Canceling a Cargo Policy? File BMC-40 Fast

Not all motor carriers need a BMC-40. You’re exempt from BMC-40 if you never had a BMC-32 cargo insurance endorsement filed with FMCSA as BMC-40 is used only to cancel an existing BMC-32.

You’re typically exempt if you operate only within a single state and:

• You’ve never filed a BMC-32 endorsement
• You’re a private carrier hauling your own goods
• You rely solely on MCS-90 or BMC-91X for public liability coverage

If BMC-32 doesn’t apply to you, BMC-40 won’t either. If you’re unsure, check your FMCSA insurance filing history or contact your insurance provider.

FMCSA regulations require that BMC-40 be filed at least 30 days before the effective cancellation date of your BMC-32 cargo insurance endorsement. It cannot be filed after the policy has already been canceled. Your insurance company is responsible for filing this notice with the FMCSA to formally terminate your BMC-32 coverage.

Your insurer must file BMC-40 when:

• You switch cargo insurance providers and the current policy is being canceled
• You cancel your cargo insurance entirely
• You close your household goods business and no longer need BMC-32 coverage
• Your insurance company withdraws coverage for any reason

Delays in filing can result in FMCSA penalties or suspended operating authority. To avoid gaps or penalties, contact your insurer and confirm all FMCSA filings are submitted correctly.

Only your insurance company can file BMC-40. They must file through the FMCSA’s Licensing & Insurance Portal. Here’s how the process works from an insurer’s standpoint

Step 1: Prepare the Form
The insurer must complete BMC-40 with:

• The carrier’s legal name
• FMCSA docket number (MC number)
• Reference to the BMC-32 policy
• Effective date of cancellation
• Authorized signature

Step 2: File Electronically
The insurance provider must submit BMC-40 electronically through the FMCSA’s Licensing & Insurance (L&I) Portal. Paper filings are accepted only in rare cases.

Step 3: Notify the Carrier
FMCSA requires the insurer to inform you in writing about the coverage termination and effective cancellation date.

Step 4: Replace Your Coverage
You must secure a new cargo insurance policy, and your new insurer must file a BMC-32 with FMCSA before the current coverage is canceled.

There’s no official fee for BMC-40 filing but your insurer may charge a cancellation or administrative fee. Plus, premiums may rise for a new policy or if there is a lapse in coverage.

If your insurer cancels your BMC-32 cargo insurance but doesn’t file Form BMC-40, the FMCSA will still show your insurance as active even though it’s not, creating a false record of compliance.

Failing to file BMC-40 can cause serious issues, including:

• Inaccurate FMCSA records, making you appear insured when you’re not
• Confusion and delays in revoking authority
• Civil penalties for operating without valid insurance
• Out-of-service orders if coverage can’t be verified during inspections
• Legal liability in the event of a claim with no active policy
• Loss of credibility with shippers and brokers due to perceived non-compliance

If a policy is canceled and no BMC-40 is filed, and you don’t file a new BMC-32 with a replacement policy, FMCSA may consider you uninsured and revoke your authority automatically.