topics 

and questions, where appropriate. Most organizations needed time following the interview calls 

to research specific safety and insurance data questions posed during the interviews that could 

not be adequately answered during the interview call. The project team then followed-up with 

these agencies to collect the data and information. 
 3-2 

3.1 Safety Issues 

The state agencies participating in the interviews were not able to distinguish a difference in the 

safety record for private carriers as compared to for-hire carriers or private carriers operating 

interstate and those operating wholly intrastate. Only two states were able to provide any 

specific safety information. The research team had difficulty in contacting the proper individuals 

within the correct state agencies. Each state agency was set up uniquely for that state. Initial 

contacts were generally not able to find the requested safety information. Even when the correct 

agency and individual were identified, in many cases, the requested information and data did not 

exist or could not be located. 

The California Highway Patrol (CHP) reported that it has statewide authority to inspect all 

regulated vehicles (with a gross vehicle weight rating of more than 10,000 pounds) in 

maintenance facilities or terminals, as well as any records relating to the dispatch of vehicles or 

drivers and the pay of drivers to assure compliance with state laws and regulations. This 

authority includes all motor carriers of property or passengers without regard to the capacity of 

the bus; the hazardous nature of the property transported; or whether the motor carrier is a 

private motor carrier or for-hire. 

While the CHP does not specifically record the type of each vehicle inspected, the result of each 

terminal or carrier inspection is entered into the CHP database (Management Information System 

of Terminal Evaluation Records [MISTER]). This database includes carrier information; 

terminal information; current terminal ratings, current carrier ratings, and rating history; and 

emergency contact information. Provided the operator is using vehicles that seat more than 10 

passengers, including the driver, these terminal operations are part of the CHP’s overall 

inspection program. Because neither the seating capacity of the vehicle or the for-hire status of 

the motor carrier is documented during a terminal inspection, no specific statistical information 

is available to identify relational patterns between different passenger vehicle types or private 

and for-hire motor carriers. 

The CHP reported that the only operational difference that could be identified in their records 

was that approximately 22 percent of motor carriers transporting non-hazardous commodities 

were rated unsatisfactory during the 2005 calendar year versus approximately 13 percent for 

motor carrier terminals transporting hazardous materials during that same period. While there are 

differences between interstate and California intrastate regulations, those differences are 

primarily limited to the compatibility differences permitted by 49 CFR, Parts 350 and 355, 

allowing commercial motor vehicle drivers to operate on the road 12 hours a day on intrastate 

trips in California. Any operational differences are not considered as a part of industry 

regulation. The CHP exercises regulatory oversight based on the type of vehicle being operated, 

not necessarily on the operation or range of operation of the motor carrier. 

Commercial vehicle safety in Texas is a high-visibility issue. Travel on Texas roadways has 

increased each year, especially since the passage of the North American Free Trade Act in 1991. 

Texas state officials reported that Texas ranked first in the nation with 459 fatal large truck 
 3-3 

crashes in 2001—another reason for increased attention on commercial vehicles. 7 The Texas 

state inspection form differentiates between 9-15 and over 15 passenger vehicles. Detailed crash 

records are kept in Texas for trucks over 10,000 lbs and passenger vans with a seating capacity 

greater than 15. These data are uploaded to MCMIS and are, therefore, included in the analysis 

presented in Section 5.3. The project team worked with The Texas Department of Public Safety, 

but was unable to extract differences for for-hire and private carrier safety statistics. 

3.1.1 Private versus For-hire Carriers 

There was no noted safety difference between private versus for-hire carriers, according to the 

interviewed state agencies. It is possible that a difference may exist, but no agencies could find 

or knew of data that could support such an analysis. State agencies were unable to find any data 

or information to identify any documented difference in safety between for-hire and private 

carriers. 

3.2 Insurance Requirements and Insurability 

3.2.1 Insurance Requirements 

One of the primary objectives of interviewing state agencies was to determine precise minimum 

levels of financial responsibility for private motor carriers. The interviewed state agencies 

provided the project team with the minimum levels of insurance required to satisfy state 

requirements for private carriers, including passenger carriers. There is a vast difference in the 

way that states choose to apply regulations regarding insurance requirements for private 

commercial motor carriers operating in their jurisdiction. Some states had specific requirements 

for private carriers such California, Colorado, and Florida. Some had no state-mandated 

requirements such Florida, Illinois, and Ohio. Other states hold private motor carriers to 

financial responsibility limits that are identical for all private motor vehicles, such as Texas and 

Virginia. This provided a good cross-section of state insurance requirements. 

Table 3-2 shows the minimum financial responsibility state requirements for private carriers for 

the nine interviewed states participating in this research project. 

Another objective of interviewing state regulatory agencies was to characterize the extent to 

which private carriers are subject to the same or different state minimum financial responsibility 

rules as for-hire carriers. For-hire carriers have mandated minimum levels of financial 

responsibility in all states. 

 

7

 Texas continued to record more fatal large truck crashes than any other state each year through 2004 (FMCSA, 

2005b), with 383 fatal large truck crashes in 2004. 
 3-4 

Table 3-2. State Private Carrier Insurance Requirements 

State 9-15 Passengers 16 or more Passengers Non-HAZMAT Cargo 

California 

$15,000 bodily injury per 

person, $30,000 bodily injury 

per accident, $5,000 

property damage per 

accident. 

$15,000 bodily injury per 

person, $30,000 bodily injury 

per accident, $5,000 

property damage per 

accident. 

$300,000 under 10,000 

lbs., $750,000 over 10,000 

lbs. 

Colorado 

$25,000 because of bodily 

injury to or death of one 

person in any one accident, 

in the amount of $50,000 

because of bodily injury to or 

death of two or more 

persons in any one accident, 

and in the amount of 

$15,000 because of injury to 

property of others in any one 

accident. 

$25,000 because of bodily 

injury to or death of one 

person in any one accident, 

in the amount of $50,000 

because of bodily injury to or 

death of two or more 

persons in any one accident, 

and in the amount of 

$15,000 because of injury to 

property of others in any one 

accident. 

$25,000 because of bodily 

injury to or death of one 

person in any one accident, 

in the amount of $50,000 

because of bodily injury to 

or death of two or more 

persons in any one 

accident, and in the amount 

of $15,000 because of 

injury to property of others 

in any one accident. 

Florida 

Non-public sector buses: 

$100,000 bodily injury per 

person; $300,000 bodily 

injury per accident; $50,000 

property damage per 

accident. 

Non-public sector buses: 

$100,000 bodily injury per 

person; $300,000 bodily 

injury per accident; $50,000 

property damage per 

accident. 

$50,000 for 26-35,000 lbs. 

$100,000 for 35-44,000 lbs. 

$300,000 for 44,000+ lbs. 

Illinois 

$20,000 because of bodily 

injury to or death of one 

person in any one accident, 

in the amount of $40,000 

because of bodily injury to or 

death of two or more 

persons in any one accident, 

and in the amount of 

$15,000 because of injury to 

property of others in any one 

accident. 

$20,000 because of bodily 

injury to or death of one 

person in any one accident, 

in the amount of $40,000 

because of bodily injury to or 

death of two or more 

persons in any one accident, 

and in the amount of 

$15,000 because of injury to 

property of others in any one 

accident. 

$20,000 because of bodily 

injury to or death of one 

person in any one accident, 

in the amount of $40,000 

because of bodily injury to 

or death of two or more 

persons in any one 

accident, and in the amount 

of $15,000 because of 

injury to property of others 

in any one accident. 

New York 

$25,000 bodily injury per 

person, $50,000 bodily injury 

per accident, $10,000 

property damage per 

accident. 

$25,000 bodily injury per 

person, $50,000 bodily injury 

per accident, $10,000 

property damage per 

accident. 

$300,000 under 10,000 

lbs., $750,000 over 10,000 

lbs. 

Ohio None 

$12,500 because of bodily 

injury to or death of one 

person in any one accident, 

in the amount of $25,000 

because of bodily injury to or 

death of two or more 

persons in any one accident, 

and in the amount of $7,500 

because of injury to property 

of others in any one 

accident. 

$12,500 because of bodily 

injury to or death of one 

person in any one accident, 

in the amount of $25,000 

because of bodily injury to 

or death of two or more 

persons in any one 

accident, and in the amount 

of $7,500 because of injury 

to property of others in any 

one accident. 
 3-5 

Table 3-2. State Private Carrier Insurance Requirements (continued) 

State 9-15 Passengers 16 or more Passengers Non-HAZMAT Cargo 

Texas None 

$500,000 for 15-25 

passengers, $1,500,000 for 

greater than 25 

$500,000 for commercial 

motor vehicles including 

tow trucks with gross 

vehicle weight in excess of 

26,000 lbs. 

Virginia $1,500,000 $5,000,000 $750,000 

Washington 

None, 9-15 Passengers 

Non-Profit: $100,000 each 

person, $500,000 each 

accident, $50,000 property 

damage or $500,000 

Combined Single Limit 

(CSL). 

None, 16 or more 

Passengers Non-Profit: 

$100,000 each person, 

$1,000,000 each accident, 

$50,000 property damage or 

$1,000,000 CSL. 

A vehicle under 10,000 lbs 

GVWR is $300,000 CSL. 

Vehicles over 10,000 lbs 

GVWR are $750,000 CSL. 

Table 3-3 compares the financial responsibility state requirements for private carriers versus forhire carriers for the nine interviewed states. 

Table 3-3. State Private versus For-hire Carrier Financial Responsibility Requirements 

State Private Versus For-Hire Carrier Financial Responsibility Requirements 

California Private passenger carriers have different requirements than for-hire carriers. Private property 

carriers have the same requirements as for-hire carriers. 

Colorado Private motor carriers have different requirements than for-hire carriers. 

Florida Private carriers have same requirements as for-hire carriers. 

Illinois Private carriers have no specific minimum financial requirements. Private carriers must meet 

the same minimum financial responsibility as passenger automobiles. 

New York Private passenger carriers have no state financial responsibility requirements. For-hire nonhazardous property follows the Federal requirements. 

Ohio 

Private carriers have no specific minimum financial requirements. Private carriers must meet 

the same minimum financial responsibility as passenger automobiles for >16 passenger 

vehicles and non-hazardous property carriers. 

Texas Private carriers have same requirements as for-hire carriers. 

Virginia Private carriers have same requirements as for-hire carriers. 

Washington Private passenger carriers have no state financial responsibility requirements except for nonprofit passenger carriers. For-hire non-hazardous property follows the Federal requirements. 

3.2.2 Insurability 

Based on the surveys conducted with various state agencies, the only meaningful issues in 

obtaining insurance for a motor carrier are the amount of their premium, deductibles built into 

their policy, and their level of coverage. Carriers can get insurance coverage; it is just a question 
 3-6 

of what a commercial motor carrier will pay for either the legally required limits or higher levels 

to further protect their business. 

During most of the previous decade, commercial motor carrier liability insurance rates increased 

so much that many trucking companies implemented or increased deductibles in an effort to keep 

costs in line. Some large carriers have aggregate liability deductibles as high as $250,000. The 

insurance market for motor carriers appears to have become more favorable during recent years. 

State agencies estimate that liability rates seem to be taking a slight downward trend of perhaps 5 

percent from a year ago for liability coverage. 

As the literature shows, motor carrier insurance rates, and even their insurability, are very 

dependent on their safety profile. State officials indicated that most commercial motor carriers 

are encouraging a meaningful commitment to safety from all company employees and most 

importantly from the drivers. Often, safety-related incentive programs help to reward the focus 

on safety. Companies that run safety incentive programs show a reduction in the incidence of 

insurance claims, workers’ compensation claims, and crashes. One element to an overall safety 

program is thorough and accurate driver employment screening. State agency safety officials 

mentioned that commercial motor carriers need to check the driving records of all potential 

employees. The commercial motor carrier must screen out drivers who have poor driving records 

since they are most likely to cause problems in the future. The drivers’ motor vehicle records 

should be reviewed periodically to ensure that each driver maintains a good driving record. This 

enables commercial motor carriers to lower their premium and total expenditures for obtaining 

minimum levels of required public liability insurance and may allow that commercial motor 

carrier to carry much higher levels of public liability insurance than the mandated minimum 

amounts. 
 4-1 

4.0 INTERVIEWS WITH STAKEHOLDERS

In addition to the interviews with state officials, additional data and information were sought 

from other stakeholders to augment or corroborate the information already obtained. The specific 

information desired included carrier safety; insurability; insurance pricing, coverage and 

acquisition; and certain crash cost information. The targeted groups for these interviews included 

representative industry associations; however, it became apparent that the detailed information 

sought was more readily available from insurance companies and private motor carriers, and it 

was these groups that were the focus of the interviews. As with the state agency interviews, these 

interviews were conducted with the help of questions e-mailed to the respondents in order to 

facilitate response. 

