Dive Brief:
- Liability insurance coverage for commuter railroads will increase more than 24% in less than 30 days, leaving transit agencies scrambling to find new insurance policies and the extra funds to pay for them, Commuter Rail Coalition CEO KellyAnne Gallagher told Smart Cities Dive. The notice concerning the rail passenger liability cap was published in the Federal Register on Aug. 5.
- A limited number of insurance brokers, mainly overseas, that provide this coverage will have to write new policies for all passenger railroads by the Sept. 4 deadline, South Shore Line President and General Manager Dave Dech told Smart Cities Dive.
- If a commuter railroad or Amtrak is unable to obtain the required insurance on time, it might have to cease operating, Gallagher said in an earlier interview.
Dive Insight:
Federal law requires passenger rail operators to carry enough insurance to cover up to a certain amount in damages from a single accident. Under the 2015 Fixing America’s Surface Transportation Act, the liability cap is adjusted every five years, based on the consumer price index, against a $200 million limit that went into effect on Dec. 2, 1997.
Gallagher gave examples of the increased initial costs to different commuter lines: $790,000 for Caltrain in the San Francisco Bay Area; $600,000 for Metrolink, which serves Southern California; and $630,000 for the North County Transit District - San Diego Railroad.
“The cost of insurance for rail operators has been a longstanding strain for the industry and has become a barrier for operators looking to maintain or expand passenger operations across the U.S.,” John Durante, managing director - rail practice leader at insurance provider Marsh Risk, said in an emailed statement. “With this increase, insurance premiums may rise further, and securing competitive market pricing could become more challenging.”
Dech said he has already met with brokers in London and Bermuda. He said other brokers are in Munich and Singapore, and a few are in New York City. But largely, the insurance premiums “are tax dollars that have to be spent abroad,” Gallagher said.
Last year, a bipartisan bill was introduced in the U.S. House of Representatives that would increase the adjustment date from 30 days to 90 days. The bill is now with the Subcommittee on Railroads, Pipelines, and Hazardous Materials.
The CRC in an April 30, 2025, letter to House Committee on Transportation and Infrastructure leaders, proposed calculating the increase at year four, providing railroads a full year to meet the new requirements. The CRC also proposed allowing railroads to implement the liability increase at their usual renewal cycle, “so we're not all in the market at the same time,” Gallagher said.
The Commuter Rail Coalition also suggests establishing a federal insurance program, with transit agencies paying into a single fund. “Over time, the fund becomes self-financed,” Gallagher said.
