Minimum Levels of Financial Responsibility are the FMCSA rules that require motor carriers to carry minimum amounts of public liability insurance or equivalent security. Found in 49 CFR Part 387, they set dollar minimums by type of operation and cargo, require proof of coverage through the MCS-90 endorsement or MCS-82 surety bond, and make sure crash victims can recover damages even if a carrier cannot pay.
The minimums range from $750,000 for for-hire carriers of general freight to $5 million for certain hazardous materials and large passenger vehicles. A carrier that operates without the required coverage cannot legally run its trucks or buses, and for-hire carriers cannot get or keep operating authority.
What Is Part 387?
49 CFR Part 387 implements the financial responsibility provisions of the Motor Carrier Act of 1980 and related laws. Financial responsibility means financial reserves, such as insurance policies or surety bonds, sufficient to satisfy liability amounts set in the rule. Public liability means liability for bodily injury or property damage, including liability for environmental restoration.
The part has four subparts:
- Subpart A: Motor carriers of property
- Subpart B: Motor carriers of passengers
- Subpart C: Surety bonds and insurance filings for carriers and property brokers with FMCSA operating authority
- Subpart D: Surety bonds and insurance for freight forwarders
Who Must Comply?
Under 387.3, Subpart A applies to for-hire motor carriers transporting property in interstate or foreign commerce, and to motor carriers transporting hazardous materials, hazardous substances or hazardous wastes in interstate, foreign or intrastate commerce. Vehicles with a gross vehicle weight rating under 10,001 pounds are generally excluded, except when they carry the highest-hazard materials listed in the schedule.
A private carrier hauling only its own non-hazardous goods is not subject to the Subpart A minimums, although it still needs insurance under state law and for its own protection. Private carriers that haul covered hazardous materials are subject to the hazmat minimums.
Subpart B applies to for-hire motor carriers of passengers operating in interstate or foreign commerce.
Key Requirements
Minimums for property carriers
The schedule of limits in 387.9 sets these public liability minimums, which have been in effect since 1985:
- $750,000: For-hire carriers of non-hazardous property in interstate or foreign commerce, vehicles with a GVWR of 10,001 pounds or more
- $1,000,000: For-hire and private carriers of oil listed in 49 CFR 172.101, and of hazardous wastes, materials or substances not covered by the $5 million tier, in interstate or foreign commerce in any quantity, or in intrastate commerce in bulk only, vehicles 10,001 pounds or more
- $5,000,000: For-hire and private carriers of specified bulk hazardous materials, including certain hazardous substances in cargo tanks, portable tanks or hoppers, bulk Division 1.1, 1.2 and 1.3 explosives, certain bulk Division 2.1, 2.2, 2.3 and 6.1 materials, and highway route controlled quantities of Class 7 radioactive material, in interstate, foreign or intrastate commerce, vehicles 10,001 pounds or more
- $5,000,000: For-hire and private carriers using vehicles under 10,001 pounds to haul certain bulk Division 1.1, 1.2 or 1.3 explosives, bulk Division 2.3 Hazard Zone A or Division 6.1 Packing Group I Hazard Zone A materials, or highway route controlled quantities of Class 7 material in interstate or foreign commerce
For carriers that hold FMCSA operating authority, 387.303 also requires filing proof with FMCSA. FMCSA's insurance filing requirements page lists $300,000 for for-hire carriers of non-hazardous property using vehicles under 10,001 pounds, $750,000 at 10,001 pounds or more, and $5,000 of cargo insurance for household goods carriers.
Minimums for passenger carriers
Under 387.33, for-hire passenger carriers must carry:
- $5,000,000 for vehicles with a seating capacity of 16 or more passengers, including the driver
- $1,500,000 for vehicles with a seating capacity of 15 or fewer passengers, including the driver
Section 387.27(b) excludes vehicles carrying only school children and teachers to or from school, certain taxicabs with fewer than 7 seats, vehicles carrying fewer than 16 people in a single daily round trip to commute to work, and certain school-sponsored extracurricular trips.
Brokers and freight forwarders
Property brokers and freight forwarders do not carry public liability insurance under Part 387, but they must maintain a $75,000 surety bond or trust fund on file with FMCSA, according to FMCSA's filing requirements page.
