For insurance professionals who deal with small truck risks or even artisan contractors, it's time you learned about the Federal Motor Carrier Safety Administration (FMCSA) and how new rules may begin to apply to your customers.
As of June of this year, the FMCSA announced it will broadened its scope of vehicles that will require registration and be placed under FMCSA oversight. This was accomplished by setting the GVW threshold at 10,001 pounds. The new regulations for obtaining a USDOT number now apply to more businesses than ever.
- If the vehicle has a GVW of 10,001 pounds or more, or:
- Is built or used to transport more than eight passengers (includes the driver) for a fee, or:
- Is built or used to transport more than 15 passengers and you don't charge a fee
AND if the vehicle crosses state lines.
Also, according to FMCSA, it is the vehicle owner's responsibility to know and comply with these regulations regarding your vehicle.
Who is Affected by the Change?
For most trucking businesses, the rule change will have no effect since these businesses typically use vehicles with GVWs much greater than 10,000 pounds. The affected segment of commercial businesses will be artisan contractors who drive light trucks such as the F350, which has a GVW of just a little over 10,000 lbs. In fact, many may say that this change was specifically targeted at these types of businesses to increase revenue.
Your drywall contractor who uses a 1-ton pickup, van, or light box truck and crosses a state line is now under the FMCSA jurisdiction, and you need to be prepared to have an informed discussion about their need to comply. If the businesses choose not to comply with FMCSA regulations, there are some stiff penalties that will apply depending on the specific violations involved.
Example: Your insured landscape and lawn business uses an F350 with a trailer, and operates in North Jacksonville, FL., and has picked up a new account in South Georgia. Once they begin operating in Georgia, even for only one account, they are required to register their business and vehicle with the FMCSA.
What are The Affects on the Business?
As in the example given above, this lawn business now has some hoops to jump through because they use a vehicle with a GVW of more than 10,001 pounds, and they are doing business across state lines:
- They must apply for and obtain a DOT identification number and sticker from the FMCSA.
- They must display the DOT sticker on the side of the vehicle during operations.
- They must pay the required fee to the FMCSA for registration.
- They must know and operate under the rules and regulations of the FMSCA.
- Drivers must be at least 21 years old and carry proof of having a DOT medical exam.
- If a driver travels over 100 miles from the starting location, they must keep a log of their driving time.
- The driver is now subject to the same driving restrictions that a semi driver is subject to.
Your Next Step
Assuming that you hold your agency and yourself out as a trusted adviser to your clients, your next step should be to visit the Federal Motor Carrier Safety Administration's website and become intimately familiar with the rules and regulations that might affect your contractors. You should reach out to those contractors and help them become compliant with the new FMCSA rules before they are stopped and fined for compliance issues.
For more information on commercial auto insurance and the upcoming changes to the FMCSA rules and regulations, contact Skyline Risk Management at (718) 267-6600 and speak with an insurance professional.