Minimum Insurance Requirements for Commercial Trucks in North Carolina

By Adam J. Langino, Esq.

Minimum Insurance Requirements for Commercial Trucks in North Carolina

Commercial trucking is vital to North Carolina’s economy and communities, but accidents involving large trucks can cause devastating injuries and losses. To protect the public, both federal law and North Carolina state law require commercial trucking companies to carry minimum liability insurance. This insurance is meant to ensure that if a truck driver causes an accident, there will be funds available to compensate injured people or grieving families. Below we explain the mandatory minimum insurance limits for different types of commercial trucks in North Carolina – including those hauling property (freight) and those carrying passengers – and why these requirements exist. We’ll also discuss the government’s recent analysis of whether today’s insurance minimums should be increased (since they were set decades ago).

Insurance Minimums for Trucks Carrying Property (Freight)

Basic Coverage – $750,000: For most commercial trucks that haul property (cargo), the law requires a minimum of $750,000 in liability insurance. This applies to for-hire trucks with a gross vehicle weight rating of 10,001 pounds or more operating in interstate commerce (crossing state lines). North Carolina law actually extends this rule to intrastate trucking as well – meaning even if a truck operates only within North Carolina, it must meet the same $750,000 minimum financial responsibility standard. This $750,000 coverage is intended for general freight carriers hauling non-hazardous goods.

Higher Coverage for Hazardous Materials: Certain trucks must carry higher insurance due to the greater danger if they crash. If a truck is carrying hazardous materials, federal regulations require more insurance, which North Carolina follows for those operating in the state. For example:

Oil or some hazardous materials: at least $1,000,000 liability coverage is required.

High-danger hazmat (e.g. explosives, poisonous gas, or large quantities of radioactive materials): at least $5,000,000 coverage is required.

These higher limits reflect the potential for a catastrophic incident. A hazmat spill or explosion can cause widespread damage, so the insurance minimum is set higher to cover cleanup costs, property damage, and injuries. An official NC DMV publication confirms that non-hazardous freight trucks must have $750,000 minimum coverage, while trucks carrying large quantities of certain hazardous substances need $1 million or $5 million in coverage, depending on the material.

Small Truck Exception ($300,000): What about small commercial vehicles? There is a lower federal minimum (adopted in NC) of $300,000 for for-hire carriers if the only trucks they operate are very light (under 10,001 lbs) and they transport no hazardous materials. However, most “commercial trucks” in the context of serious accidents (tractor-trailers, dump trucks, etc.) exceed that weight, so the $750,000 rule is the key benchmark in practice.

Purpose of the $750,000 Rule: At first glance, $750,000 might sound like a lot of coverage. But consider that in a major highway accident with a fully loaded semi-truck, the damages can be enormous – medical bills, lost income, vehicle damage, etc. This minimum was set by federal law in the 1980s to ensure victims wouldn’t be left empty-handed. In fact, Congress established the $750,000 requirement in the Motor Carrier Act of 1980 as part of trucking deregulation. Lawmakers were concerned that after deregulation there’d be many new trucking companies, and they wanted a financial safety net so that “public safety is not jeopardized” by undercapitalized carriers. Requiring substantial insurance was meant to “create additional incentives to carriers to maintain and operate their trucks in a safe manner as well as to assure that carriers maintain an appropriate level of financial responsibility.” In short, insurance makes sure a trucking company can pay for the harm if one of its trucks causes a tragedy.

Insurance Minimums for Passenger-Carrying Vehicles (Buses & Vans)

Commercial vehicles that transport passengers (for example, tour buses, charter buses, airport shuttles, or large vans) have their own insurance requirements, which are higher due to the number of people at risk in a single accident. In North Carolina, as in all states, these requirements follow federal law (the Bus Regulatory Reform Act of 1982) and depend on the vehicle’s seating capacity:

Vehicles seating 16 or more passengers (including the driver): Minimum $5,000,000 liability insurance. This category covers full-size buses, motorcoaches, and larger passenger vans.

Vehicles seating 15 or fewer passengers: Minimum $1,500,000 liability insurance. This would include smaller commercial vans, shuttles, or mini-buses.

These figures apply to for-hire carriers of passengers in interstate service. North Carolina also requires intrastate for-hire passenger carriers to meet the same minimums. For instance, a tour bus company operating only within NC must still have at least $5 million in coverage if the bus holds over 15 people. The NC DMV confirms these limits: $5 million for large buses and $1.5 million for small buses/vans.