Ultimately, nine interviews were conducted with three insurance providers, one insurance broker, 

one industry association (NPTC), the American Insurance Association (AIA), and three private 

motor carriers. The three carriers covered the three types studied in this effort, a youth 

organization operating two 15-passenger vans, a private university operating 26 buses (as well as 

seven vans), and a retailer operating one tractor and seven straight trucks. 

Other organizations that were considered for interviews included the Community Transportation 

Association of America, the National Safety Council, and the Property Casualty Insurers 

Association of America. However, initial discussions with them during the literature search 

phase of the project revealed that they would not be able to provide the specific information 

sought during the interviews. These organizations did, however, provide useful information and 

guidance regarding other sources of information. 

In each of the subsections below, comments that apply to all private carriers are followed by 

comments specific to the three types of motor carrier. 

4.1 Safety of Private Motor Carriers 

There was some disagreement among the insurers about the relative safety of private versus forhire carriers. One insurer stated that there are no safety differences based solely on whether a 

motor carrier is for-hire or private. Another believed that private carriers are generally safer than 

for-hire carriers because they have a greater degree of management control and the transportation 

aspect is part of a larger organization. One insurer felt that private carriers are not as well 

organized for safety (e.g., policies, procedures) as for-hire carriers because the transportation 

function is separate from the primary business of the organization. The NPTC indicated that 

there are no definitive studies showing any evidence that private carriers are safer than for-hire 

carriers. The losses experienced by a private carrier can be more predictable than those for a forhire carrier. This variability in loss experienced from one year to the next was the primary reason 

an insurer (one not interviewed for this project) chose to exit the for-hire insurance business, the 

project team was told. One insurer indicated that studies by insurance companies have shown 

that the healthier the financial condition of the carrier, the safer the carrier’s operations. Insurers 

consider this as one of their risk factors. The insurance broker indicated that, for private fleets, 

the cost of insurance is what drives their safety efforts. 
 4-2 

Operating 9-15 passenger vehicles 

Insurance providers have found that safety for 9-15 passenger vehicles varies based on the 

company’s management and commitment to safety. One insurer stated that it would no longer 

cover 9-15 passenger vans because of their risk levels. Users of small vans are switching to 

regular minivans (typically up to eight passengers), vehicles with stability control systems (such 

as GMC’s Savana), or to buses. 

Operating 16 or more passenger vehicles 

One insurance company representative relayed the position of the American Bus Association 

(ABA): any organization transporting passengers should obtain the appropriate levels of 

insurance and, therefore, the ABA supports the adoption of consistent financial responsibility 

requirements across all motor carriers. 

Non-hazardous property carriers 

One industry representative stated that FMCSA studies have found that the vast majority of 

crashes are driver-related. The representative premised his comments on differences in operating 

characteristics of private fleets as compared to for-hire fleets. Since private carrier drivers return 

to their point of origin and sleep at home and not on the road more often than for-hire carriers, 

they are exposed to less cumulative fatigue. He felt that since a private carrier’s trucking 

operations are backed by the larger organization, they do a better job of maintaining, training, 

and managing, thereby improving private fleet safety. The NPTC conducted a survey of their 

members in 2003-2004. Of the 67 companies that responded, their reportable accident rates were 

45 percent less than the average from FMCSA for the same period. 

4.2 Pricing of Insurance for Private Motor Carriers 

When setting rates, one insurer did not believe that insurance providers generally differentiate 

between for-hire and private motor carriers. Risk calculations are not based on a private versus 

for-hire classification but rates are highly customized for each carrier. Individual safety records 

are a very important factor. However, other insurers felt differently. One indicated that private 

fleets typically have less exposure (in terms of miles and routes) and are, therefore, cheaper to 

insure than for-hire carriers. One broker estimated that premiums are approximately 25 percent 

lower for private fleets. 

One project team member reported his understanding that, for carriers with less than 20 drivers, 

insurers do not have the same level of comfort and rates on a per power-unit basis are higher. He 

also reported that common self-insurance levels are $500,000, $1 million, and $3 million. 

Insurance companies typically price insurance rates based on exposure, mileage, time constraints 

(such as tight time windows that might have an impact on safety), schedule (such as hours of 

operation), utilization, cargo value, and presence of safety programs. Excellent safety programs 

and records, less exposure, mileage, time constraints, schedule, utilization, and cargo value 
 4-3 

translate into less expense. One private carrier also suggested that rates are dependent on 

previous claims, fleet size, and fleet type. Specific costs for the private carriers interviewed are 

also included in the data collection summary provided in Section 2.2.3. 

Operating 9-15 passenger vehicles 

One carrier revealed that an umbrella contract from a private insurance company costs 

approximately $1,500-$2,000 per year for two 15-passenger vans and one minivan. Another 

carrier revealed that an umbrella contract with liability coverage of $1 million per accident for 

ten 15-passenger vans and 37 cars costs approximately $40,000 per year. 

Non-hazardous property carriers 

According to one insurer, average premiums are $4,000 to $6,000 per truck, but this figure may 

include coverage for vehicle damage. A project team member, for comparison, reported average 

for-hire truck insurance premiums of $4,800 to $5,800 per truck with a deductible of $1,000 to 

$3,000. Well over 70 percent of these premiums can be attributed to public liability insurance, 

which is consistent with the 85-percent figure presented in Section 2.2.3. One medium-sized 

ATA member employs very high deductibles (as a form of self-insurance), and therefore, an 

even greater percentage of its premiums are for public liability insurance. Larger carriers are 

more likely to self-insure. 

4.3 Insurability of Private Motor Carriers 

From the stakeholder responses above, private carriers are often viewed as better risks than forhire carriers because they have a greater extent of management control and are generally part of a 

larger organization. An insurer prefers to insure a private carrier because they generally have 

more financial backing and a greater ability to pay. Insurance companies use the financial 

condition of a carrier as one of the intrinsic risk factors. 

Since excess insurance is now very costly and is an individualized buying decision in the 

absence of uniform regulations, the level of public liability insurance varies by company. 

Smaller carriers with lower exposure typically maintain lower coverage levels. Passenger fleets 

typically carry higher coverage levels. Since there are no standard limits for private motor 

carriers, they purchase a level of insurance that balances the amount they can afford with the 

value of the assets they need to protect. 

Most of those interviewed thought that private carriers could generally obtain the same levels of 

insurance that is required of for-hire carriers. The insurance broker thought it would be much 

easier for private carriers because of their increased ability to utilize umbrella coverage. The 

NPTC has seen no problems with obtaining insurance since the crisis in availability in the mid1980s. The NPTC representative believed that all of their members currently maintain at least 

$1 million in public liability coverage. 
 4-4 

One insurer reported that there are twenty times more insurance companies and ten times more 

insurance brokers willing to offer a policy for a private motor carrier than for a for-hire motor 

carrier. None of the private motor carriers interviewed expressed any problems with their ability 

to obtain insurance. 

4.4 Acquisition of Insurance 

Most motor carriers use insurance companies since insurance is widely available, although some 

carriers self-insure. Passenger carriers have a higher level of exposure due to civil suits 

according to one insurer. In general, the larger the fleet, the larger the deductible required. One 

insurance provider gave the following deductible estimates: 

 Less than 100 power units, no deductible 

 200 power units, $25,000 deductible 

 500 power units, $50,000 - $100,000 deductible 

 1,000 power units, $100,000 - $250,000 deductible 

 Some sizable carriers have multimillion dollar deductibles. 

Underwriters are willing to look at a private fleet as a company with a different, less risky 

exposure, such as manufacturing plants, products, or assets. Therefore, insurance companies and 

brokers are more willing to write private carrier insurance policies than for-hire carrier insurance 

policies. 

The NPTC representative believed it is important to provide the self-insurance ability that forhire carriers currently have if new private carrier financial responsibility requirements are 

implemented. 

At least one insurer stated it will no longer issue new policies for 9-15 passenger vans because 

they are exceedingly dangerous. 

4.5 Affects of Increased Insurance Requirements on Operations 

There would likely be minimal changes in operations if private carriers were required to hold the 

same level of public liability insurance as for-hire carriers. One insurer stated that most private 

carriers are from large companies and currently buy more than the maximum Federal for-hire 

limit for all vehicle types of $5 million. He stated that although there is not a required limit, most 

private carriers carry a realistic limit because it is a good business decision. As previously 

mentioned, the NPTC representative believed that essentially all of their members currently 

maintain at least $1 million in public liability coverage. The NPTC filed comments to the 

Unified Registration System Notice of Proposed Rulemaking stated that new SAFETEA-LU 

mandates would require private carriers that do not transport HM to be subject to Federal 

minimum financial responsibility requirements for the first time. The NPTC “accepts this new 

requirement as virtually all of its member companies already have in place liability insurance or 

other forms of financial responsibility that exceeds the current minimum requirements of 

$750,000 for non-hazmat transportation” (NPTC, 2005). 
 4-5 

Motor carriers indicated that if there were an increase in public liability insurance they would 

first get competitive quotes from different insurers. One carrier indicated they currently try to 

limit the number of passengers in their 15-passenger vans to ten as a safety consideration. If the 

costs went up significantly, they would explore whether chartered buses would be more 

economical. Another passenger carrier indicated that they needed to maintain the same level of 

service and would not change their operations. The retailer indicated that they would not change 

their operations, but would explore altering their deductible to keep their annual costs constant. 

4.6 Industry Growth and Driver Turnover 

None of those interviewed could estimate the annual growth rate of private motor carriers. Some 

thought the annual driver turnover rate would drop if carriers provided consistent hours, same 

routes, and allowed the drivers to be home more often. The annual driver turnover rates for the 

private carriers were based on the type of operation and whether they used seasonal or temporary 

employees. The retailer indicated a fair amount of turnover, but could not quantify it. Carriers 

that used regular employees reported low turnover rates. One insurer indicated turnover rates for 

private carriers could be one-third less than for for-hire carriers. The NPTC provided the results 

of a recent membership survey that reported annual driver turnover rates for private carriers were 

16.9 percent. For comparison, the data presented in Section 2.1 included several other estimates 

that ranged from 3 to 16 percent, with comparable for-hire rates ranging as high as 135 percent. 

The private carrier driver turnover rates are presented in order to better understand the varying 

risk characteristics between the private and for-hire fleets but are not used in any calculation 

presented in this study. 

4.7 Costs to Explore Obtaining Public Liability Insurance 

If private motor carriers were required to maintain a minimum level of public liability insurance, 

the amount of time required to comprehend and comply with the new regulation would vary 

significantly by company. Insurance providers estimated it could take as little as 60 to 90 days, 

while one broker estimated it could take up one-half year of one employee’s time. A motor 

carrier estimated the time to complete these tasks at as little as 30 days, while the NPTC 

representative estimated the time at one person-day. Hourly rates for employees to determine the 

new requirements, determine their need for new insurance, and obtain it from the marketplace 

ranged from $10.25 at a university and $20-$25 and $20-$50 from insurers. Some respondents 

provided annual salary estimates for the people that would perform these functions: $30,000 for 

a clerk, $50,000 for a safety director, and $150,000 for a vice president of distribution. Clearly, 

some respondents were considering the period over which they would research the issues and 

gain necessary approvals, rather than the actual employee time spent on this task. Costs could 

range widely depending on time and level of employee experience required. 
 5-1 

5.0 ANALYSES

The data and information obtained in earlier stages of the project were used to develop the safety 

and economic models needed to determine the potential benefit-cost ratio for implementing new 

financial responsibility requirements for private motor carriers. The primary benefits are the 

safety impacts of crash prevention. The primary costs are those to purchase and file proof of the 

required public liability coverage. 

5.1 Baseline 

5.1.1 Potentially Affected Private Carriers 

The only comprehensive, nationwide source of information on the population of private motor 

carriers in the United States is FMCSA’s MCMIS. The MCMIS Census File contains 

information on motor carriers primarily submitted on Form MCS-150, which collects general 

information on each entity. Other input to MCMIS comes from Form MCS-151, Part A, which is 

completed as part of safety, compliance, or educational reviews, and other sources. 

For this effort, the complete Census, Crash, and Inspection Files from MCMIS were obtained. 

These data were current as of the end of 2005. The data were imported into Microsoft Access 

and SQL Server databases and further processed to identify carriers and other information 

relevant to this project. 

To identify the number of private motor carriers potentially affected by changes in the minimum 

financial responsibility requirements, the MCMIS fields listed in Table 5-1 were used. 

