Row 10: Operating a passenger vehicle without required minimum insurance (49 CFR 387.31(a))
Row 10 applies to passenger carriers. It fails a new entrant that operates a motor vehicle transporting passengers without the required minimum levels of financial responsibility in effect.
What the rule says
Under 49 CFR 387.31 (a), no motor carrier may operate a motor vehicle transporting passengers until it has obtained, and has in effect, the minimum levels of financial responsibility set out for passenger carriers. The audit row is "operating a passenger carrying vehicle without having in effect the required minimum levels of financial responsibility" (49 CFR 385.321).
The minimum levels
The current schedule for for-hire passenger carriers in interstate or foreign commerce is in 49 CFR 387.33T: $5,000,000 for any vehicle with a seating capacity of 16 passengers or more including the driver, and $1,500,000 for any vehicle with a seating capacity of 15 passengers or less including the driver. (The eCFR shows section 387.33 as suspended since January 2017 and 387.33T as the section in force; the figures are the same.) Transit service providers operating under certain federal grants have a separate rule.
Seating capacity, not how many passengers you usually carry, sets the limit. A 15-passenger van and a 16-passenger shuttle fall on different sides of the line.
Proof and continuity
- Proof is kept at your principal place of business: the MCS-90B endorsement or an MCS-82B surety bond (49 CFR 387.31).
- Coverage must remain in effect continuously; cancellation requires 35 days' written notice.
- The proof is public information and must be produced on reasonable request.
- Carriers domiciled in Canada or Mexico must carry a legible English copy in each passenger vehicle.
Why passenger carriers have less time
If a passenger carrier fails the audit for this or any other reason, the corrective-action period is 45 days rather than 60, for carriers using vehicles designed or used to transport 9 to 15 passengers for direct compensation or more than 15 passengers (49 CFR 385.319). Revocation and the out-of-service order then take effect on day 46 (49 CFR 385.325).
What an auditor will compare
The policy declarations and MCS-90B dates and limits against your vehicle list (seating capacities), your first operating date, and trip records. A policy written for the smaller vehicle class while a larger vehicle is in service is a common gap.
How to fix it
- List every vehicle with its seating capacity including the driver.
- Confirm the policy limit covers the largest vehicle you operate.
- Keep the MCS-90B in your office file, and renew well ahead of expiry.
- Don't add a larger vehicle to service until the policy covers it.
If an auditor finds this violation, the audit fails. FMCSA then has up to 45 days to send written notice, and you get 60 days from the notice date to fix the problem and prove it (45 days for certain passenger and hazmat carriers) before your new entrant registration is revoked (49 CFR 385.319, 49 CFR 385.325). The overview explains the timeline.