High Profile Bus Crash Calls Attention to Low Federal Minimum Insurance Limits

A fatal bus crash in Palm Springs, California is drawing national attention to a decades-old insurance requirement for buses and commercial vehicles that often isn’t enough to cover the scope of injuries and losses common in these wrecks. In the California crash, which occurred in late October, a tour bus transporting passengers from a casino collided with a tractor-trailer. Thirteen victims were killed in the wreck, and numerous others were injured.

As it’s becoming known, victims and their survivors will likely face a difficult journey in their fight for justice and compensation largely due to a 30-year-old federal law that requires bus companies to carry a minimum of $5 million in insurance coverage. The bus company involved in the crash operated only one bus and was owned by the driver. It carried the minimum $5 million insurance policy. Ultimately, over 30 individuals and families who experienced profound losses and serious harm will be left to rebuild their lives on a share of that $5 million.

The California crash, as well as other large-scale transportation crashes, is drawing attention to long-standing concerns about the dangers of Federal insurance requirements for buses and commercial trucks. The Federal government established these minimum insurance requirements in the early 1980s: $5 million for buses, and $750,000 for trucks.

While the costs of being injured have increased dramatically over the years – especially in regard to medical care – the minimum insurance limit for buses has remained unchanged. Today, that $5 million is equal to roughly $21 million, when adjusted for inflation and rising medical costs, according to a 2014 report issued by the Federal Motor Carrier Safety Administration (FMCSA).

Although many agree the minimum insurance limits don’t make mathematical or moral sense, opponents, typically led by powerful insurance corporations, have been successful in stunting legislation to increase the threshold. Their arguments state that most claims fall below the insurance minimum and that it should be up to companies to make the decision about how much insurance coverage they wish to purchase. They also argue that costs of higher insurance policies could put small and independent operators out of business.

Those who stand behind the increase understand that while claims commonly fall below the $5 million threshold, determining risk is less about what typically happens, and more importantly about preparing for the worst possibility. The consensus is that low and outdated minimum limits are blatantly not enough to protect the public.

As is commonly the case, it often takes tragedy to produce change. With new attention and renewed support for the cause, perhaps the minimum limits can be increased. This is despite the efforts of lobbyists and lawmakers who have created roadblocks by passing legislation requiring the FMCSA to submit a report on the adequacy of minimum insurance limits, and its impact on the industry and marketplace, before the requirements can be changed.

As Georgia’s premiere truck accident firm, our team at Terry D. Jackson, P.C. knows how greatly victims and families depend on full compensation after suffering harm in commercial vehicle accidents, including bus accidents. We pursue the maximum compensation possible in every case we handle because the public and the people we represent are our priority. The same should be true of our federal government and transportation industry.