Table 5-1. MCMIS Fields Used to Identify Private Carriers 

Data Element Field Name Values Comments 

Status ACC_STAT A Only “active” carriers were selected 

Classification CLASS C,D,E Only carriers with one of these values 

were selected. Some carriers with these 

values also were identified as for-hire 

carriers (codes A and B) and would, 

therefore, already have the required 

insurance coverage 

Interstate Carrier 

Operation 

CRRINTER A Only interstate carriers of non-hazardous 

property and passengers were selected 

Hazmat Indicator HM_IND all but Y No hazardous materials carriers were 

selected 

Entity Type CARSHIP C Only entities marked as “carriers” were 

selected 

USDOT 

Revoked Flag 

USDOT_REVOKED_FLAG all but Y Only carriers without a revoked USDOT 

number were selected 
 5-2 

This resulted in a total of 261,179 private carriers. Carriers were then assigned to one or more 

categories corresponding to the types of private interstate carriers of interest for this analysis: 

 carriers operating passenger vehicles with a seating capacity of 9 to 15 passengers 

 carriers operating passenger vehicles with a seating capacity of 16 or more passengers 

 carriers transporting non-hazardous property 

The assignment was based on the number of owned, term-leased, and trip-leased vehicles in each 

of the three categories, as shown in Table 5-2. Some carriers did not fit into any of these 

categories because they operated smaller passenger vehicles. 

Table 5-2. MCMIS Fields Used to Assign Carriers to Categories 

Field Names Description 

9-15 passenger vehicles 

OWNSCHOOL_9_15 number of owned school buses 

TRMSCHOOL_9_15 number of term-leased school buses 

TRPSCHOOL_9_15 number of trip-leased school buses 

OWNVAN_9_15 number of owned mini-buses and vans 

TRMVAN_9_15 number of term-leased mini-buses and vans 

TRPVAN_9_15 number of trip-leased mini-buses and vans 

OWNLIMO_9_15 number of owned limousines 

TRMLIMO_9_15 number of term-leased limousines 

TRPLIMO_9_15 number of trip-leased limousines 

16+ passenger vehicles 

OWNSCHOOL_16 number of owned school buses 

TRMSCHOOL_16 number of term-leased school buses 

TRPSCHOOL_16 number of trip-leased school buses 

OWNBUS_16 number of owned motor coaches 

TRMBUS_16 number of term-leased motor coaches 

TRPBUS_16 number of trip-leased motor coaches 

OWNLIMO_16 number of owned limousines 

TRMLIMO_16 number of term-leased limousines 

TRPLIMO_16 number of trip-leased limousines 

non-hazardous property vehicles 

OWNTRUCK number of owned trucks 

TRMTRUCK number of term-leased trucks 

TRPTRUCK number of trip-leased trucks 

OWNTRACT number of owned tractors 

TRMTRACT number of term-leased tractors 

TRPTRACT number of trip-leased tractors 
 5-3 

The 261,179 private motor carriers identified were distributed among the different categories, as 

shown in Table 5-3. 

Table 5-3. Number of Carriers in Each Category 

Category Carriers

9-15 passenger vehicles only 536

16+ passenger vehicles only 1,606

non-hazardous property vehicles only 239,912

more than one type of vehicle 1,265

not assigned 17,860

5.1.2 Affected Private Carriers Accounting for Existing Insurance Coverage 

Using the information in Section 2.2.2, State Private Motor Carrier Insurance Requirements, and 

in Tables 2-2 and 2-3, the difference between the current private motor carrier insurance 

requirements for each state and the current insurance requirements for all interstate for-hire 

motor carriers can be determined. This is the gap in insurance that each private carrier with only 

the state’s minimum requirements would need to cover. As some states vary the minimum 

requirements for non-hazardous property carriers based on the weight of the vehicle, a weighted 

average minimum requirement for all vehicles in those states was computed using the 

distribution of trucks by weight class provided by the Federal Highway Administration (FHWA, 

2005). This modified truck insurance minimum was computed for Arizona, Florida, North 

Carolina, Oklahoma, Oregon, and Texas. For states that vary the minimum insurance required 

for passenger vehicles based on the passenger capacity, an average coverage was estimated by 

the project team and is already included in Table 2-2. 

MCMIS contains complete carrier address information, so the number of private motor carriers 

operating each type of vehicle in each state can be determined. However, many of these carriers 

may already have sufficient public liability coverage to meet the proposed new requirements. 

The project team developed estimates of the percentage of carriers, based on fleet size, that 

would already maintain sufficient insurance coverage. These estimates are presented in Table 

5-4. It is assumed that some private carriers with small fleet sizes are still large businesses and 

would maintain high levels of insurance coverage. Using these estimates, the number of carriers 

in each category that would need to obtain some level of additional insurance is shown in Table 

5-5. The total number of carriers by state is provided in Appendix C. 
 5-4 

Table 5-4. Estimates of Carriers with Adequate Insurance Coverage by Fleet Size 

Category Fleet Size % of Private Carriers with Indicated 

Public Liability Coverage 

9-15 passenger vehicles $1,500,000 

 1 15% 

 2 25% 

 3 33% 

 10 50% 

 20 85% 

 65 100% 

16+ passenger vehicles $5,000,000 

 1 15% 

 2 25% 

 5 33% 

 15 50% 

 25 85% 

 45 100% 

non-hazardous property vehicles $750,000 

 1 15% 

 9 25% 

 19 33% 

 50 50% 

 145 85% 

 550 100% 

Table 5-5. Number of Carriers in Each Category Requiring Additional Insurance 

Category Carriers

9-15 passenger vehicles 1,059

16+ passenger vehicles 1,960

non-hazardous property vehicles 189,726

5.1.3 Number of Vehicles for Which Insurance is Required 

A similar process is used to determine, at the state level, how many vehicles in each of the three 

categories will be affected by new minimum public liability coverage requirements for interstate 

private motor carriers. The same estimates shown in Table 5-4 are applied to the MCMIS data 

and the overall results are shown in Table 5-6. The total number of vehicles by state is provided 

in Appendix C. 
 5-5 

Table 5-6. Number of Vehicles in Each Category Requiring Additional Insurance 

Category Vehicles

9-15 passenger vehicles 2,110

16+ passenger vehicles 4,114

non-hazardous property vehicles 524,534

5.2 Costs to Private Motor Carriers 

5.2.1 Costs to Explore Obtaining Public Liability Insurance 

The stakeholders interviewed in support of this study indicated that they would dedicate roughly 

8 to 24 hours of staff time to become familiar with a new regulation and to assess their operation 

to determine their need for additional insurance, and obtain it. This process would include 

obtaining insurance quotes and determining the most appropriate insurance option. Based on the 

data received from the stakeholder interviews, the analysis assumes that an average of 16 hours 

per company will be spent in the process of obtaining insurance. 

To determine the costs to private operators of 9-15 passenger vehicles, 16+ passenger vehicles, 

and non-hazardous material transporting heavy trucks, the number of carriers needing coverage 

in each category (1,059 9-15 passenger vehicle operators, 1,960 16+ passenger vehicle operators 

and 189,726 truck operators) was multiplied by the time required to obtain insurance (16 hours) 

and the salary plus fringe benefits for administrative personnel ($22.64).8

Based on these assumptions, the industry costs associated with researching any new insurance 

requirement and obtaining insurance in compliance with it are estimated at $383,612 for 

operators of 9-15 passenger vehicles, $709,990 for bus operators, and $68,726,346 for truck 

operators. These are considered one-time costs, necessary for obtaining insurance commensurate 

with the FMCSA standards presently applied to for-hire carriers. These costs are assumed to be 

incurred in the first year of the 10-year analysis timeframe. 

5.2.2 Costs for Public Liability Insurance 

The vast majority of the costs considered in this study are those tied to the expanded insurance 

requirements. To determine the insurance costs to private motor carriers, the insurance rates 

highlighted in Table 2-6 were used to construct cost curves, as shown in Figure 5-1. State 

insurance coverage requirements were then built into the cost equations shown in Figure 5-1 to 

estimate the costs currently paid by private carriers. The average state insurance costs were 

estimated at $2,088 for 9-15 passenger vehicles, $2,325 for buses, and $4,973 per vehicle per 

year. Federal public liability insurance coverage requirements were also built into the cost 

equations and compared to the estimated state costs in order to determine the incremental cost of 

the expanded insurance requirements. 

 

8

 United States Department of Labor, Bureau of Labor Statistics. Occupational Employment Statistics. Washington, 

DC. November 2004. 
 5-6 

y = 0.0019 x + 4558.6

y = 643.15 Ln(x) - 5476.5

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000

Public Liability Coverage Amount

Annual Premium

Passenger Vehicles Trucks 

Figure 5-1. Insurance Cost Curves for 9-15 Passenger Vehicles, Buses, and Heavy 

Trucks 

The average costs of state-required insurance, differentiated by vehicle type, are compared to the 

estimated costs of the expanded Federal requirements in Table 5-7. The costs associated with the 

expanded insurance requirements range from $1,010 for trucks to $2,120 for 16+ passenger 

vehicles. The 16+ passenger vehicle cost differential is the greatest because the Federal 

standards require $5,000,000 of public liability coverage, an amount well in excess of the state 

average of $382,000 of coverage. 

Table 5-7. Insurance Costs per Vehicle per Year 

Vehicle Type Federal Standard State Average Cost Differential 

9-15 passenger vehicles $3,670 $2,088 $1,582 

16+ passenger vehicles $4,444 $2,324 $2,120 

non-hazardous property vehicles $5,983 $4,973 $1,010 

The number of vehicles requiring insurance was computed in Section 5.1.3. The number of 

vehicles by type requiring insurance was segmented according to each carrier’s state, as 

determined by their physical address in the MCMIS Census File. The project team obtained data 
 5-7 

from all 50 states and the District of Columbia. The number of vehicles required to expand their 

coverage from state to Federal standards by vehicle type was computed and compared to the 

insurance cost differential for each state to determine the insurance costs associated with the 

expanded Federal coverage requirements. Based on these assumptions, the total insurance costs 

borne by private carriers is estimated at $27.4 million for 9-15 passenger vehicle operators, $69.8 

million for 16+ passenger vehicle operators, and $4.2 billion for private truck operators over the 

10-year analysis time frame. These costs are presented in present value terms, discounted at 7 

percent. 

Equation 1 demonstrates how insurance costs were estimated for private motor carriers carrying 

non-hazardous property in the State of New York. Note that these are the costs estimated for 

only Year 1 of the analysis time frame. 

The insurance cost equation reflects the findings of the insurance rates analysis presented in 

Figure 5-1. Based on current requirements of $60,000 liability coverage and the expanded 

Federal requirements of $750,000, the cost impact per truck would be estimated at $1,311, 

reflecting an increase in the estimated annual insurance premium from $4,672 to $5,983. The 

per-vehicle increase in insurance costs is, in turn, multiplied by the total number of trucks not 

already in compliance with Federal standards (estimated at 23,787). Equations 2 and 3 show the 

result of the calculation, an estimated cost to private truck operators in New York of 

$31.2 million in 2006. 

ICTN Y = #TRNY x [(0.0019(IRTF) + 4558.6) – (0.0019(IRTNY) + 4558.6)] [1] 

 

where: 

ICTNY = Insurance cost impacts of expanded Federal requirements to private property 

truck operators in New York 

#TRNY = Number of trucks requiring coverage 

IRTF = Federal insurance requirements for operators of trucks carrying non-hazardous 

property 

IRTNY = New York insurance requirements for trucks carrying non-hazardous property. 

ICTNY = 23,787 x [(0.0019($750,000) + $4558.6) – (0.0019($60,000) + $4558.6)] [2] 

 

 ICTNY = $31,184,757 [3] 

 

5.2.3 Costs to File Proof of Insurance 

For-hire carriers, who are already required to meet FMCSA insurance standards, must file 

numerous forms documenting the possession of adequate public and cargo liability insurance, as 

well as forms designed to verify that the carriers have purchased surety bonds. For-hire carriers 

are also required to file notice of cancellations on FMCSA’s prescribed forms. Under the 

insurance requirements outlined in SAFETEA-LU and evaluated in this study, private carriers 

would be required to file forms that provide evidence of required bodily injury and property 
 5-8 

damage (BI&PD) insurance coverage (Forms BMC-91, 91x, or 82) and endorsements that must 

be attached to BI&PD policies (Forms BMC-90 and 32). Thus, private carriers would, at a 

minimum, be required to file two forms with FMCSA if they were subject to FMCSA insurance 

requirements. 

FMCSA has estimated that the time required to complete these forms is 10 minutes per form 

(FMCSA, 2005). This cost analysis assumes that each private carrier, including those who would 

not need to change insurance coverage levels, would be required to file proof of insurance with 

FMCSA and that it would take 20 minutes (10 minutes per form). The cost to file these forms is 

estimated at $7.55 per company, assuming an hourly rate (salary plus fringe) of $22.64 for 

administrative personnel. 

Based on the assumptions outlined above, the product of the number of companies required to 

file proof of insurance forms (Table 5-8) and the filing cost per company generates estimates of 

the initial costs to file proof of insurance ($10,980 for operators of 9-15 passenger vehicles, 

$20,006 for bus operators and $1,815,396 for private truck operators). When carriers change 

insurance providers, start, or stop coverage, they would be required to file additional forms with 

FMCSA. Based on current filing rates associated with for-hire carriers, the costs associated with 

future years’ filings tied to changes in coverage were estimated (OMB, 2005). Total filing costs 

are highlighted in Table 5-8. 