The MCS-90 Endorsement
The MCS-90 is the federally prescribed endorsement attached to a motor carrier's liability policy. In it, the insurer agrees to pay, within the required limits, any final judgment recovered against the insured carrier for public liability resulting from negligence in operating vehicles subject to the financial responsibility requirements. The insurer must pay regardless of the carrier's financial condition, insolvency or bankruptcy, and even if the policy terms would otherwise exclude the claim.
The endorsement protects the public, not the carrier. If the insurer pays a claim it would not have owed under the policy, the carrier must reimburse the insurer. Passenger carriers use the equivalent Form MCS-90B, and carriers proving coverage with a bond use Form MCS-82 or MCS-82B.
Proof and Recordkeeping
Under 387.7, a carrier may not operate a motor vehicle until the required coverage is in effect. Key points:
- Continuous coverage: Policies, bonds and endorsements must stay in effect until terminated. Cancellation requires 35 days' written notice by the insurer or the carrier.
- Forms of proof: Form MCS-90 issued by an insurer, Form MCS-82 issued by a surety, or a written FMCSA decision authorizing self-insurance under 387.309, as long as the carrier keeps a satisfactory safety rating.
- Location: Proof must be kept at the carrier's principal place of business and produced on reasonable request by the public.
- Foreign carriers: Vehicles operated by carriers domiciled in a contiguous foreign country must carry a legible English copy of the MCS-90 or MCS-82, and vehicles without it may be denied entry.
Penalties and Enforcement
Appendix B to 49 CFR Part 386, adjusted each year for inflation, currently sets a maximum civil penalty of $21,114 for financial responsibility violations, and each day of a continuing violation is a separate offense. For carriers with operating authority, a lapse in the insurance filing leads FMCSA to begin revoking that authority, which stops the carrier from operating for hire.
Common Compliance Mistakes
- Carrying only the federal minimum when shipper contracts or the actual cargo require more
- Hauling a new hazmat commodity without checking whether it moves the fleet into the $1 million or $5 million tier
- Missing a cancellation notice and running vehicles during a lapse
- Business name or address on the insurance filing not matching FMCSA registration records exactly
- Not keeping a copy of the MCS-90 at the principal place of business
- Assuming a private fleet that occasionally hauls for others for compensation is still a private carrier
How to Comply: Step by Step
- Classify your operation. Determine whether you are a for-hire or private carrier, and whether you haul property or passengers.
- Review your cargo. Compare the hazardous materials you transport to the schedule in 387.9 to find your required tier.
- Buy adequate coverage. Make sure the liability policy limit meets or exceeds the required minimum and includes the MCS-90 endorsement.
- File with FMCSA if required. Have your insurer submit the required filing if you hold operating authority.
- Keep proof on file. Store the current MCS-90 or MCS-82 at your principal place of business.
- Track renewals. Set reminders well ahead of expiration and watch for cancellation notices.
- Recheck after changes. Review coverage whenever you add vehicles, new commodities or new types of service.
How SMS360 Helps
The SMS360 DOT Compliance module helps fleets keep insurance and financial responsibility records alongside their other DOT documents. Teams can store policies and MCS-90 endorsements, track expiration dates with automatic reminders, and assign tasks when a renewal or filing update is due. Having proof of coverage organized with driver, vehicle and accident register records makes it easier to respond to auditors, shippers and insurers.
Frequently Asked Questions
What is the minimum insurance for a for-hire trucking company?
A for-hire carrier of non-hazardous property in interstate commerce must carry at least $750,000 in public liability coverage for vehicles of 10,001 pounds or more. Carriers of certain hazardous materials need $1 million or $5 million depending on the commodity.
Do private fleets need to meet Part 387 minimums?
Private carriers hauling only their own non-hazardous property are not covered by the Subpart A minimums. Private carriers that transport covered hazardous materials must meet the $1 million or $5 million levels, and state insurance laws still apply to all fleets.
What is an MCS-90 endorsement?
It is a federally required endorsement to a carrier's liability policy. The insurer agrees to pay final judgments for public liability up to the required minimum, even if the policy would otherwise exclude the claim, and the carrier must reimburse the insurer for any such payment.
How much insurance do passenger carriers need?
For-hire passenger carriers need $5 million for vehicles seating 16 or more passengers, including the driver, and $1.5 million for vehicles seating 15 or fewer. Some operations, such as school bus service, are excluded.
