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Licensing and Insurance Requirements for For-Hire Motor Carriers of Passengers - Parts 365 & 387

PART 387 – Financial Responsibility Applicability

For-hire motor carriers of passengers operating vehicles in interstate or foreign commerce must have at least the minimum amount of insurance required by law.

For-Hire Carriers Schedule of Limits of Public Liability

  • VEHICLE THAT IS DESIGNED TO TRANSPORT 16 OR MORE PASSENGERS (including the driver) $5,000,000 Insurance required
  • VEHICLE THAT IS DESIGNED TO TRANSPORT 15 OR LESS PASSENGERS (including the driver) $1,500,000 Insurance required

Minimum levels of financial responsibility are determined by highest seating capacity of a vehicle within a fleet operated by an interstate for-hire motor carrier of passengers.

These insurance requirements DO NOT apply to:

  • A motor vehicle transporting only school children and school personnel to and from school;
  • A motor vehicle providing taxicab service and having a seating capacity of less than 7 passengers and not operated on a regular route or between specified points;
  • A motor vehicle carrying less than 16 people in a single daily round trip commuting to and from work;
  • A motor vehicle operated by a motor carrier under contract providing transportation of pre- primary, primary, and secondary students for extracurricular trips organized sponsored, and paid by a school district. 

Questions Carriers Need to Ask Themselves

  1. Do I offer interstate transportation to passengers for a commercial purpose?
  2. Am I compensated, either directly or indirectly, for the transportation service provided?
  3. Is the transportation generally available to the public at large?

If you answered “Yes” to all of the above questions, you are for-hire.

PART 365 – Interstate Operating Authority Rules

A for-hire passenger carrier is a person or company that provides transportation of passengers for compensation. You can be a for-hire passenger carrier regardless of whether:

  1. You are compensated directly or indirectly for the transportation service provided;
  2. The compensation is paid or not paid by the passengers; or
  3. you havea non-profit status. If you are operating a vehicle in interstate commerce as a for-hire motor carrier of passengers, you must obtain interstate operating authority unless you operate within a commercial zone.

Information about commercial zone exemptions and other types of exemptions can be found at 49 CFR Part 372. If you are transporting only school children and teachers to or from school, you are not required to obtain interstate operating authority. Form OP-1(P), Application for Motor Passenger Carrier Authority, must be completed, filed, and approved before you can transport passengers in interstate commerce. Operating authority applicants are issued an MC number by the Federal Motor Carrier Safety Administration (FMCSA).

You must:

  1. Complete and file Form OP-1(P) along with the filing fee ($300 for each type of authority you are requesting);
  2. Have your insurance company file with FMCSA appropriate insurance forms for the type of authority you are requesting; and
  3. Submit or have a process agent service submit Form BOC-3, Designation of Process Agent. Passenger carriers that are Federal Transit Administration Grant Recipients (Transit Benefit Operators) under 49 U.S.C. 5307, 5310, or 5311 are permitted to maintain liability insurance at the highest level required for any of the States in which they operate in lieu of the required Federal insurance level. These passenger carriers must complete and file Form OP-1(P), but the $300 filing fee is waived.

Passenger Carrier Operating Authority Application Vetting

When FMCSA receives an application for Motor Passenger Carrier Operating Authority, the Agency conducts an in-depth investigation of the application
to determine if the applicant is fit, willing, and able to perform the involved operations and to comply with all applicable statutory and regulatory provisions. An applicant is not granted for-hire motor passenger carrier operating authority until the entire investigative process is complete.

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