Table 5-8. Filing Costs* 

Vehicle Type Number of Carriers Total Filing Costs 

9-15 passenger vehicles 1,455 $14,794 

16+ passenger vehicles 2,651 $34,073 

non-hazardous property vehicles 240,556 $3,244,685 

5.2.4 Impacts on Small Businesses 

The project team evaluated the industries most likely to be impacted by the expanded insurance 

requirements and identified corresponding North American Industry Classification System 

(NAICS) codes for each industry, as shown in Table 5-9. Because these requirements would 

apply to private carriers, the industries affected by the insurance regulations span a broad crosssection of the national economy. Broad industry classifications, such as manufacturing (31-33), 

retail (44-45), and wholesale (42) industries and construction (23), would be affected by the 

requirement that property carriers meet the expanded insurance requirements. With respect to 

the 9-15 and 16+ passenger vehicles, the project team identified four primary NAICS codes: 

educational services (61); nursing and residential care facilities (623); art, entertainment, and 

recreation (71); and religious organizations (8131). 

*Based on current filing rates associated with for-hire carriers. 
 5-9 

Table 5-9. Impacted NAICS Codes 

NAICS Code(s) Industry 

non-hazardous property motor carriers 

23 Construction 

562 Waste Management Services 

44-45 Retail 

811 Repair and Maintenance 

113 Forestry and Logging 

31-33 Manufacturing 

42 Wholesale 

passenger motor carriers 

61 Educational Services 

623 Nursing and Residential Care Facilities 

71 Arts, Entertainment, and Recreation 

8131 Religious Organizations 

The research team was unable to determine the percentage of all vehicles attributable to small 

businesses operating under each NAICS code identified in Table 5-9; however, Small Business 

Administration (SBA) data were used to determine the number of establishments, employees, 

annual pay, and total receipts broken down by firm size (SBA, 2006). From this dataset, which 

is provided in Appendix C, the project team was able to determine the proportion of employees, 

salaries, receipts, and establishments attributed to small businesses operating trucks and 

passenger vehicles. The resulting shares are shown in Table 5-10. Table 5-10 shows that small 

businesses comprise 80.6 percent of the establishments associated with trucks, as identified in 

Table 5-9. Further, small businesses account for approximately 29.5 percent of estimated 

receipts in industries where private heavy trucks are operated. Small businesses account for 35.3 

percent of total receipts in industries that operate passenger vehicles. 

Table 5-10. Small Business Share of Establishments, Employees, Annual Pay, and 

Estimated Receipts in Impacted NAICS Codes 

Trucks Passenger Vehicles 

Establishments 80.6% 87.8% 

Employees 42.9% 45.2% 

Annual Pay 39.9% 35.5% 

Estimated Receipts 29.5% 35.3% 

Table 5-11 presents the estimated costs to small businesses associated with the expanded 

insurance requirements. The small business analysis considers high- and low-cost scenarios. In 

the low-cost scenario, estimated receipts are used as a proxy for the burden that small businesses 

would bear (29.5 percent for heavy trucks and 35.3 percent for passenger vehicles). The lowcost scenario considers employees as an indicator of financial responsibility, and presents a range 

based on the assumption that small businesses operating in industries deploying heavy trucks 

would shoulder 42.9 percent of the costs while those operating in industries using passenger 

vehicles would bear 51.9 percent of the costs. Based on these assumptions, total costs to small 

businesses operating trucks are estimated at $1.2 to $1.8 billion. The impact of the expanded 
 5-10 

insurance requirements on small businesses operating 9-15 passenger vehicles is estimated at 

$11.7 to $14.5 million, and the costs to small businesses operating 16+ passenger vehicles is 

estimated at $29.7 to $36.6 million. 

Table 5-11. Small Business Cost Analysis 

Small Business Costs Category Total Cost to All 

Businesses Low High 

9-15 passenger vehicles $27,843,379 $11,722,062 $14,450,714 

16+ passenger vehicles $70,519,876 $29,688,868 $36,599,815 

non-hazardous property vehicles $4,224,357,602 $1,246,185,493 $1,812,249,411 

5.2.5 Summary of Costs 

The costs associated with the expanded insurance requirements examined in this study are 

highlighted in Table 5-12. These costs are summarized by vehicle type. The vast majority of the 

costs are tied to insurance premiums paid by private operators of heavy trucks. In computing 

these costs over 10 years, an average annual growth rate of 2.98 percent was applied to the truck 

population, an annual growth rate of 1.92 percent was applied to buses and an average annual 

growth rate of 2.0 percent was applied to 9-15 passenger vehicles.9 A discount rate of 7 percent 

was applied in order to present estimates in current value terms. 

As illustrated in Table 5-12, the total costs to operators of 9-15 passenger vehicles is estimated at 

$27.8 million over the 10-year timeframe. Estimated costs to private bus operators are estimated 

at $70.5 million. Finally, the estimated costs borne by private truck operators are expected to 

exceed $4.2 billion over the 10-year (2006-2015) study time horizon. 

Table 5-12. Summary of Costs 

Vehicle Type 

Administrative 

Costs to Obtain 

Insurance 

Costs of 

Insurance 

Premiums 

Costs of 

Filing Total Costs 

9-15 passenger vehicles $383,612 $27,444,972 $14,794 $27,843,379 

16+ passenger vehicles $709,990 $69,775,813 $34,073 $70,519,876 

non-hazardous property 

vehicles 

$68,726,346 $4,152,386,571 $3,244,685 $4,224,357,602 

Because there is some uncertainty with respect to the estimate of the number of entities 

potentially affected by expanded Federal financial responsibility requirements and the costs that 

would be incurred, sensitivity analysis was performed and low-, medium- and high-end ranges 

were computed. The sensitivity analysis takes the medium-end or mid-point estimates provided 

 

9 Truck growth rate is based on growth in truck population forecast between 1998 and 2008 in American Trucking 

Associations, U.S. Freight Transportation Forecast to 2008. Bus growth rate based on historic growth in private 

commercial buses as published in Federal Highway Administration, Federal Highway Statistics, Table MV-10. 

Washington, D.C. The 9-15 passenger vehicle growth rate was computed by average annual growth in gross output 

for the transit and ground passenger transportation sector between 1999 and 2004. 
 5-11 

in Table 5-12 and considers the cases where costs exceed or fall short of the baseline by 20 

percent. The range of costs is presented in Table 5-13. 

Table 5-13. Results of Cost Sensitivity Analysis 

Vehicle Type 

Administrative 

Costs to Obtain 

Insurance 

Costs of 

Insurance 

Premiums 

Costs of 

Filing Total Costs 

9-15 passenger vehicles

Low-end estimate $306,890 $21,995,978 $11,835 $22,274,703 

High-end estimate $460,334 $32,933,966 $17,753 $33,412,055 

16+ passenger vehicles

Low-end estimate $567,992 $55,820,650 $27,258 $56,415,901 

High-end estimate $851,988 $83,730,976 $40,888 $84,623,851 

non-hazardous property vehicles

Low-end estimate $54,981,077 $3,321,909,257 $2,595,748 $3,379,486,082 

High-end estimate $82,471,615 $4,982,863,885 $3,893,622 $5,069,229,122 

5.3 Benefits 

5.3.1 Safety Benefits from Crash Reduction 

Per-crash Costs 

The primary benefit associated with the expanded insurance requirements examined in this study 

stem from avoiding the high costs of crashes involving unsafe private carriers that would find it 

difficult or impossible to obtain public liability coverage at the new, higher levels. The costs 

include those related to: medical costs, emergency services, property and equipment damage, lost 

productivity (e.g., wages, fringe benefits, claims processing costs, litigation costs, crash 

investigation costs, recruiting and training replacement for disabled workers), and monetized 

quality-adjusted life years. Zaloshnja (2002) estimated these costs according to non-injury 

crashes, injury crashes, and fatal crashes for a broad spectrum of vehicle types, including buses 

and heavy trucks. 

The estimated costs per accident, differentiated based on vehicle type and crash severity, are 

highlighted in Table 5-14. The research team was unable to identify a study that estimated the 

costs associated with 9-15 passenger vehicle incidents. Thus, this analysis assumes that there is 

no difference between the crash costs attributable to 16+ passenger and 9-15 passenger vehicle 

crashes due to the similarity in their risk profile, as noted by two insurance industry 

representatives contacted for this study. Zaloshnja (2002), the most recent source of crash cost 

information, relies on data obtained in 2000. Thus, the published costs were inflated to 2006 

dollars based on growth in the consumer price index between 2000 and 2006. 
 5-12 

Table 5-14. Crash Costs by Vehicle Type and Crash Severity 

Crash Severity 9-15 and 16+ 

Passenger Vehicles Trucks 

Non-Injury $7,058 $11,973 

Injury $88,599 $189,440 

Fatality $3,072,617 $3,769,916 

Crashes Avoided 

The MCMIS Census File was used to compute overall crash rates for both private and for-hire 

carriers in each of the three carrier-type categories. This was done by using the recordable 

accident rate (ACC_RATE) and latest review mileage (MILETOT) fields to determine the 

number of crashes attributable to each carrier that operated vehicles in only one category. The 

overall crash rate was determined by summing all the crashes and dividing by the sum of all the 

review mileage figures for each motor carrier included. For all three carrier types, the private 

carrier crash rate was higher than it was for the for-hire carriers. These values are shown in 

Table 5-15. 

Table 5-15. Crash Rates by Carrier Category 

Crash Rates (per million miles traveled) 

Category For-hire Carriers Private Carriers 

9-15 passenger vehicle operators 0.283 0.359 

16+ passenger vehicle operators 0.221 0.516 

non-hazardous property carriers 0.307 0.409 

Crashes in the MCMIS Crash File were linked, where possible, to motor carriers in the MCMIS 

Census File by their USDOT numbers. This linkage was not possible for approximately 30 

percent of the crashes in the Crash File as the USDOT number was missing. There are several 

reasons why the USDOT number can be blank for a reported crash. While all reportable crashes 

are to be entered into MCMIS, not all motor carriers are required to have a USDOT number. For 

example, while for all vehicle configurations only 30 percent of the MCMIS crash records have 

missing USDOT numbers, that percentage is 70 percent for 16+ passenger vehicle operators and 

75 percent for 9-15 passenger vehicle operators. It follows that there are many reportable 

accidents involving these categories of vehicles that are not included in the crash rate calculation 

shown in Table 5-15. While all motor carriers transporting hazardous materials must apply for a 

USDOT number, one study of hazardous material transport found that the USDOT number was 

not entered for 15 percent of the MCMIS crash records. The overall effect of a missing USDOT 

number on the estimates shown in Table 5-15 is much less significant than the inability to 

include many of the crashes involving 9-15 and 16+ passenger vehicle operators in the crash rate 

estimates. 

For the reportable accidents that had USDOT numbers, crashes were then identified as involving 

a private or for-hire carrier and by crash severity. These crashes were used to determine the 

probabilities of a fatality or injury, given a crash, for each carrier category. Finally, the reduction 
 5-13 

in crashes, fatal crashes, and injury crashes was determined for each carrier category. This 

reduction was based on the assumption that with the levels of public liability insurance increased 

to those for for-hire carriers, private carriers would experience the same accident rates as for-hire 

carriers. There are a number of reasons that would lead one to expect higher insurance 

requirements to have an effect upon safe operations. For example, the increased costs should 

force private carriers to focus more on safety in order to keep their rates as low as possible. 

Furthermore, as long as private carriers must only comply with part of the FMCSRs, their basis 

for safe operation will be more dependent upon the cost of insurance rather than regulatory 

compliance. Finally, unsafe operators may not be able to either acquire or afford the minimum 

insurance required to comply, thus removing them from the carrier population. While minimum 

financial responsibility requirements may not be the sole reason for the differential in crash rates 

between private and for-hire carriers, the baseline analysis assumes that it is a significant one. 

Sensitivity analysis is used to account for other possible reasons behind the crash rate differential 

and a smaller percentage of crashes avoided from the new requirements. These reductions are 

shown in Table 5-16 and are actual values, not percentages. 

Table 5-16. Annual Reductions in Crashes, Fatalities, and Injuries 

Category Crashes Fatal 

Crashes Fatalities Injury Crashes Injuries 

9-15 passenger vehicle operators 2.3 0.1 0.2 1.5 3.2 

16+ passenger vehicle operators 84.9 1.3 1.4 44.7 95.6 

non-hazardous property carriers 2,392.8 86.2 99.4 1,113.4 1,581.8 

Based on analysis results obtained from UMTRI, crash data are underreported in MCMIS.10 The 

adjustment factors to account for this underreporting, taken from UMTRI’s analysis, are shown 

in Table 5-17. 

Table 5-17. MCMIS Underreporting Correction Factors 

Category Crashes Fatal 

Crashes Fatalities Injury Crashes Injuries 

9-15 passenger vehicle operators 0.3 0.7 0.7 0.6 0.6 

16+ passenger vehicle operators 0.3 0.7 0.7 0.6 0.6 

non-hazardous property carriers 0.6 0.7 0.7 0.6 0.6 

Next, the values in Tables 5-16 and 5-17 are multiplied to yield the resulting reductions in 

crashes, fatalities, and injuries shown in Table 5-18. 

