12.3 Motor Carrier / Trucking and MCS-90

Motor Carrier vs. Truckers Form

Businesses that haul property — their own or others' — need broader auto coverage than a standard BACF. The Motor Carrier Coverage Form (ISO CA 00 20) is the current ISO form; it largely replaced the older Truckers Coverage Form (CA 00 12). A motor carrier is anyone providing transportation by auto in the furtherance of a commercial enterprise.

Key trucking exposures the form must address:

• Tractors and trailers owned, hired, and borrowed.
• Trailer interchange — liability for a trailer in the insured's possession under a written interchange agreement but owned by another carrier.
• Non-trucking use (bobtail/deadhead) — a leased operator driving without a load, outside the lessee's business.

The Motor Carrier form uses the same covered-auto symbol concept but expands several symbols (for example, a symbol for all owned and hired autos used in the trucking business).

Federal Financial Responsibility

For-hire carriers operating in interstate commerce fall under the Federal Motor Carrier Safety Administration (FMCSA), which sets minimum financial-responsibility limits:

Exam trap: these are public protection floors, not the policy's stated limit. A carrier may buy a $1,000,000 CSL on the auto form yet still file an MCS-90 to satisfy the federal mandate.

The MCS-90 Endorsement

The MCS-90 (Endorsement for Motor Carrier Policies of Insurance for Public Liability) is a federally required filing, not a coverage grant. Its purpose is to guarantee that the injured public is paid up to the federal minimum even when the underlying policy would deny the claim — for example, an excluded auto, a hauled commodity the policy did not contemplate, or a coverage gap.

Mechanics to memorize:

• The endorsement makes the insurer directly liable to the public for negligence in operating the carrier's autos, up to the federal limit.
• It is a surety-like obligation: if the insurer pays a claim it would NOT have owed under the policy terms, it has a right of reimbursement from the insured (the motor carrier).
• It applies to interstate for-hire operations; conditions and exclusions of the policy do not reduce the public's recovery below the federal floor.

Scenario: A carrier hauls a load not described on its policy and causes a $600,000 injury. The auto policy excludes the trip, but the MCS-90 pays the victim up to $750,000, and the insurer then bills the carrier for the full $600,000 it advanced. The public is protected; the carrier ultimately bears the loss.

Key Distinctions

Trailer Interchange and Non-Trucking Use

Trucking adds exposures the standard auto form does not anticipate:

• Trailer Interchange coverage insures the motor carrier's legal liability for physical damage to a trailer it does not own but possesses under a written interchange agreement. It is written on Comprehensive, Specified Causes of Loss, and Collision bases, each with its own limit and deductible per trailer.
• Non-Trucking Use (Bobtail) coverage protects a leased operator (owner-operator) when driving the tractor without a load and outside the motor carrier's business — for example, driving home after delivering a load. The carrier's primary policy typically excludes this gap.

Exam trap: bobtail (driving with no trailer attached) and deadhead (driving with an empty trailer) are often confused; non-trucking use addresses use outside the lessee's business, regardless of whether a trailer is attached.

Cargo Is Not Auto Physical Damage

The property being hauled — the cargo — is not covered by the auto physical-damage section, which insures only the vehicle. A carrier needs separate Motor Truck Cargo coverage (an inland-marine form) to insure goods in transit. The auto form's care, custody, or control exclusion reinforces this split. Exam trap: a candidate who answers that the Motor Carrier form pays for a damaged load is wrong; cargo is always a separate policy.

Filings: Form F, BMC-91, and Experience

Federal and state authorities require carriers to file proof of financial responsibility:

• Form MCS-90 — the federal public-liability endorsement discussed above.
• Form F — a state-level filing that broadens coverage and guarantees state minimums for intrastate for-hire carriers.
• BMC-91 / BMC-91X — the FMCSA filing by which the insurer certifies the MCS-90 limits to the agency.

Trucking premiums are also adjusted by an experience modification (mod) factor that compares a carrier's actual losses to expected losses. A mod below 1.00 earns a credit; above 1.00 is a debit. Worked example: a manual premium of $80,000 with a mod of 0.85 yields $80,000 x 0.85 = $68,000; a mod of 1.20 would raise it to $96,000. Strong safety records (low CSA scores) drive the mod down and reward carriers directly.