Rationale: The reasoning for higher passenger carrier insurance is clear – if a bus crash occurs, there may be many victims with injuries or death. The insurance needs to be sufficient to compensate all of them. In the early 1980s, Congress raised the required coverage for buses to the $5M/$1.5M levels precisely because of some deadly bus accidents. They wanted to “ensure that adequate sources of compensation are available to those who may be injured while traveling by bus.” Moreover, lawmakers felt that having a single national standard (instead of different state rules) for bus insurance was important for fairness and simplicity in interstate travel. So today, any bus company – whether it’s a cross-country motorcoach or a local church charter bus – must carry these high insurance limits if they carry paying passengers.

Exceptions: Certain passenger transporters are exempt from these federal insurance rules, such as school buses or small van services that aren’t operating as for-hire carriers in interstate commerce. For example, a vehicle carrying only school children under a school district contract can be exempt. But generally, if you see a commercial bus or shuttle on North Carolina’s roads, it is required to have proof of multi-million dollar liability coverage before it can operate.

Why Are These Insurance Requirements Set at These Levels?

The dollar amounts for minimum insurance were originally set by federal law over 35 years ago. At the time (1980s), regulators balanced two goals: protecting the public and not crushing the trucking industry. Here are the key reasons behind the current requirements:

Protection of the Public: Big trucks can cause big damage. Congress and state lawmakers want to make sure that if you or your family are hit by a commercial truck, there is a guaranteed pool of money available (from the insurance) to cover medical bills, lost wages, rehabilitation, vehicle replacement, and even pain and suffering or wrongful death damages. In technical terms, it’s about ensuring the carrier has “financial responsibility…sufficient to satisfy claims covering public liability”. Without mandatory insurance, a trucking company that caused a catastrophic crash might go bankrupt, leaving victims with no recourse. The $750,000 (cargo trucks) and $1.5–5 million (passenger) minimums were considered high enough to cover most serious accidents in the 1980s.

Safety Incentives: Requiring substantial insurance was also seen as a way to encourage safer operations. The logic is that insurance companies will scrutinize trucking firms before insuring them and charge higher premiums to those with poor safety records. Also, knowing that an accident could raise their premiums or jeopardize coverage, trucking companies have a financial motive to maintain their fleet well, train drivers, and avoid crashes. In the legislative history of these laws, it was noted that having insurance involved “private sector” oversight – essentially, insurers would help regulators keep tabs on carriers’ fitness to operate safely. If an operator couldn’t get insurance, that was a red flag they shouldn’t be on the road. Thus, the law ties financial fitness to safety fitness.

Deregulation and Industry Entry: The 1980s brought deregulation to trucking and busing. Many new, smaller carriers entered the field. Lawmakers were concerned that some new entrants might cut corners on safety to compete on price. By making insurance (and its cost) mandatory, Congress aimed to prevent a “race to the bottom” on safety. A House committee report from 1980 explicitly said higher insurance would inhibit “truckers who might have little concern for safe operation…thereby posing a threat to those who share the highways”. In other words, it helps weed out fly-by-night operators. The insurance requirement was also intended to level the playing field so that safe companies aren’t undercut by unsafe ones that save money by carrying low insurance or none at all.

Adequacy for Typical Crashes: Back in 1980, $750,000 was chosen because it was thought to cover virtually all “typical” truck accidents (and similarly $5 million for worst-case scenarios like a bus full of passengers). At the time, these amounts were very high – remember, this was 1980 dollars. In fact, Congress expected these figures would cover “all but the most extreme cases” so that only in very rare, catastrophic crashes would damages exceed the insurance. Essentially, the government drew a line estimating what a severe but not unheard-of crash might cost in injuries and damage, and set the insurance minimum to that level.

State Adoption – NC’s Perspective: North Carolina reflects these federal standards in its own regulations. The NC Utilities Commission and NCDMV require intrastate carriers to carry the same minimums as interstate ones for simplicity and public protection. This avoids a situation where, say, a moving truck that only works in NC could get away with less insurance than one going from NC to Virginia. It’s uniform and ensures North Carolinians have the same financial protection whether a truck that hits them is local or from out-of-state.

Should the Minimum Insurance Limits Be Higher Today?