 

10 UMTRI acquired six states’ crash files for all motor vehicle crashes in the state. UMTRI developed algorithms in 

each state to identify records that qualified for reporting to the MCMIS crash file and developed weighted MCMIS 

reporting rates for crashes, fatal crashes, and injury crashes for 9-15 passenger vehicles, 16+ passenger vehicles, and 

trucks. 
 5-14 

Table 5-18. Annual Reductions in Crashes, Fatalities, and Injuries Corrected for 

Underreporting 

Category Crashes Fatal 

Crashes Fatalities Injury Crashes Injuries 

9-15 passenger vehicle operators 7.8 0.2 0.2 2.5 5.4 

16+ passenger vehicle operators 283.0 1.8 2.0 74.5 159.4 

non-hazardous property carriers 3,988.0 123.2 142.0 1,855.7 2,636.3 

The next step in determining the avoided crashes, fatalities, and injuries from extending the 

minimum public liability insurance requirements to private carriers is to account for those 

carriers that already have the minimum levels of coverage. The percentage of VMT associated 

with these carriers was determined by using the same methodology presented in Section 5.1.2 to 

identify the carriers themselves. It was assumed that VMT was distributed proportionally across 

all the fleet size categories shown in Table 5-4. For 9-15 passenger vehicles, the percentage 

reduction was 19.8 percent; the reduction was 85.6 percent for 16+ passenger vehicles and 46.5 

percent for trucks carrying non-hazardous property. The resulting adjusted annual reductions in 

crashes, fatalities, and injuries shown in Table 5-19. 

Table 5-19. Annual Reductions in Crashes, Fatalities, and Injuries Corrected for Carriers 

Already Meeting the Insurance Requirements 

Category Crashes Fatal 

Crashes Fatalities Injury Crashes Injuries 

9-15 passenger vehicle operators 6.3 0.1 0.2 2.0 4.3 

16+ passenger vehicle operators 40.7 0.3 0.3 10.7 22.9 

non-hazardous property carriers 2,135.1 66.0 76.0 993.5 1,411.4 

Expanding Federal public liability insurance requirements to private carriers would not be 

expected to completely eliminate the discrepancy between private and for-hire accident rates. 

Thus, this analysis considers a ratio of effectiveness (ROE), where the proposed regulation 

change would reduce but not eliminate the gap in accident rates between private and for-hire 

carriers. As shown in Table 5-20, a ROE of 60 percent reduces the annual avoided crashes, 

fatalities, and injuries highlighted in Table 5-19 by 40 percent. The analysis also considers an 80 

percent ROE scenario, which is highlighted in Section 5.4 of this report. 

Table 5-20. Annual Reductions in Crashes, Fatalities, and Injuries Corrected for Carriers 

Meeting the Insurance Requirements Assuming a 60 Percent Ratio of Effectiveness 

Category Crashes Fatal 

Crashes Fatalities Injury Crashes Injuries 

9-15 passenger vehicle operators 3.8 0.1 0.1 1.2 2.6 

16+ passenger vehicle operators 24.4 0.2 0.2 6.4 13.7 

non-hazardous property carriers 1,281.1 39.6 45.6 596.1 846.8 
 5-15 

Benefits of Crashes Avoided 

By combining these per-crash estimated costs with the crashes shown in Tables 5-19 and 5-20, 

the cost savings associated with avoided crashes for 9-15 passenger vehicles are estimated at 

$3.2 to $5.3 million over the 10-year analysis time horizon. The avoided crash costs for 16 or 

more passenger vehicles are estimated at $9.5 to $15.8 million. The crash costs avoided due to a 

reduction in the number of crashes involving motor carriers of non-hazardous property is 

estimated at $2.3 to $3.8 billion. 

5.3.2 Summary of Benefits 

This study estimated that the expanded insurance requirements would eliminate 1,309.3 to 

2,182.1 crashes, 45.9 to 76.5 fatalities, and 863.2 to 1,438.6 injuries annually, resulting in 

benefits associated with enhanced safety totaling $2.3 to $3.8 billion over the 10-year analysis 

time horizon. Though these benefits are significant, they were outweighed by the costs 

associated with soliciting insurance bids, paying insurance premiums, and filing necessary 

reports with FMCSA. The total costs borne by industry over the 10-year time horizon were 

estimated at $3.4 to $4.3 billion. 

Table 5-21. Summary of Benefits 

Vehicle Type Avoided 

Crashes 

Avoided 

Fatalities 

Avoided 

Injuries Total Benefits 

9-15 passenger vehicles

Low-end estimate 3.8 0.1 2.6 $3,195,125 

High-end estimate 6.3 0.2 4.3 $5,325,208 

16+ passenger vehicles

Low-end estimate 24.4 0.2 13.7 $9,497,027 

High-end estimate 40.7 0.3 22.9 $15,828,379 

non-hazardous property vehicles

Low-end estimate 1,281.1 45.6 846.8 $2,284,724,636 

High-end estimate 2,135.1 76.0 1,411.4 $3,807,874,394 

5.4 Benefit-cost Ratios 

The benefits and costs over the ten-year analysis period associated with the expanded insurance 

requirements are highlighted in Table 5-22 and are shown in present value terms, discounted at 

7 percent. The BCA considers 27 scenarios, with varying combinations of benefits and costs 

ranging from low-end to high-end estimates, with mid-point estimates also included. As noted 

previously, the benefits estimates vary based on the ROE, ranging from 60 percent (low-end) to 

100 percent (high-end) with a mid-point estimate of 80 percent. The cost estimate includes a 

mid-point estimate and low- and high-end estimates that represent ± 20 percent of the mid-point. 

The scenarios also differ based on the vehicle fleet considered: 9-15 passenger vehicles, 

16+ passenger vehicles, and trucks carrying non-hazardous property. 
 5-16 

Table 5-22 shows that estimated costs exceed estimated benefits in 26 of the 27 scenarios 

considered in this study. Net costs (costs minus benefits) are estimated at $16.9 to $30.2 million 

for 9-15 passenger vehicles, $40.6 to $75.1 million for 16+ passenger vehicles, and $-428.4 to 

$2.8 billion for trucks carrying non-hazardous property. In all cases except Scenario 21 

(highlighted below) where low-end costs and high-end benefits are considered for non-hazardous 

property-carrying trucks, costs exceed benefits and the benefit-cost ratios (BCRs) fall below 1.0. 

The lowest BCRs are attributed to the 9-15 passenger vehicles, while trucks achieve the highest 

BCRs. 

Table 5-22. Benefit-cost Analysis Findings 

Scenario Benefits Costs Vehicle Type Benefits Costs BCR 

1 Low Low 9-15 Passenger $3,195,125 $22,274,703 0.14 

2 Low Low 16+ Passenger $9,497,027 $56,415,901 0.17 

3 Low Low Trucks $2,284,724,636 $3,379,486,082 0.68 

4 Low Mid 9-15 Passenger $3,195,125 $27,843,379 0.11 

5 Low Mid 16+ Passenger $9,497,027 $70,519,876 0.13 

6 Low Mid Trucks $2,284,724,636 $4,224,357,602 0.54 

7 Low High 9-15 Passenger $3,195,125 $33,412,055 0.10 

8 Low High 16+ Passenger $9,497,027 $84,623,851 0.11 

9 Low High Trucks $2,284,724,636 $5,069,229,123 0.45 

10 Mid Low 9-15 Passenger $4,260,167 $22,274,703 0.19 

11 Mid Low 16+ Passenger $12,662,703 $56,415,901 0.22 

12 Mid Low Trucks $3,046,299,515 $3,379,486,082 0.90 

13 Mid Mid 9-15 Passenger $4,260,167 $27,843,379 0.15 

14 Mid Mid 16+ Passenger $12,662,703 $70,519,876 0.18 

15 Mid Mid Trucks $3,046,299,515 $4,224,357,602 0.72 

16 Mid High 9-15 Passenger $4,260,167 $33,412,055 0.13 

17 Mid High 16+ Passenger $12,662,703 $84,623,851 0.15 

18 Mid High Trucks $3,046,299,515 $5,069,229,123 0.60 

19 High Low 9-15 Passenger $5,325,208 $22,274,703 0.24 

20 High Low 16+ Passenger $15,828,379 $56,415,901 0.28 

21 High Low Trucks $3,807,874,394 $3,379,486,082 1.13 

22 High Mid 9-15 Passenger $5,325,208 $27,843,379 0.19 

23 High Mid 16+ Passenger $15,828,379 $70,519,876 0.22 

24 High Mid Trucks $3,807,874,394 $4,224,357,602 0.90 

25 High High 9-15 Passenger $5,325,208 $33,412,055 0.16 

26 High High 16+ Passenger $15,828,379 $84,623,851 0.19 

27 High High Trucks $3,807,874,394 $5,069,229,123 0.75 
 6-1 

6.0 CONCLUSIONS AND RECOMMENDATIONS

6.1 Conclusions 

While some individuals interviewed for this research believe that private motor carriers are 

generally safer than for-hire motor carriers, no studies were identified that indicated that private 

carriers, as a whole, were safer than for-hire carriers. The FMCSA data analyzed for this project 

indicate the opposite is true: for-hire carriers in all three carrier categories examined have lower 

overall crash rates per vehicle mile traveled than private carriers. However, data examined on 

fatal truck and bus crashes showed that private carriers had lower fatality crash involvements 

than for-hire carriers. While this analysis links the level of insurance coverage with safety levels 

and crash reduction, the project team acknowledges that other variables might be contributing 

factors. However, as carriers that experience more crashes and that are considered to be in a 

higher claims risk category in general will pay increased rates for insurance, the insurance 

requirements are assumed to have a strong effect in encouraging safe operating practices. 

Further, expanded insurance requirements could remove a number of unsafe carriers from the 

vehicle population, as these carriers would be unable to secure public liability coverage at the 

higher levels on reasonable financial terms. 

Most states have lower or no financial responsibility requirements for private motor carriers than 

for for-hire motor carriers, and those that have similar requirements appear to have done so to 

apply consistent rules across all motor carriers within their state. States agencies demonstrate 

this regulatory behavior either because they have not determined that private motor carriers are 

no less safe than for-hire motor carriers or there just are not sufficient data on which to properly 

address the issue. 

This study found that the expanded insurance requirements would eliminate 1,309 to 

2,182 crashes, 46 to 77 fatalities, and 863 to 1,439 injuries annually, resulting in benefits 

associated with enhanced safety totaling $2.3 to $3.8 billion over the 10-year analysis time 

horizon. Though these benefits are significant, they were outweighed by the costs associated 

with soliciting insurance bids, paying insurance premiums, and filing necessary reports with 

FMCSA in 26 of 27 benefit-cost analysis scenarios. The total costs borne by industry over the 

10-year time horizon were estimated at $3.5 to $5.2 billion. 

The societal costs are the same for a crash involving a motor carrier with adequate financial 

resources and insurance coverage and for a crash involving a motor carrier without adequate 

financial resources and insurance coverage. However, there are two equity issues that may justify 

the adoption of the new requirements so that they apply to all motor carriers. First, when a motor 

carrier is at fault in a crash and is not able to cover the bodily injury and property and 

environmental damage costs resulting from the crash, the injured parties must pay those costs. 

These parties may include individuals, businesses, and public agencies. Second, some for-hire 

motor carriers argue that some private carrier operations are essentially competing with for-hire 

carriers and that requiring the same level of public liability coverage for all carriers would 

remove what they see as an unfair advantage for private carriers. 
 6-2 

6.2 Recommendations 

Based on the results of the analyses conducted for this project, it appears that extending the 

current minimum financial responsibility requirements that exist for for-hire motor carriers to 

private motor carriers is not cost-beneficial under the assumptions used in this analysis. The 

BCRs for the two passenger carrier categories are both significantly less than one. The BCR for 

non-hazardous property motor carriers is closer to one, but still indicates that the costs outweigh 

the benefits for this much larger group of private carriers. However, the financial responsibility 

requirements examined within this study may be justifiable given the equity considerations 

previously described.
 A-1 

APPENDIX A. REFERENCES

American Transportation Research Institute (ATRI). “Predicting Truck Crash Involvement: 

Developing a Commercial Driver Behavior-Based Model and Recommended Countermeasures.” 

Alexandria, VA, 2005. 

American Trucking Associations (ATA). “American Trucking Trends.” Alexandria, VA. Using 

data from FMCSA. 2000, 2004-2005, and 2005-2006 editions. 

ATA. “Truck Insurance Survey.” Alexandria, VA. January 2002. 

Beard, T. Randolf. “Financial Aspects of Motor Carrier Safety.” Review of Industrial 

Organization. Kluwer Academic Publishers. Vol. 7. pp. 51-64. 1992. 

