When your insurer cancels your liability policy, it files a cancellation notice with FMCSA. If no replacement coverage is filed before the effective date, FMCSA revokes your operating authority. Here's how to handle the time you have.
Find your effective date
Check the notice from your insurer or FMCSA, and look up your insurance history on L&I. The key date is when the cancellation takes effect. Your authority stays active until then.
Your options
- Fix the cause. If the cancellation is for non-payment, pay the premium and ask the insurer to reinstate the policy and withdraw the cancellation.
- Replace the coverage. Get a new policy and have the new insurer file it with FMCSA before the effective date.
- Sell the company first. If you were planning to get out anyway, a buyer can purchase the company while the authority is still active. Your coverage must stay in force until closing, when the buyer's insurance is filed.
- Close the company. You can let the authority go or voluntarily revoke it, but you walk away with nothing. See Selling vs. closing.
If you want to sell
- Move fast. Tell the buyer your effective date on day one. A cash buyer can often close in about a week; a broker listing usually can't.
- Keep the policy in force until closing. If needed, pay the premium to delay or reverse the cancellation. A sale price is usually worth far more than a month of premium.
- Don't run loads with no coverage. Never operate after coverage ends.
If your authority was already revoked
A revoked authority can't be sold while it's inactive. You can usually reinstate it by getting insurance back on file and paying FMCSA's reinstatement fee. Whether that's worth doing depends on the authority's age and history. Send us your USDOT number and we'll tell you.
Act early
The closer you are to the effective date, the fewer options you have. If you have a notice in hand, get your estimate now and mention your effective date in the form.
This guide is general information, not legal, tax or financial advice. Rules and forms change; check FMCSA and talk to a professional about your situation.