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Katie Nussle

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Statutory Insurance Requirements, MCS-90 Endorsement and Other Minimum Coverage Requirements
I. Introduction

The use of leased or non-owned equipment is common in trucking operations. When an accident occurs these arrangements can implicate many parties. For example, when a tractor and tow trailer are involved, the accident arises out of the use of both regardless of which part of the unit was actually involved in the accident. Blue Bird Body Co. v. Ryder Truck Rental, Inc., 583 F.2d 717, 721 (5th Cir. 1978). Cartans, Inc. v. Ryder Truck Rental, Inc., 836 F.2d 163, 165 (3rd Cir. 1988). When a licensed motor carrier leases, borrows, or hires a truck and driver, the lessee must assume control and responsibility of the leased equipment for the trip. 49 C.F.R. § 376, 12(c). Under such arrangements, the owner and operator of the tractor, the owner of the trailer, and the lessee's coverage could be implicated. In such situations, the coverage issues most often focus on which policy, among several, responds to the accident. The allocation of loss and priority of coverage between insurers usually depends on the insuring clause, exclusions, and excess provisions in the policies. However, when a negligent operator, owner or permit hauler appears to lack coverage, an understanding of state and federal financial responsibility requirements is important because these requirements may create coverage for the accident where it would not otherwise exist.

The principal means by which motor carriers meet financial responsibility requirements is through the purchase of insurance and by filing proof of insurance with the applicable government agencies. Whenever insurance is used in motor carrier operations to meet financial responsibility laws the policies must be endorsed to extend financial responsibility to the public. In the case of interstate motor carrier, these endorsements are certifications by the motor carrier’s insurer that the policies meet the requirements imposed by federal law. Indeed, the first order of business in investigating coverage for any accident involving an interstate motor carrier operating with a U.S. D.O.T permit may be to confirm that financial responsibility filings have been made with the Federal Motor Carrier Safety Administration (“FMCSA”). In some cases, these mandatory endorsements dramatically expand the scope of coverage in order to protect the public. For intrastate carriers and for some private carriers which are otherwise exempt from federal regulation, equivalent state laws require that insurance filings be made with a state authority such as the Motor Carrier Division of the Texas Department of Transportation. This paper will discuss federal and state endorsements, the public policy underlying them, and the procedures by which interstate carriers and intrastate carriers file proof of financial responsibility as a condition to obtaining operating permits.

II. Federal Regulation of Interstate Motor Carriers

Federal Regulations imposing financial responsibility requirements on interstate motor carriers have changed little over the years, but the agencies of government that administer these laws have dramatically changed. As part of the Motor Carrier Act of 1980, Congress authorized the Interstate Commerce Commission (“ICC”) to implement financial responsibility regulations and to impose financial responsibility as a condition to obtaining interstate operating permits. 49 U.S.C.A. § 13906 (West 1997). Thus, the original regulations on financial responsibility were first promulgated by the ICC, and this explains why financial responsibility endorsements often are referred to as “ICC Endorsements.” However, in 1995 Congress abolished the ICC, in part, because of competing jurisdiction between the ICC and the Department of Transportation. See ICC Termination Act of 1995. Pub. L. 104-88, December 29, 1995, 109 Stat. 803. Today, most of the responsibilities, duties, and powers related to motor carrier safety, including administration of financial responsibility laws, are vested with a sub agency of the Department of Transportation, known as the Federal Motor Carrier Safety Administration. (“FMCSA”) Pub. L. 106-159 effective December 9, 1999. These changes have had little impact on the substance of the original financial responsibility regulations promulgated by the Interstate Commerce Commission; only the forms and procedures have changed.

a. Specific Financial Responsibility Requirements

Minimum insurance requirements for private and for hire motor carriers are set out in 49 C.F.R. §387.7. Subject to certain exceptions, these regulations stipulate that no motor carrier shall operate a commercial motor vehicle in interstate commerce until the motor carrier has first obtained and has in effect the minimum levels of financial responsibility established by the FMCSA. Id. In order to obtain United States DOT operating authority, the motor carrier must establish financial responsibility through insurance, bond, or self-insurance with limits that depend on the carriage and type of commodity being transported. See 49 C.F.R. § 387.9.