Blincoe, L., Seay, A., Zaloshnja, Miller, T., Romano, E., Luchter, S., Spicer, R. “The Economic 

Cost of Motor Vehicle Crashes, 2000.” National Highway Traffic Safety Administration 

(NHTSA). May 2002. 

Blower, Daniel. University of Michigan Transportation Research Institute. Personal 

communications. November 8, 2005, February 7, 2006, and March 9, 2006. 

Bradley, Peter. “Taking the Company Private.” DC Velocity Magazine. August 2005. 

Clear Creek Christian School. Board Meeting Minutes. Available at www.cccschool.com. June 

3, 2002. 

Corsi, T. and Keane, T. (2002a). “Motor Carrier Industry Profile Study: Linking Motor Carrier 

Safety Performance with Financial Performance.” University of Tennessee, Knoxville, Center 

for Transportation Research. p. 499. April 2002. 

Corsi, T.M., Newhouse, M.L., Shukla, A., and Chandler, P. (2002b). “Passenger Motor Carriers: 

A Safety Performance Profile.” University of Tennessee, Knoxville, Center for Transportation 

Research. pp. 523-548. April 2002. 

Corsi, T.M., Schumann, K.A., and Tanner, W.C. “Motor Carrier Industry Profile: Safety 

Performance Differences Among Major Segments.” University of Maryland. May 2000. 

Corsi, T. and Stefan, M. “Motor Carrier Safety Performance Profile.” University of Maryland, 

Supply Chain Management Center, prepared for FMCSA. February 2004. 

Federal Highway Administration. “2005 Freight Facts and Figures,” U.S. Department of 

Transportation, Washington, DC. Available at 

http://www.ops.fhwa.dot.gov/freight/freight_analysis/nat_freight_stats/docs/05factsfigures/index

.htm . Table 3-4. November 2005. 

Federal Motor Carrier Safety Administration (FMCSA) (2005a). Notice of Request for 

Comments on Extension of a Currently Approved Collection of Information: Financial 
 A-2 

Responsibility, Trucking and Freight Forwarding. Federal Register, Docket No. FMCSA2005022728. Volume 70, Number 217. November 10, 2005. 

FMCSA (2005b). “Trends in Fatal Crash Data by State.” Available at 

http://ai.fmcsa.dot.gov/CarrierResearchResults/CarrierResearchContent.asp?p=4. Table 1. 

October 5, 2005. 

Fischer, Peggy. Fleet Tire Consulting. Data provided at the American Trucking Associations’ 

Truck Maintenance Council’s 2005 Fall Meeting in Valley Forge, PA, September 18, 2005. 

France, Larry G., “Trucking–Harder with Fewer Players.” Specialty Lines Markets. Available at 

www.roughnotes.com/rnmagazine/2002/august02/08p59.htm. August 2002. 

InsureMyRig.com. “Determining Factors in Assessing Truck Insurance Premiums.” Available at 

www.insuremyrig.com, March 7, 2006. 

Jenks, Christopher. “Availability and Accessibility of Liability and Excess Insurance for Public 

Transit and Private Coach Operators.” Research Results Digest 295, NCHRP. March 2005. 

Leavitt, Wendy. “Safety and the Bottom Line.” The Gale Group. July 1, 2005. 

McFain and Associates Research, Inc., “National Private Trucking Council (NPTC): 2005 

Private Fleet Survey Top Line Report.” NPTC. 2005. 

Mejza, Michael C., Barnard, Richard E., Corsi, Thomas M., and Keane, Thomas. “Driver 

Management Practices of Motor Carriers with High Compliance and Safety Performance.” 

Transportation Journal of the American Society of Transportation and Logistic/The Gale Group. 

Summer 2003. 

Memphis Business Journal. “Trucker’s insurance barrels out of control, some rates up 120%,” 

Available at http://www.memphis.bizjournals.com, October 3, 2003. 

NHTSA, “The Economic Burden of Traffic Crashes on Employers,” December 2003. 

National Institute for Occupational Safety and Health (NIOSH). “Work-Related Roadway 

Crashes - Challenges and Opportunities for Prevention.” Publication No. 2003-119. September 

2003. 

NPTC. “Comments to the Notice of Proposed Rulemaking on the Unified Registration System.” 

U.S. Department of Transportation Docket Management System. Docket No. FMCSA-97-2349; 

RIN 2126-AA22. Document No. FMCSA-1997-2349-160. August 17, 2005. 

Office of Management and Budget. “Inventory of Approved Information Collections,” Available 

at http://www.whitehouse.gov/omb/library/OMBINV.STATE.DOT.html#DOT as of March 9, 

2006. 
 A-3 

PACCAR Leasing Company. “Transportation: Trends and Outlooks.” Volume 12. Issue 2. 

Available at http://www.paclease.com/newsletter/2005DecemberKW_PrivateFleetsWeb.pdf. 

December 2005. 

Petty, Gary. “Recognizing the Stars of Safety.” Heavy Duty Trucking. Available at 

http://www.heavydutytrucking.com/2005/06/080a0506.asp. June 2005. 

Rodriguez, D., Belzer, M., Rocha, M. “The Effects of Trucking Firm Financial Performance on 

Driver Safety.” Transportation and Labor Issues and Regulatory Reform. Elsevier Science 

Publishers. 2004. 

Shepard, Kathy. “Rising Liability Insurance Rates Add to Trucking Industry Woes.” American 

City Business Journals. August 24, 2001. 

Small Business Administration (SBA). Available at 

http://www.sba.gov/advo/research/us_rec02.txt, as of March 10, 2006. 

Vise, Avery. “Reward for Risk.” eTrucker Magazine. May 2003. 

Zaloshnja, Edward and Miller, Ted . “Revised Costs of Large Truck- and Bus-Involved 

Crashes,” Pacific Institute for Research and Evaluation, prepared for FMCSA. November 18, 

2002. 
 B-1 

APPENDIX B. ADDITIONAL ANNOTATED REFERENCES

This appendix describes papers, reports, and articles that were consulted during the study but not 

discussed directly in Section 2.0, Literature Search and Data Gathering. Although the annotated 

references were not used directly for the report preparation, they served either to provide 

background material and information or to validate another source and indicate its applicability 

to the project. 

Hornblower, Manning, and Ward. Truck Accident Litigation. Available at 

www.hmwpc.com/truck.htm as of March 1, 2006. 

This website lists reasons why truck accidents are different from personal automobile accidents 

and explains the need to have insurance. Specific differences between truck and auto accidents 

include the following: 

 Greater likelihood of substantial damage claims 

 Juror prejudice against truck drivers and trucking companies 

 Claims of negligence in the areas of driver hiring, qualification, and training 

 Claims of negligence in the areas of vehicle maintenance 

 Conflicting or overlapping insurance coverages for leased tractors or trailers 

 Claims by co-drivers or unauthorized passengers 

 Claims by employees covered by workers’ compensation insurance in a different state 

 Subject to more governmental regulations than non-commercial vehicles 

 Unique physical limitations on driver and equipment due to the size and bulk of vehicles 

 Identification of vehicle operation and ownership in alleged bump-and-drive cases 

Forkenbrock, David. “External Costs of Intercity Truck Freight Transportation.” Public 

Policy Center, The University of Iowa. Iowa City, IA. 1999. 

This paper estimates that there are four external costs to trucking operations: accidents, 

emissions, noise, and un-recovered costs such as overhead fees. In this study, small carriers 

were not separated from large carriers because, in all markets, large carriers are in direct 

competition with one- or two-vehicle carriers. In general, trucking has two main costs, 

compensation for workers and insurance payments. Insurance costs are based on accident 

history. In 1994, general freight motor carriers were involved in accidents costing society over 

$14 million per 100 million vehicle miles traveled; only $6 million were paid by the trucking 

companies, meaning that 0.59 cents per ton mile were paid by society. 

Selland, Kerri. “Steelmakers gauge truck options for long haul.” American Metal Market. 

August 20, 1993. 

 

This article explains the dispute within companies between having their own trucking group and 

contracting out the trucking. It explains that having a group of their own can be very costly and 

rarely do companies take into account all the costs including worker’s compensation, insurance, 

equipment, and other issues. 
 B-2 

Haigh, Susan. “Blumenthal calls on DMV to Demand Insurance Proof from Trucking 

Cos.” Boston Globe. September 30, 2005. 

State’s Attorney General Richard Blumenthal calls on the Connecticut Motor Vehicle 

Administration to demand proof of insurance from trucking companies following a fiery 20-

vehicle crash that killed four people. The operator of the truck causing the accident had no 

liability insurance. Blumenthal states that companies with safety problems are the most likely not 

to have insurance. In Connecticut, the Department of Motor Vehicles is only informed if there is 

a lapse in coverage on a car, but not if there is a lapse in coverage on a truck. 

Vise, Avery. “Ticking Away.” eTrucker Magazine. April 2003. 

Trucking insurance has skyrocketed since 2001; liability insurance has gone up 32 percent while 

umbrella coverage went up 87 percent. Premium jumps have forced some carriers to reduce their 

fleet size and others to leave the market completely. Choosing the proper coverage is the best 

way to reduce unnecessary costs. For a motor carrier, the best way to accomplish this is review 

their safety background and forecast a future loss schedule. Determining the loss schedule on a 

per-power unit or per-mile basis will allow the company to determine the most cost-effective 

coverage. For a company with good financials and a good safety record, a policy with a higher 

deductible and a lower premium may be best. Although many things played a role in the 

enormous price hike that has occurred in trucking insurance, one of the main reasons is multimillion dollar verdicts. Many insurance companies have excluded punitive damages in their 

insurance policies. To compensate, trucking companies have moved to umbrella coverage, but 

there are few companies willing to write this type of policy. There are still some hidden costs to 

insurance, and with companies moving toward high-deductible, low-premium policies, there are 

even more hidden costs. One such cost is the need for collateral; the insurer is still responsible 

for claims if the motor carrier cannot pay their deductible for any reason and will seek some 

form of security to protect themselves. 

“Insurance Crisis.” edge, Ryder Business Magazine. January 14, 2002. 

This article highlights the fact that insurance rates have gone up. Shippers will not be able to 

pass this increased cost on to their customers due to the heavy competition in the market. Risk 

management is the key to reducing insurance costs over time; generating good practices will lead 

to a more efficient and safer work environment. Ultimately, this will better protect the 

company’s employees and products. Companies should look more closely at their insurance 

policy. There are many options that can affect a company’s cash flow, such as monthly 

invoicing. Oftentimes there are discounts based on driver safety records and different vehicle 

types. Using services such as safety training and accident reporting properly could also reduce 

costs. If a carrier is renting vehicles, it may be less expensive to explore obtaining insurance 

through the leasing company. 
 B-3 

Mosher, Robert. “Statutory Insurance Requirements for the MCS-90 Endorsement and 

other Minimum Coverage Requirements for Motor Carriers.” Committee on Insurance 

Coverage Litigation, American Bar Association. Vol. 13. Number 1. January/February 

2003. 

This article discusses Federal and state endorsements, the laws behind them, and the procedures 

required in order to comply. The MCS-90 endorsement is an obligation to the public that “sits” 

on top of the company’s insurance. It extends coverage to vehicle(s) involved in a judgment of 

operator negligence even if they are not specifically included or covered under the insurance 

policy to which the endorsement is attached. 

BizStats.com. Trucking and Courier Services U.S. National Industry Profitability Averages 

BizStats reports the profitability averages of the industry. Their data show that 4.4 percent of 

costs can be attributed to insurance. It is the most expensive item, after the costs of goods sold, 

truck expenses, depreciation, repairs, and wages. 

RLS & Associates, Inc. “ODOT Guide to Compliance with Interstate Passenger 

Transportation Regulations.” ODOT Office of Transit. July 2003. 

This guide summarizes the requirements for interstate passenger motor carriers, highlighting the 

differences for private and for-hire operations. 

Schulz, John D. “Carriers Push for Streamlined Insurance Rules; Circuit Court Hears 

Intrastate Deregulation Appeal.” Journal of Commerce/Gale Group. 1995/1999. 

A trucking and business interest alliance is supporting a plan for streamlined motor carrier 

insurance regulation. ATA, NPTC, AIA, ABA, National Industrial Transportation League 

(NITL), and Truck Renting and Leasing Association and others are supporting the creation of a 

national registration and database that would include motor carriers, which are currently ICCregulated, at the USDOT. State enforcement agencies, shippers, insurance carriers, and other 

interested organizations would be able to access the database. Carriers failing to comply with 

motor carrier standards or financial responsibility requirements would have their operations 

suspended, revoked, or denied by the DOT. Plan supporters believe it would make the Single 

State Registration System (SSRS) program unnecessary and obsolete. If passed, 20 percent of the 

revenue generated by registration and insurance filing fees would be passed on to states for 

motor carrier safety enforcement. The current program generates approximately $50 million 

annually for the states. If a Federal registry is created with access for state enforcement, the 

SSRS program could not be justifiable. 

