The MCS-90 form acts as a guarantee. It states that there will be a source of funds designated to pay for a loss when the insured is legally liable. It’s purpose is to the public that in the event that a motor carrier doesn’t have the required minimum, no financial consequences will be present. Inside the MCS-90 it states that it “covers all vehicles owned, operated, or maintained by the insured regardless of whether or not each motor vehicle is specifically described in the policy”. However, there is a chance the insurance company may redeem their losses by substituting the claims paid against the motor carrier.
The Federal Motor Carrier Act of 1980 is the main reason why the need for the MCS-90 form is present. Inside this act, it states that each motor carrier who participates in interstate or for hire commerce has a requirement to have proof that shows their financial responsibility is equal to or greater than the state minimum. There are three ways in which a motor carrier can present their proof:
While the MCS-90 form does not provide the insurance itself, it is a vital part of a motor carrier’s portfolio and can go a long way to help motor carriers and insurers protect themselves.