  • For hire motor carriers operating a vehicle with a gross vehicle weight rating exceeding 10,000 lbs. and which transport non-hazardous property, must establish financial responsibility coverage of at least $750,000.
  • For hire and private motor carriers operating in interstate or foreign commerce which operate vehicles with gross weight ratings exceeding 10,000 lbs. and which haul oil, hazardous waste or hazardous materials or substances must establish financial responsibility coverage of not less than $1,000,000.
  • Both for hire and private carriers operating portable tanks, cargo or hopper-type vehicles with capacities in excess of 3,500 water gallons must obtain financial responsibility limits of at least $5,000,000.

Interstate motor carriers of passengers, i.e., buses, are also subject to financial responsibility requirements. Subject to certain exceptions, buses must carry assurances of financial responsibility in the same manner as for hire motor carriers. Effective November 19, 1985, the limits for buses are:

  • Any vehicle with a seating capacity of 16 passengers or more— $5,000,000.
  • Any vehicle with a seating capacity of 15 passengers or less— $1,500,000.

Exceptions include: Buses transporting only school children and teachers to or from school; vehicles providing taxicab service with a seating capacity of less than seven passengers; a motor vehicle carrying less than sixteen individuals in a single daily round trip to commute to and from work; and vehicles operated by a motor carrier under contract providing transportation of primary, and secondary students for extracurricular trips organized, sponsored. 49 C.F.R. § 387.27(b).

b. Assurance to the Public of Financial Responsibility

As evidence of having met the foregoing requirements, carriers must cause their insurance policies to be endorsed for public liability under Sections 29 and 20 of the Motor Carrier Safety Act of 1980. See 49 C.F.R. § 387.15; 49 C.F.R. § 387.39 (for busses). The most widely-used species of endorsement over the years has been the MCS-90. Today, however, one-half dozen similar forms are in use, depending upon how the motor carrier chooses to meet its financial responsibility requirements. Two of the most widely used FMCSA approved forms in use today are:

  • Form BMC 91 (used when the entire amount of financial responsibility is provided under one policy); and
  • Form BMC 91x (used when the motor carrier fulfills its financial responsibility requirements by layering liability insurance coverage).
  • Financial responsibility for buses may take the form of endorsements to policies of insurance or surety bonds. 49 C.F.R. § 387.31. Motor carriers of passengers use MCS 90B.

The endorsements, insurance filings and accompanying forms are public information and registered DOT carriers must keep a copy on file at their principal place of business and produce such information to the public for inspection. 49 C.F.R. § 387.7(e); 49 C.F.R. § 387.29 same for buses; 49 C.F.R. § 387.7(b)(1); 49 C.F.R. § 387.31(b)(1) (for busses). Access to financial responsibility filing is available through the FMCSA, and insurers may file proof of financial responsibility electronically. Such forms may be accessed via the FMCSA’s web site at Cancellation of DOT financial responsibility endorsements may only be effected by giving 35 days’ notice in writing to the motor carrier commencing from the day the notice is mailed and with 30 days’ notice to the FMCSA, effective the date the notice is received by the FMCSA at its offices in Washington, D.C. 49 C.F.R. § 387.15.

III. Intrastate Motor Carriers, State Financial Responsibility, Requirements and Single State Registration
a. Single State Registration of Interstate Motor Carriers

While the FMCSA is the primary repository for financial responsibility filings and has exclusive jurisdiction over interstate carriers, state agencies play an important role in processing paperwork. As part of further reorganization within the Department of Transportation during the 1990s, Congress enacted a scheme of "Single State Registration" (the “SSRS”). 49 U.S.C.A. § 14504 (West 1997). Formerly, once an Interstate Motor Carrier received an operating permit from the ICC, the carrier would thereafter have to register in all states in which the carrier operated. The old system featured the use of “bingo stamps,” where stamps issued by each individual state would be attached to the motor carrier's ICC permit. Congress directed the DOT to eliminate the bingo stamp system through Single State Registration. Only thirty-seven states are presently participants, however, in the Single State Registration System. Texas is one of them. 43 Tex. Admin. Code § 18.17.

Under the SSRS system, an interstate motor carrier chooses its base registration state and file a copy of the carrier's proof of insurance along with its application. Once the application is approved the state issues a registration receipt which authorizes the registrant motor carrier to operate in all jurisdictions under its federal permit. 43 Tex. Admin. Code § 18.17(b). A copy of the registration receipt must be carried in the cab and presented on demand for inspection by the Department of Public Safety or any other law enforcement agency. 43 Tex. Admin. Code § 18.17(d)(1). In Texas, the SSRS is administered by the Texas Department of Transportation, Motor Carrier Division. Information concerning registered interstate motor carriers can be accessed through the Department’s web site at

