I want to thank our friend and partner at Cordell & Co. Insurance Agency, Nancy Manasco, for the question, and, in fact, this is a really great question we get asked frequently.
If our automobile liability policy shows a $1,000,000 limit, why does the MCS-90 and filing only show a $750,000 limit?
The MCS-90 is not insurance. Think of it more as evidence of insurance and financial responsibility. The minimum liability requirements are as follows:
• Non-hazardous cargo – $750,000
• Oil, hazardous waste, and other hazardous materials – $1,000,000
• Portable tanks and hoppers over 3,500 gallons – $5,000,000
I think more important, much like a surety, if coverage is paid and due to the fact that the filing is active, the insurer could subrogate against the motor carrier. Here is an example of how this could happen: The policy is cancelled or lapsed, but the filing is not cancelled. This is particularly prevalent with non-pay cancellation where we may only give 10 days’ notice, but cancellation of the filing requires 30 days. The insurer of record on the filing on the date of the accident, will be held to the amount of the filing, and, in this example, likely was not paid for the premium for the entire length of the notice period.
Buried in this note above is the answer. If the policy has lapsed for whatever reason, and coverage is pushed through the filing, most insurers only want to be held liable for the minimum amount. This also reduces the amount the trucker will be held liable for in a subrogation effort.
Motor carriers who haul household good are the only ones required to provide evidence of cargo Insurance, and the minimum is $5,000 per vehicle.
While we generally will only file the minimum required, we have had requests for the filing to be at the policy limit, and we will do that where a contract exists requiring this. Simply send us a copy of the contract for consideration.
Written By: Terri Moran
Terri’s career spans many years with roles in Leadership, Underwriting and Marketing. She was responsible for one of the largest Moving & Storage programs nationally, serviced by dedicated Moving & Storage brokers. In her spare time, in addition to enjoying her family, she is the Chair of the Board of Directors for the Surplus Lines Association of California.