According to the Regular Common Carriers Conference (RCCC), since the Motor Carrier act of 

1980, $750 million in fees and $3.5 billion in administrative costs has been paid to comply with 

state laws. The RCCC estimates the cost to be less than $3 million per year for the DOT to 

provide this service, and recommends that the rest of the fees be passed on to the states for motor 

carrier safety programs. According to the RCCC, it would be unbiased to all carriers, cost-
 B-4 

effective and would improve highway safety programs if the DOT was solely responsible for 

insurance registration by for-hire and private carriers. 

Corsi, Thomas M. and Michelle Smith. “Motor Carrier Industry Profile Study: Financial 

and Operating Performance Profiles by Industry Segment, 2001-2002.” Prepared for 

FMCSA Analysis Division, Office of Information Management. September 2004. 

This study primarily used information from Annual Reports filed with the USDOT by Class I 

(revenues greater than $10 million) and Class II (revenues from $3-10 million) carriers. The 

study focused on some basic measures detailing the financial performance of the for-hire carriers 

and major industry segments. Some of the segments analyzed include many private carriers. 

The financial profile was divided into the following subsections: firm size and revenue 

concentration, profitability, investment profile, and revenue profile. Based on 2002 annual 

operating revenues, the average firm size was $41 million. Three segments exceeded this: lessthan-truckload ($129 million); building materials ($59 million); and household goods 

($58 million). Profitability was based on the operating ratio (total operating expenses/total 

operating revenue) and net profit margin (net income or income after taxes). In 2002, the average 

operating ratio was 98.6, and the net profit margin was 0.99 percent. In 2001, these figures were 

98.3, and 1.16 percent. In 2002, general freight, the largest industry segment by total revenue, 

had a net profit margin of 0.79 percent. The only segments with a 2 percent or higher were: 

building materials, other specialized, and motor vehicles. 

The investment profile was based on three measures: net return on transportation investment, 

return on equity, and long-term debt-to-equity ratio. The median value was more representative 

and less influenced by outliers than the average value; therefore, it was a better measure. Overall, 

the median net return on transportation investment was 4.3 percent in 2001 and 5.0 percent in 

2002. In 2002, the following segments exceeded the median: motor vehicles (13.2 percent), 

package couriers (12.6 percent), less-than-truckload (7.1 percent), household goods (7.0 percent), 

and other specialized (5.5 percent). Motor vehicles, package couriers, and less-than-truckload 

experienced improved median return on transportation investment; while, heavy machinery and 

tank experienced sharp declines. Median return on equity fell from 8 percent in 2001 to 5.4 

percent in 2002. Only packaged goods (7.4 percent) and motor vehicles (8.0 percent) were higher 

than the median in 2002. 

In 2002, long-term debt-to-equity ratios were 0.18 (18 cents for every dollar of equity or capital). 

The motor vehicle segment had the highest median debt-to-equity ratios, while the household 

goods segment had the lowest. The revenue profile was based on revenue per mile and revenue 

per ton. In 2002, the average revenue per mile was $1.98. Less-than-truckload had $2.93 and 

motor vehicles had $2.55. In 2002, the median revenue per ton was $36.15. Household goods 

had $486.92 (including loading and unloading) followed by package carriers with $148.87. 

The operating performance profile productivity measures were average length of haul, average 

load, annual miles per driver, and annual miles per truck. In 2002, the average length of haul was 

452 miles. The haul was much shorter for tank carriers (203 miles) and much longer for 

refrigerated carriers. In 2002, the average load was 16.0 tons; bulk had 22.4, tank had 21.2, 

heavy machinery had 19.2, building material had 18.9, other specialized had 17.3, refrigerated 
 B-5 

had 17.0 and general freight had 16.7. The average annual miles per driver was 82,387 miles. 

This varied from the lowest of 57,524 to 60,236 for less-than-truckload and household goods 

respectively; and highest from 99,635 to 107,380 for building materials and refrigerated 

segments respectively. In 2002, the average annual miles driven per truck was 83,563 miles. This 

ranged from a low of 59,925 to 70,145 miles for the household goods and less-than-truckload 

segments to a high of 111,455 to 132,577 for the refrigerated and package couriers segments 

respectively. 

The Annual Report data provided few direct measures of the safety level of effort made by 

carriers. One option was to look at the percent of carrier’s operating expenses dedicated to 

insurance. However, there was not a way to separate out carriers whose high insurance burdens 

were due to poor safety. Additional data would need to be collected for a successful comparison 

of safety level of effort. 

Harrington, Lisa. “Can You Justify a Private Fleet?” Transportation & Distribution V42, 

n6. June 2001. 

In 1998, Gemini Coating was using for-hire motor carriers to ship its product. The job was 

getting completed, but not to their satisfaction. They decided to use a private fleet to improve 

their customer service by having their drivers strengthen their relationships with their customers. 

They periodically compare the cost of making these trips to less-than-truckload (LTL) freight 

rates to see if the cost of the fleet is reasonable. Their purpose for running a private fleet was to 

improve customer service, eliminate product damage, and give them an added sales tool. After 

their second year of operation, 99.9 percent of customer complaints went away. Gemini’s 

decision to launch a private fleet is far from unique. Big and small companies operate private 

fleets for the same reason. 

Private fleets are under more pressure to show that they add economic value. Top management 

usually views private fleets negatively, as a capital-intensive cost center. However, this could not 

be further from the truth; private fleets provide excellent customer service and can compete 

economically with the best for-hire fleets. 

 The following are many of the factors that go into the decision to operate a private fleet: 

 Fleet mission or purpose – are the costs created balanced out by the value created? 

 Labor – all labor costs must be assessed including benefits 

 Capital investment – transferring investment costs, leasing, and outsourcing must be 

considered on a regular basis 

 Maintenance – only larger corporate fleets have in-house maintenance, most companies 

outsource it 

 Internal resources – management personnel and facilities to supplies must be committed 

 Control – complete control over product delivery, and drivers become the company 

representative and salesperson 

 Corporate philosophy on outsourcing 
 B-6 

Full-service leasing is also an option many private fleets use. In this case, the leasing company 

takes care of all the vehicle maintenance. With flexible lease terms, fleets can keep up with 

technology. It is also a good insurance policy since depreciation costs have risen drastically. 

Roberts, J. “Savior or Necessary Evil.” Equipment World. September 2003. 

Reducing insurance costs starts with close examination of a company’s policy. Many companies 

expect certain coverages are included with their policies until after a claim is filed. Also, 

companies often pay for insurance that is of little or no use to them and should be written out of 

the policy. As theft is of concern, most insurers are requiring that trucks have tracking devices 

installed. Theft prevention insurance costs are the easiest to lower, by implementing simple 

measures such as installing a locked gate, proper lighting, or cameras. The main insurance cost is 

collision insurance, which is best reduced by hiring the right drivers. Checking the driver’s motor 

vehicle report and quality testing are important. 

B.3 Safety and Insurance-related Information 

Corsi, Thomas M., Barnard, Richard, and Gibney, James, with Robert H. Smith School of 

Business/University of Maryland. “Motor Carrier Industry Profile: Linkages Between 

Financial and Safety Performance Among Carriers in Majority Industry Segments.” 

Prepared for FMCSA Analysis Division, USDOT. October 23, 2002. 

A multi-year assessment focusing on a carrier’s safety performance and its financial performance 

was completed by the Supply Chain Management Center of the Robert H. Smith School of 

Business. Carriers’ reviews (CR) were used as a basis for this assessment. Researchers used the 

Annual Report database from the American Trucking Associations and the SafeStat database to 

match carriers’ DOT numbers. A new database was created that contained 656 carrier reviews. 

Of this, 553 received a satisfactory rating, and 103 received an unsatisfactory (7) or a conditional 

(96) rating. CRs are based on the carriers’ recordable crash/accident rates; its driver safety 

review (DRM), safety management review measure (SMRM), and its enforcement severity 

measure (ESM). These reviews were used to create two groups: carriers receiving an overall 

satisfactory CR, and those receiving an unsatisfactory or conditional review. These two groups 

were then compared based on descriptive variables and financial performance variables. 

Descriptive variables were: total ton-miles, and average load, length of haul, driver wage, and 

driver wage as a percentage of the operating expense. Financial variables were the operating 

ratio (operating expense/operating revenues) and return on assets. The researchers used ANOVA 

(analysis of variance) to determine if there was any statistical significance between the two 

groups. They were unable to establish that safety performance is positively correlated to financial 

performance for all carriers.

Ostria, Sergio J. “Evaluation of U.S. Commercial Motor Carrier Industry Challenges and 

Opportunities.” ICF Consulting with George L. Edwards and Associates. March 31, 2003. 

According to the trucking industry, the reasons for higher transport costs are higher insurance 

rates, cost of fuel, and changes to the Hours-of-Service rules. Most of the companies believed 

that the one cost pushing their respective companies out of the market was the high insurance 
 B-7 

costs. The cost has increased 40 percent at a minimum, especially for small firms. These high 

insurance costs can be attributed to the high payouts caused by the events of September 11, 2001 

and the low return on company investments. 

Trucking accident rates have been falling but the liability claims for accidents have been rising, 

creating the need for higher premiums. In addition, the cyclical nature of the trucking business 

and the September 11, 2001 effect also have to be taken into account. The September 11, 2001 

effect can be described as risk managers perceiving a very high level of risk in the United States 

due to the terrorist attacks and other seemingly unpredictable events. 

The trucking industry’s high competition level, along with rising insurance rates, creates a 

dilemma. With so many companies, it is difficult for one to pass their higher overhead costs to 

the consumer, forcing small marginally operating companies out of business. Some do not 

believe the higher costs are a problem, since owner-operator trucking operations have always 

paid a higher insurance rate than larger firms, but now the larger firms’ premiums are merely 

catching up to that of the owner-operators. 

Some firms looking to reduce costs have gone to self-insurance, but most firms are not large 

enough to do that. Most are looking toward curbing risk as well. Self-insured firms typically 

have the most extensive safety requirements, usually having very high requirements to be hired. 

In the private market, they are adding new courses, creating better schedules for drivers, and 

ensuring that dispatchers understand the company safety program. 

Public safety includes instituting new technology and some groups will be putting new cameras 

into the tractor in order to record the drivers’ reactions during unusual driving situations. It is 

believed that companies will be rewarded for maintaining higher trucking standards. Tort reform 

has also taken shape. Today, most compensation has been given to plaintiffs in court cases, but 

recently proposed reform would place the awards in a public fund that would take care of 

problems, therefore reducing the incentives for court cases. Better research is also needed in 

order to better insure companies, thereby helping to motivate better driving techniques and more 

targeted insurance premiums. 
 C-1 

APPENDIX C. STATE-SPECIFIC DETAIL

This appendix provides state-level detail for data provided at the national level in the body of the 

report. 
 C-2 

Table C-1. Carriers and Vehicles Requiring Additional Insurance by State 

Carriers Vehicles 

State 

9-15 Pass. 

Veh. 

16+ Pass. 

Veh. Trucks 

9-15 Pass. 

Veh. 

16+ Pass. 

Veh. Trucks 

AL 3 5 162 6 15 419 

AK 44 80 3,876 81 119 10,793 

AZ 16 30 2,675 28 55 6,808 

AR 7 12 986 18 31 3,327 

CA 41 76 3,976 97 167 13,539 

CO 14 16 1,828 43 35 5,644 

CT 22 58 3,406 29 113 9,369 

DE 1 4 230 2 11 867 

DC 9 19 1,292 16 49 3,626 

FL 31 54 4,361 77 143 11,795 

GA 34 60 6,575 67 120 18,026 

HI 0 0 80 0 0 540 

ID 6 18 4,227 14 35 9,950 

IL 8 19 1,599 12 35 4,519 

IN 45 78 5,882 78 184 18,583 

IA 37 98 8,023 83 184 21,026 

KS 16 26 3,030 28 44 8,487 

KY 62 111 5,241 106 220 12,876 

LA 14 24 3,092 29 47 8,837 

ME 20 33 8,262 43 81 21,769 

MD 30 63 6,981 63 147 18,893 

MA 8 18 1,727 17 42 4,065 

MI 28 55 5,939 46 112 15,037 

MN 21 37 5,955 45 72 16,988 

MS 44 55 5,619 76 107 15,773 

MO 24 43 3,082 35 69 7,561 

MT 2 7 1,146 3 16 2,728 

NE 27 48 6,704 55 102 18,225 

NV 1 4 1,277 5 14 3,774 

NH 15 17 3,443 20 38 8,478 

NJ 7 14 2,951 13 29 6,806 

NM 21 35 6,862 48 66 20,322 

NY 8 10 1,100 14 29 3,089 

NC 6 18 1,134 12 37 3,055 

ND 18 46 8,142 39 120 23,787 

OH 60 110 6,126 127 193 18,837 

OK 25 40 2,341 43 81 6,903 

OR 11 21 2,083 23 37 6,536 

PA 26 79 9,990 60 207 30,453 

PR 0 0 14 0 0 65 
 C-3 

Table C-1. Carriers and Vehicles Requiring Additional Insurance by State (continued) 

Carriers Vehicles 

State 

9-15 Pass. 