One important issue is that these insurance minimums haven’t changed since the early/mid-1980s. $750,000 in 1980 is not $750,000 today. Inflation in medical costs, for example, has been substantial. The U.S. Department of Transportation’s 2022 report to Congress examined whether the current requirements are still adequate or should be raised. Here are some findings from that analysis and other studies:

Increased Crash Costs: The cost of injuries and fatalities has risen dramatically over the last 40 years. Medical expenses, in particular, far outpace general inflation. One study noted that if the $750,000 trucking liability limit set in 1985 were adjusted for inflation, it would be equivalent to about $1.7 million in today’s dollars (or over $3 million if adjusted for medical cost inflation). In short, $750,000 doesn’t go as far as it used to in covering hospital bills and other losses.

Catastrophic Crashes – Rare but Costly: Thankfully, crashes where a single truck causes damage exceeding $750,000 are uncommon (well under 1% of truck accidents). However, when they do occur, the shortfall can be huge. The DOT report notes that “the costs of severe and critical injury crashes can easily exceed $1 million”, meaning the current minimum might not fully cover those worst-case events. For example, consider a multi-fatality crash or one that causes lifelong disabling injuries – the claims for medical care, long-term care, lost earnings, and pain and suffering can run into several million dollars.

Victims Left Uncompensated: Evidence suggests that in some tragic crashes, victims’ families do not receive full compensation because the insurance limit is too low. A 2013 study by the Trucking Alliance collected data from major freight companies and found over 40% of settlements exceeded the $750,000 insurance policy for the at-fault truck – meaning the trucking company itself would have had to cover the rest (and may not have had the assets to do so). Similarly, a 2013 report by the Pacific Institute for Research and Evaluation recommended increasing the required coverage to at least $10 million to properly cover the most serious crashes, noting that the top 10% of severe truck crash settlements were around $9–10 million in 2012 dollars. These studies argue that many families, especially in fatal crashes, are not fully financially compensated under the current limits.

Most Trucks Carry More Insurance Anyway: On the other hand, many trucking companies voluntarily carry insurance above the minimum. It’s reported that the vast majority of trucks on the road actually have $1,000,000 or more in coverage already. Only a small percentage of carriers stick to the bare minimum $750,000 policy. Typically, larger carriers and those with fleets will have higher limits (and often umbrella policies on top of that). Smaller operators often get $1 million because that has become something of an industry standard – shippers and brokers often prefer it. This means the practical impact of raising the federal minimum to $1M might not be very large for many carriers, though it could affect some small operators.

Regulatory Review in 2014 and 2022: The Federal Motor Carrier Safety Administration (FMCSA) did look into raising the minimums. In 2014, they published an advanced notice of proposed rulemaking to gather input. Families of crash victims and safety advocates pushed for higher limits, citing the kinds of cases discussed above. The insurance and trucking industry raised concerns about higher costs for small businesses. Ultimately, FMCSA withdrawn the proposal in 2017, citing insufficient data to support a specific increase. More recently, in a May 2022 report, the DOT acknowledged that “medical and other costs of catastrophic crashes have increased significantly” since the 1980s and that in some severe crashes, the losses “significantly exceed” the insurance minimums. However, the agency stopped short of outright recommending a new higher minimum, largely because of data limitations. They noted that many large crash settlements are sealed by nondisclosure agreements, and insurance companies closely guard payout data as proprietary. This lack of transparent data makes it hard to definitively calculate how often $750k falls short and by how much.

Congressional Interest: Congress has shown interest in this issue. In fact, the reason DOT issued the 2022 report is that a law (MAP-21, 2012) required a review every 4 years on the “appropriateness” of the minimum insurance levels. While no change has been made yet, this periodic review mandate indicates federal recognition that the topic merits ongoing scrutiny. Some members of Congress have proposed legislation to raise the minimum (for example, to $2 million) – citing inflation and the need to better support crash victims – but as of now, the law remains at $750,000/$1M/$5M for freight and $1.5M/$5M for passengers.

Impact on Insurance Costs and Businesses: If minimums were increased, insurance premiums would certainly rise for some trucking companies – particularly smaller ones currently at $750k. The DOT’s studies have weighed this trade-off. It’s a policy judgment how to balance potential improvements in victim compensation and safety incentives against higher operating costs for some carriers (which could drive up freight costs or put pressure on small operators). The 2022 DOT report had to consider factors Congress specified, like the impact on the motor carrier industry and insurance market capacity, not just the needs of crash victims. One reason FMCSA has been cautious is concern that significantly raising insurance requirements could burden small trucking businesses and possibly drive some off the road – though safety advocates counter that the current minimum is so low that it fails families when they need help most.

