What is the difference between interstate and intrastate commerce?

Interstate commerce and intrastate commerce refer to two different ways of transporting cargo or people. The term interstate means that the commercial truck driver moves cargo or people across state lines. Specifically, it includes the following definitions:

  • Between a place inside of a state and a place outside of a state, including outside of the country
  • Between two destinations inside of a state going through another state or outside of the country
  • Between two places within a state as part of transportation, traffic, or trade that originates or terminates outside of the state or outside of the United States

With intrastate commerce, the driver remains within the boundaries of a single state. This is typically the state where the employer bases operations as well as where the driver has a permanent residence. Both types of operations require operating authority, which is a type of legal permission, from the Federal Motor Carrier Safety Administration (FMCSA).

You need FMCSA authority to operate interstate commerce

In addition to obtaining a number from the Department of Transportation (DOT), the FMCSA requires you to apply for an Interstate Operating Authority number if you regularly transport goods or people across state lines. The FMCSA grants several types of operating authorities, including FF, MC, or MX depending on the level of legal permission you need.

Trucking businesses or independent owner-operators may need to obtain several different operating authorities to support various business functions. Private carriers, carriers for hire that only transport commodities exempt from federal regulation, and carriers operating in a federally designated commercial zone are exempt from obtaining operating authority.

FMCSA insurance requirements for carriers involved in interstate commerce

The FMCA requires for-hire freight carriers that regularly cross state lines to carry at least $750,000 in liability insurance. This increases to $1 million dollars when transporting oil or hazardous waste or $5 million dollars for other types of hazardous materials. If you operate a private bus that allows you to transport up to 15 people across state lines, you need to carry a minimum of $1.5 million dollars in liability insurance. The requirement is $5 million dollars in liability if you transport more than 15 people.

Intrastate insurance requirements vary

The insurance requirements to operate a commercial truck in-state vary according to the laws of the state where you do the transporting. Requirements are typically dependent on the weight of the truck and type of goods you intend to deliver between your destination and end points, but you will need at least liability insurance. Keep in mind that you will need to obtain a DOT number as an intrastate carrier if you haul certain quantities of goods or any amount of hazardous materials.

Work with our team to make sure you have the right big rig insurance.

The FMCSA and the DOT both expect you to know which types of insurance you need as an interstate or intrastate carrier. Even so, figuring out which policies you must have and how much coverage to get can be challenging. We can help you with obtaining the proper types of insurance. Our staff has many years of experience working exclusively with the trucking industry and will use this experience to find you the best possible rates and insurance benefits. Get started with your truck insurance quotes by filling out our online form, giving us a call, or messaging us on LiveChat.

Source:

https://ask.fmcsa.dot.gov/app/answers/detail/a_id/249/~/what-is-the-difference-between-interstate-commerce-and-intrastate-commerce%3F

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