Veh. 

16+ Pass. 

Veh. Trucks 

9-15 Pass. 

Veh. 

16+ Pass. 

Veh. Trucks 

RI 4 16 2,873 12 34 5,717 

SC 31 72 2,941 50 113 7,588 

SD 3 3 1,998 4 4 4,720 

TN 43 79 5,864 76 156 14,603 

TX 44 61 5,892 91 140 18,826 

UT 10 10 1,615 32 26 4,711 

VT 30 46 4,422 58 95 13,412 

VA 2 4 1,349 13 14 2,990 

WA 22 39 2,037 46 101 7,128 

WV 36 66 4,734 75 151 11,953 

WI 14 17 3,474 30 57 7,778 

WY 8 6 1,108 22 17 2,931 

TOTAL 1,059 1,960 189,726 2,110 4,114 524,532 
C-4 

Table C-2. NAICS Codes, SBA Size Threshold, and Annual Revenue for Selected Trucking In

Table C-2 

Industry Annual Revenue 

NAICS 

SBA Size 

Threshold 0-99,999 

100,000- 

499,999 

500,000- 

999,999 

1,000,000-

4,999,999 

5,000,000-

9,999,999 

10,000,000-

49,999,999 

50,000,000

99,999,999 

Construction 

23 $31 million Firms 126,426 309,615 106,563 125,801 17,063 13,445 1,306 

 Establishments 126,427 309,628 106,586 126,115 17,437 14,842 2,172  Employment 141,003 836,835 651,896 1,759,968 659,976 1,097,965 266,220  Ann. Payroll 2,098,519 19,368,315 18,950,754 64,530,216 29,068,144 52,885,698 13,648,080  Est. Receipts 6,851,025 77,889,212 75,337,040 264,729,368 117,124,687 252,887,590 78,520,911 

Waste management services 

562 $6.5 million Firms 2,257 5,778 2,303 2,904 461 343 35 

 Establishments 2,258 5,782 2,319 3,023 570 644 161  Employment 2,796 18,475 17,380 53,916 22,043 35,550 8,591  Ann. Payroll 35,253 399,296 469,599 1,809,219 868,033 1,463,879 331,382  Est. Receipts 113,201 1,511,954 1,618,388 6,082,263 2,978,308 5,512,889 1,393,310 

Retail 

44-45 $6.5 million Firms 107,685 283,980 127,485 163,988 22,606 23,502 3,770 

 Establishments 107,797 285,503 130,422 187,755 36,831 63,340 22,418  Employment 136,834 852,418 731,169 1,916,296 660,149 1,445,334 564,791  Ann. Payroll 1,202,824 11,789,765 12,982,451 42,574,140 17,393,136 44,394,638 19,119,175  Est. Receipts 5,564,818 74,831,781 90,260,047 340,343,082 150,451,271 470,383,155 224,870,24

Repair and Maintenance 

811 $6.5 million Firms 47,153 113,614 31,480 19,750 1,258 1,073 218 
C-5 

 Establishments 47,179 113,858 31,931 23,539 2,872 4,188 1,372  Employment 57,484 359,405 243,985 335,875 59,816 87,339 23,865  Ann. Payroll 673,068 7,459,646 6,465,361 10,769,784 2,192,707 2,967,684 945,850  Est. Receipts 2,484,810 28,541,375 21,619,759 34,982,906 7,275,987 10,609,247 3,172,169 

Note that for Table C-2 and all subsequent tables in this Appendix, all data in any annual revenue or employee category bethreshold are considered to apply to small businesses. For categories that contained the SBA size threshold, a weighted pr

that category are considered to apply to small businesses. For example, for retail firms, the $6.5 million size threshold falls million annual revenue category. Therefore, all firms in the first three annual revenue categories and 30 percent ([6.5–5]/[1

the firms in the $5 to $10 million annual revenue category are considered small businesses. 
C-6 

Table C-3. NAICS Codes, SBA Size Threshold, and Number of Employees for Additional Selected Tr

Table C-3 

Industry Number of Employees 

NAICS 

SBA Size 

Threshold 0 1-4 5-9 10-19 20-9

Forestry / Logging 

113 500 emp Firms 1,538 5,694 2,476 1,312 617 

 Establishments 1,539 5,699 2,477 1,313 633  Employment - 12,377 16,358 17,318  Ann. Payroll 51,039 282,256 418,104 472,601 

Manufacturing 

31-33 500 emp Firms 20,879 96,067 55,257 46,910 58,246 

 Establishments 20,912 96,102 55,347 47,236 62,457  Employment - 217,108 369,362 639,999 2,381,283  Ann. Payroll 2,222,484 5,683,675 10,597,229 20,107,400 82,441,414 

Wholesalers 

42 100 emp Firms 35,613 157,159 60,120 40,953 37,798 

 Establishments 35,730 157,555 61,402 44,252 53,597  Employment - 329,404 396,372 546,730 1,385,840  Ann. Payroll 1,702,748 11,731,561 14,909,733 21,691,808 57,757,419 
C-7 

Table C-4. Number of Small and Large Business in Selected Trucking Industries 

Table C-4 

Industry 

NAICS 

SBA Size 

Threshold 

Small 

Business Total 

Large Business 

Total Total 

Small Business 

Percent 

Construction 

23 $31 million Firms 692,191 9,259 701,449 98.7% 

 Establishments 693,614 16,711 710,325 97.6%  Employment 4,598,661 1,708,710 6,307,370 72.9%  Ann. Payroll 160,458,797 86,843,665 247,302,462 64.9%  Est. Receipts 668,375,127 509,168,560 1,177,543,687 56.8% 

Waste management services 

562 $6.5 million Firms 13,380 804 14,184 94.3% 

 Establishments 13,553 4,145 17,698 76.6%  Employment 99,180 201,400 300,580 33.0%  Ann. Payroll 2,973,777 8,661,240 11,635,017 25.6%  Est. Receipts 10,219,298 37,984,446 48,203,744 21.2% 

Retail 

44-45 $6.5 million Firms 689,920 46,210 736,130 93.7% 

 Establishments 722,526 403,167 1,125,693 64.2%  Employment 3,834,762 10,985,142 14,819,904 25.9%  Ann. Payroll 73,767,121 246,939,905 320,707,026 23.0%  Est. Receipts 556,135,109 2,578,317,588 3,134,452,697 17.7% 

Repair and Maintenance 

811 $6.5 million Firms 212,374 2,709 215,083 98.7% 

 Establishments 217,369 15,865 233,234 93.2%  Employment 1,014,694 320,181 1,334,875 76.0%  Ann. Payroll 26,025,671 12,246,080 38,271,751 68.0%  Est. Receipts 89,811,646 40,798,873 130,610,519 68.8% 

Forestry / Logging 

113 500 emp Firms 11,675 33 11,708 99.7% 

 Establishments 11,722 192 11,914 98.4%  Employment 68,419 7,399 75,818 90.2% 
C-8 

 Ann. Payroll 1,877,601 382,129 2,259,730 83.1% 

Manufacturing 

31-33 500 emp Firms 291,494 4,102 295,596 98.6% 

 Establishments 305,843 36,006 341,849 89.5%  Employment 6,102,010 8,030,010 14,132,020 43.2%  Ann. Payroll 212,661,904 363,395,993 576,057,897 36.9% 

Wholesalers 

42 100 emp Firms 331,643 10,807 342,450 96.8% 

 Establishments 352,536 80,001 432,537 81.5%  Employment 2,658,346 3,205,514 5,863,860 45.3%  Ann. Payroll 107,793,269 164,362,931 272,156,200 39.6% 

Firms 2,242,677 73,923 2,316,600 96.8% 

Establishments 2,317,163 556,087 2,873,250 80.6% 

Employment 18,376,071 24,458,356 42,834,427 42.9% 

Ann. Payroll 585,558,140 882,831,943 1,468,390,083 39.9% 

Truck Totals 

Est. Receipts 1,324,541,181 3,166,269,466 4,490,810,647 29.5% 

 Note: numbers may not add to totals due to rounding.
C-9 

Table C-5. NAICS Codes, SBA Size Threshold, and Annual Revenue for Selected Passenger-carry

Table C-5 

Industry Annual Revenue 

NAICS 

SBA Size 

Threshold 0-99,999 

100,000- 

499,999 

500,000- 

999,999 

1,000,000-

4,999,999 

5,000,000-

9,999,999 

10,000,000-

49,999,999 

50,00

99,99

Educational services 

61 

$11.5 

million Firms 19,608 23,589 7,389 10,755 1,991 1,931 338 

 Establishments 19,617 23,692 7,590 12,166 2,986 4,065 1,068  Employment 73,061 144,228 115,573 444,407 202,134 556,528 320,85 Ann. Payroll 1,208,428 2,040,663 2,113,921 10,243,942 5,446,772 13,778,014 7,230 Est. Receipts 908,228 5,647,731 5,235,347 22,698,180 12,906,215 35,516,971 19,314

Nursing and residential care facilities 

623 

$6.5 

million Firms 5,489 9,646 3,457 8,191 2,862 2,420 252 

 Establishments 5,497 9,760 3,730 12,978 7,439 14,399 3,810  Employment 70,830 502,291 407,644 700,813 214,0 Ann. Payroll 1,159,455 9,440,673 8,643,781 16,034,636 4,657 Est. Receipts 2,467,333 19,343,333 17,773,345 34,241,886 10,185

Arts, entertainment, and recreation 

71 

$6.5 

million Firms 29,293 42,180 13,741 14,181 1,797 1,242 201 

 Establishments 29,302 42,249 13,925 15,439 2,376 2,858 716  Employment 41,985 194,472 172,425 453,082 157,817 240,768 88,364  Ann. Payroll 483,539 3,152,398 3,097,117 10,021,082 4,094,784 6,719,833 4,150 Est. Receipts 1,378,956 10,346,009 9,616,506 28,818,765 11,461,393 21,302,762 10,474

Religious organizations 

8131 

$6.5 

million Firms 68,164 71,962 16,466 13,966 1,139 525 42 
C-10 

 Establishments 68,164 71,964 16,469 14,011 1,168 671 53  Employment 232,669 382,634 223,720 487,880 111,349 111,878 21,57 Ann. Payroll 2,533,914 4,717,782 3,190,328 7,578,242 2,102,162 2,445,679 550,86 Est. Receipts 2,774,665 16,732,659 11,480,290 27,360,127 7,558,585 8,792,099 1,983

Table C-6. Number of Small and Large Business in Selected Passenger-carrying Industries 

Table C-6 

Industry 

NAICS 

SBA Size 

Threshold 

Small Business 

Total 

Large Business 

Total Total 

Small Business 

Percent 

Educational services 

61 $11.5 million Firms 63,407 2,526 65,933 96.2% 

 Establishments 66,163 7,538 73,701 89.8%  Employment 986,983 1,714,692 2,701,675 36.5%  Ann. Payroll 21,257,980 50,703,872 71,961,852 29.5%  Est. Receipts 47,879,684 132,399,155 180,278,839 26.6% 

Nursing and residential care facilities 

623 $6.5 million Firms 27,642 5,078 32,720 84.5% 

 Establishments 34,197 33,703 67,900 50.4%  Employment 776,064 1,994,601 2,770,665 28.0%  Ann. Payroll 14,265,637 44,684,854 58,950,491 24.2%  Est. Receipts 29,760,064 96,507,683 126,267,746 23.6% 

Arts, entertainment, and recreation 

71 $6.5 million Firms 99,934 3,109 103,043 97.0% 

 Establishments 92.1% 
C-11 

101,628 8,747 110,375 

 Employment 909,309 891,682 1,800,991 50.5%  Ann. Payroll 17,982,571 29,741,806 47,724,377 37.7%  Est. Receipts 53,598,654 93,955,615 147,554,269 36.3% 

Religious organizations 

8131 $6.5 million Firms 170,900 1,411 172,311 99.2% 

 Establishments 170,958 1,604 172,562 99.1%  Employment 1,360,308 278,607 1,638,915 83.0%  Ann. Payroll 18,650,915 6,192,829 24,843,744 75.1%  Est. Receipts 58,347,741 24,562,644 82,910,385 82.2% 

Firms 361,882 12,125 374,007 96.8% Establishments 372,946 51,592 424,538 87.8% Employment 4,032,664 4,879,582 8,912,246 45.2% Ann. Payroll 72,157,103 131,323,361 203,480,464 35.5% 

Passenger Vehicle Totals 

Est. Receipts 189,586,142 347,425,097 537,011,239 35.3% 

 Note: numbers may not add to totals due to rounding.
C-12 
C-13

For more information on the Federal 

Motor Carrier Safety Administration, check 

out our website at www.fmcsa.dot.gov. Report No. FMCSA-PSV-07-001