Understanding MCS-90 in Everyday Terms
Bill Allen | December 3, 2020 | Car Accidents
Most people have no clue what MCS-90 means. In fact, many have never even heard the term. Those familiar with the concept are individuals who work in the commercial trucking industry and the insurance providers who cover them.
Often, people only find out about MCS-90 after being injured in a car accident involving a commercial truck. They may find that an MCS-90 is a determining factor for whether they will receive the financial recovery they are rightfully due.
MCS-90 Endorsements Clearly Explained
MCS-90 is a form of additional insurance coverage that is required for most commercial trucking companies. Additional types of coverage, like MCS-90, are called “endorsements.”
The MCS-90 requirement applies to every type of motor carrier engaged in interstate commerce. In plain English, this means any company that transports shipments or passengers across state lines as part of their business is required to have this type of coverage.
The MCS-90 endorsement guarantees that if you have been injured in a collision involving a commercial vehicle, you will receive a certain amount of financial recovery. This money can be used to compensate for the costs of your injuries, even if your accident is not otherwise covered.
A Car Accident Thought Experiment
Imagine that you are driving down an interstate and a commercial truck has tipped over onto the road. After doing your best to avoid a collision, your car is hit by the truck and you suffer an injury as a result. This truck accident was not your fault. You were the victim.
Let’s assume your injuries are bad enough for you to spend months in the hospital. Your financial costs would skyrocket from medical expenses, vehicle repair costs, and lost wages due to missed work. You would probably suffer damages of at least $100,000, not counting the non-economic cost of your pain and suffering.
Frustrating Insurance Exclusions and Personal Injury Lawsuits
Typically, you would assume that the commercial trucking company’s insurance policy would compensate you for your financial and personal damages. After all, you were the victim. But let’s imagine that the truck tipped because the driver was swerving erratically due to road rage.
“Road rage” accidents are often excluded from the trucking company’s standard insurance coverage. This means if you are the victim of an accident because of a truck driver’s road rage, their insurance provider may claim that the accident is not their responsibility.
With an insurance provider denying your reasonable claim, you might plan to sue. Filing a personal injury lawsuit is one way that you could try to hold the driver and/or the trucking company accountable. But this option may also leave you at an impasse.
Let’s presume that the driver is not wealthy enough to personally pay for your costs and the company is barely solvent. You will then have very few options for financial recovery. This is where MCS-90 becomes relevant.
The MCS-90 Option for Securing Compensation
In order to drive a commercial vehicle and do business across state lines, companies are required to register with the Federal Motor Carrier Safety Administration (FMCSA). A part of this registration requires companies to prove that they can financially cover all damages their vehicles may do to the public.
The company needs to show that they can compensate for those losses even if their insurance policy does not provide certain kinds of coverage. Usually, companies prove this by acquiring an MCS-90 endorsement on their commercial insurance policy.
An MCS-90 endorsement entails that the insurance provider agrees to pay any claim filed by a member of the public who has been injured by one of the company’s vehicles. They are required to pay even if their policy doesn’t explicitly cover the type of damage or the circumstances in question.
It may seem strange that any insurance company would offer a policy like an MCS-90. What’s in it for them?
There are two reasons that companies offer an MCS-90 endorsement:
- The insurance company receives payment for the MCS-90. If the trucking company never needs to use it, then the insurance provider profits.
- An MCS-90 endorsement provides the insurance company with a claim against the commercial trucking company if any money is paid out because of the endorsement. Of course, this does not always work in the insurance provider’s favor. If the trucking company becomes insolvent, then the insurance company will not be reimbursed.
So, if you have been injured in a collision involving a commercial truck, understanding MCS-90 endorsements may have a significant impact on your financial recovery. This is especially true if your other options are limited.
Specific Circumstances in Which MCS-90 is Applicable
While this coverage might seem too good to be true, it is important to know that MCS-90 endorsements are only applicable in certain circumstances. As mentioned above, the commercial trucking company in question must be involved in interstate commerce.
If the company only ships in the state of Florida, for instance, MCS-90 is irrelevant. Companies that do not engage in interstate commerce typically do not carry MCS-90 endorsements on their insurance policies.
If the vehicle that caused your accident is owned by a company that engages in interstate commerce, the following circumstances must be in place for MCS-90 to apply:
- The commercial trucking company’s normal insurance coverage does not apply to your accident
- The company (or their driver) is responsible for the collision
- You are unable to secure financial recovery from other sources (such as the company’s standard insurance coverage or personal injury lawsuits)
- You do not work for the commercial trucking company in any capacity (either as an employee or independent contractor)
Federal regulations require certain liability minimums for MCS-90 endorsements, which differ depending on the cargo in the truck.
These regulations require the following minimum coverage:
- $750,000 for trucks hauling non-hazardous property
- $5,000,000 for trucks hauling certain hazardous materials
- $1,000,000 for trucks hauling hazardous waste, oil, or other hazardous materials
- $5,000,000 for smaller trucks hauling specific types of hazardous substances
If you have been injured in a commercial trucking accident, it is crucial to speak with a qualified auto accident lawyer as soon as you can. A legal advisor can help you explore all of your options and secure the maximum financial recovery possible in your case.