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Recent Transportation Crashes Highlight Shortcomings of Federal Minimum Insurance Limits

By: Allan M. Siegel

In the wake of several large transportation accidents, including a fatal bus collision in Baltimore and another fatal crash in California, victim advocates are highlighting the shortfalls of federal minimum insurance limits for commercial vehicles. Low policy limits are often not enough to cover victims’ damages, especially when catastrophic accidents cause large scale damage and numerous injuries or death.

DC Bus Accident Lawyer

As we’ve seen in large-scale bus accidents, victims face uphill battles. Bus passengers are not protected by the same robust safety standards as compared to passengers of other forms of public transportation. They must also contend with less insurance to compensate their physical, financial, and emotional injuries. This is a serious shortcoming, according to safety experts, government regulators, and lawyers who handle lawsuits against bus companies.

To put the limit in perspective, consider the Palm Springs bus accident that resulted in numerous injuries and 13 deaths. Victims and families affected by that crash will have to be divide the $5 million minimum insurance policy held by the company which operated the bus. That means the losses and future needs of dozens passengers and their survivors will rely on a share of the $5 million.

Here are a few important facts about the insurance minimum:

  • The $5-million insurance minimum was created in 1982 during the deregulation of the bus industry. Until that point, bus riders were covered by a miniscule $5,000 minimum policy limit set during the 1930s.
  • Since 1982, inflation and rising costs of medical care have significantly devalued what $5 million can cover for an injured victim or a family that has lost a loved one. When adjusted for inflation over 30+ years, it equates to more than $21 million.
  • Minimum insurance limits covering bus passengers are less than those available to victims of airline passengers and their survivors, as well as train operators like Amtrak.
  • In 2014, the Federal Motor Carrier Safety Administration pushed for an increase of the $5 million minimum. The FMCSA states the minimums are “inadequate to fully cover the costs of some crashes in light of increased medical costs and revised value of statistical life.”

As is often the case, bus operators, trucking companies, and the insurance industry have pushed back against raising the minimum policy limit. While opponents argue against increases because they would increase operating costs, others contend that weeding out companies which shouldn’t be carrying passengers without adequate protection could be an added benefit for public safety.

Minimum insurance limits for bus companies are a serious issue, and, by way of recent events, one that may again be thrust into the national conversation At Chaikin, Sherman, Cammarata & Siegel, P.C. we often see companies and insurers that place profits over people. When tragedies like those of late happen, they remind us all of the real and truly tragic consequences that can result.

Victims injured in public transportation accidents and accidents involving commercial vehicles like buses or commercial trucks can find the support they need by working with proven lawyers. Our firm understands the difficulties involved in these cases, and how to explore all avenues for compensation so victims and families can recover what they need to repair their lives and move on as best they can. If you have questions after any type of auto accident, contact our attorneys to discuss your case.