Neb. Committee Kills Bill on Reporting Auto Insurance Cancellations

A Nebraska legislative committee killed a bill Feb. 13 that would have required insurers to report all auto insurance cancellations to the state.

National Association of Independent Insurers (NAII) Counsel Ann Weber submitted testimony to the Banking, Commerce and Insurance Committee saying Legislative Bill 888 would not accomplish its intended purpose of reducing uninsured motorists. The committee then voted to “indefinitely postpone” the bill, which means it virtually is dead.

“Canceled policies do not equal uninsured motorists,” Weber said. “Fifteen to 20 percent of law-abiding citizens who are smart shoppers for insurance will be penalized by LB 888 when they find a new insurer that better suits their needs and cancel their old policy to buy a new one somewhere else. Those drivers are not uninsured – they have simply changed carriers.”

In addition, there is a 15-20 percent difference between the registered owner of a vehicle and the person taking out insurance on it, she noted.

“This legislation could result in hundreds of thousands of citations for being uninsured when the drivers, in fact, do have auto insurance,” Weber said. “Also, ‘deadbeats’ who never purchase insurance will not be reported because they have no policy to cancel.”

Weber said the legislation was problematic, would cause unnecessary expenses, and would not achieve the desired result.

For similar reasons, NAII has opposed a related bill, HB 488, which was carried over from the 2001 session and is now on the floor of the unicameral legislature. LB 488 requires insurers to report automobile insurance data to the state Department of Motor Vehicles, which also might be used in the future to identify uninsured motorists. Weber said LB 488 has been amended to make it much less troublesome and apparently will be amended further.

NAII will await the final version of the bill to determine its current position on it.

Topics Auto