Bottom Line: The government’s own analysis admits that $750,000 is often insufficient for the worst accidents, given today’s medical costs. But because catastrophic accidents are infrequent and many trucks already carry $1M coverage, there’s been debate on how high to raise the minimum and what the overall impacts would be. As of now, no change has been implemented – but this could evolve in coming years. If you’re a victim in a major truck crash in North Carolina, it’s possible the at-fault carrier’s minimum insurance won’t cover all your losses, especially if multiple people are hurt. In those cases, recovering full compensation may involve pursuing the trucking company’s assets or other avenues – which is why this topic is so important in the legal community.

What Victims Should Do After a Truck Accident

If you or a loved one has been injured in a commercial truck accident, taking the right steps immediately afterward can make a significant difference in your recovery and your ability to pursue compensation. Here’s what you should do:

Seek Medical Attention Immediately Your health and safety come first. Even if you feel fine, get evaluated by a medical professional. Some injuries—especially internal trauma or brain injuries—may not be immediately apparent. Prompt medical care also creates a record of your injuries, which is important for any legal claim.

Preserve Evidence If possible, take photos of the accident scene, vehicle damage, road conditions, and any visible injuries. Get contact information from witnesses and note any surveillance cameras nearby. This evidence can be crucial in proving fault and damages later.

Avoid Speaking with the Trucking Company or Their Insurer Trucking companies and their insurers often act quickly to protect their interests. They may contact you for a statement or offer a quick settlement. Do not speak with them or sign anything before consulting a lawyer. These early offers may be far less than what you’re entitled to.

Contact an Experienced Truck Accident Attorney Truck accident cases are complex. They often involve multiple parties (driver, trucking company, insurer, etc.) and require investigation into federal and state regulations. An attorney who understands commercial trucking laws can help you preserve evidence, identify liable parties, and pursue full compensation for medical bills, lost wages, pain and suffering, and more.

Understand Your Legal Rights Victims of truck crashes may be entitled to compensation for both economic and non-economic damages. This includes medical expenses, future care needs, lost income, emotional distress, and loss of enjoyment of life. A skilled attorney can help you understand what your case may be worth and guide you through the legal process.

About Adam Langino – A Lawyer for the Seriously Injured

I’m Adam Langino, a trial lawyer based in North Carolina. I represent people who have suffered serious injuries or lost loved ones due to the negligence of others—including victims of commercial truck collisions. My approach to the practice of law is simple: I believe in preparation, honesty, and advocacy.

I started my career as an assistant public defender, trying cases in front of juries and learning how to build strong, fact-driven arguments. Today, I use those same skills to help injured individuals and families. I don’t take shortcuts. I prepare every case as if it’s going to trial, because that’s how you get the best results—whether through settlement or verdict.

I believe that a good lawyer must be more than just knowledgeable. They must be trustworthy, responsive, and willing to stand up to powerful opponents. In truck accident cases, that often means going up against large trucking companies and their insurers. These cases are complex. They require an understanding of federal regulations, insurance law, and the trucking industry itself. I’ve handled these cases before, and I know how to uncover the evidence that proves fault.

My firm has recovered millions of dollars for clients in serious injury and wrongful death cases. But more important than the numbers is the impact: helping families rebuild, holding negligent companies accountable, and making our roads safer.

If you’ve been hurt in a truck crash, I’m here to help. I’ll listen to your story, explain your options, and fight for the accountability you deserve.

You contact me by clicking here.

1. Official NCDMV: Commercial Trucking (NC Division of Motor Vehicles brochure, updated Dec. 7, 2022) – Summary of NC’s adoption of federal insurance requirements for commercial carriers, including $750k/$1M/$5M limits for property-carrying trucks and $1.5M/$5M for passenger carriers.

2. Brochure – Licensing and Insurance Requirements for For-Hire Motor Carriers of Passengers (Federal Motor Carrier Safety Administration, July 2020) – Details of federal insurance minimums for passenger carriers and exceptions.

3. Financial Responsibility Requirements for Commercial Motor Vehicles (Volpe Center Study), January 2013 – USDOT-sponsored study examining the adequacy of minimum insurance levels, inflation impacts, and crash cost data.

4. Examining the Appropriateness of the Current Financial Responsibility Requirements for Motor Carriers – Report to Congress (FMCSA, May 2022) – Latest government analysis of trucking insurance minimums, including history, crash cost trends, and considerations on raising the limits.