b. Intrastate Registration

Although interstate motor carriers must provide proof of financial responsibility in accordance with the regulations of the FMCSA, the DOT's jurisdiction does not extend to intrastate trucking operations. 49 USCA § 13501(a) (West 1997). Trucking operations conducted by subsidiaries of a corporate family and which involve the transportation of goods or commodities of the parent corporation also fall outside of the DOT's jurisdiction. Id. at § 13505(b). Motor vehicles controlled and operated by agricultural cooperative associations are also exempt. 49 U.S.C.A. § 13506(a)(5) (West Supp. 2002). Thus, a large percentage of commercial motor vehicles on the streets are exempt from DOT regulation. As a practical matter, many private or corporate trucking operations will make insurance filings with the FMCSA and the states or states of registration to make sure that their fleet operations meets all financial security requirements of both jurisdictions. For example, corporate risk managers might choose dual filings to ensure that certain kinds of back haul operations would be covered even though their fleet operations may otherwise be exempt from DOT regulations. Thus, the Texas financial responsibility laws for commercial motor vehicles are highly relevant to a large number of vehicles, that are otherwise exempt from federal requirements. Tex. Transp. Code § 643.101 et. seq. (Vernons 1999).

For intrastate motor carriers and private carriers otherwise exempt from DOT jurisdiction, Texas maintains a separate statutory and regulatory scheme for financial responsibility. See Tex. Transp. Code § 642.002 et seq. (Vernons 1997). Unless exempted, all operators of commercial motor vehicles in Texas must provide proof of financial responsibility in amounts determined by the Texas DOT. Cotton vehicles and farm vehicles with gross weight ratings of less than 48,000 pounds are exempt. 43 Tex. Admin. Code § 18.2(B). As of August 1, 2002, the required limits of financial responsibility in Texas are:


Type of Vehicle
Minimum Insurance Level
Tow trucks (gross vehicle weight less than 26,000 lbs.)
Buses designed to transport more than 15 passengers (including the driver), but less than 26 passengers (not including the driver)
Commercial motor vehicles which are buses with a seating capacity of 15 passengers or less (including the driver) operated by a foreign motor carrier and foreign motor private carrier as defined in 49 U.S.C. §13102.
Buses designed to transport 26 passengers or more (not including the driver)
Commercial motor vehicles which are buses with a seating capacity of 16 passengers or more (including the driver) operated by a foreign motor carrier or foreign motor private carrier as defined in 49 U.S.C. §13102.
Farm trucks (gross vehicle weight 48,000 lbs. or more)
Commercial motor vehicles (gross vehicle weight in excess of 26,000 lbs.), including tow trucks
Commercial motor vehicles, as defined in 49 C.F.R. §390.5
Commercial motor vehicles - oil listed in 49 C.R.F. §172.101; hazardous waste, hazardous materials and hazardous substances defined in 49 C.F.R. §171.8 and listed in 49 C.F.R. §172.101, but not mentioned in item 10 of this table.
Commercial motor vehicles – Hazardous substances, as defined in 49 C.F.R. §171.8 transported in cargo tanks, portable tanks, or hopper-type vehicles with capacities in excess of 3,500 water gallons; or in bulk class A or B explosives, poison gas (Poison A), liquefied compressed gas or compressed gas; or highway route controlled quantity radioactive materials as defined in 49 C.F.R. §173.403. Any quantity of class A or B explosives; any quantify of poison gas (Poison A); or highway route controlled quantity radioactive materials as defined on 49 C.F.R. §173.403.


Intrastate carriers registering in Texas must prove financial responsibility by filling with the Texas DOT a Form E issued by an insurance company licensed in the State of Texas, countersigned by an authorized agent, or issued by a surplus lines insurer that meets the requirements of Insurance Code Article 1.14-2. 43 Tex. Admin. Code § 18.16(e)(1)(4). The registering intrastate motor carrier must also file a list of insured vehicles with the Texas DOT and once the application is approved a Certificate of Registration is issued and a highlighted page of the motor carrier's list of vehicles is attached to the registration certificate. That document constitutes the equivalent of a "cab card" which must be maintained in the tractor and presented to any department or inspector who may be requesting it. 43 Tex. Admin. Code § 18.3(c)(B)(ii). Special rules exist for short term lease and substitute vehicles, defined as a lease of 30 days or less. For short term leases of equipment to registered motor carriers, Texas places the responsibility for filing proof of insurance on the lessor. 43 Tex. Admin. Code § 18.19(b). Under such arrangements the motor carrier will carry only a copy of the lease in the cab of the vehicle. Id.