Insurers Fight Push to Increase S.C. Auto Financial Responsibility Law

The Property Casualty Insurers Association of America is urging South Carolina legislators to oppose legislation (HB 4622) that would increase insurance premiums for many consumers and put more uninsured motorists on the highways.

Currently South Carolina requires drivers to purchase a minimum amount of bodily injury and property damage liability insurance. House Bill 4622 would increase the bodily injury liability limits from $15,000 to $25,000 for one person and from $30,000 to $50,000 for all persons injured in an accident. The property damage limits would also be increased from $10,000 to $25,000.

“One of our key concerns about this legislation is that it will cause double digit price increases for thousands of consumers who are least likely to be able to afford this increase,” said Robert Herlong, vice president and regional manager for PCI. “This bill will result in many drivers being forced to buy additional insurance coverage whether they want it or not. The insurance industry believes policyholders, not the government, should determine what is an adequate level of coverage. If a motorist wants additional coverage, he or she already has the option to purchase more protection. For some motorist, HB 4622 takes away their ability to make this financial decision and requires them to pay more for their insurance.”

An unintended consequence of this legislation is that the number of uninsured drivers in the state may increase. “A government mandated increase in insurance premiums amounts to a tax increase for policyholders,” said Herlong. “This increase will hit low income people the hardest. Some drivers that have insurance today will be forced to violate the law and drive without insurance because they can’t afford the higher premiums. As the number of uninsured drivers rises, it further increases costs for responsible drivers who have to pay more for uninsured motorist coverage. So although the goal is to protect more people, the end result will be to increase uninsured motorists and put more people at risk.”

In addition, PCI is concerned because the legislation goes into affect upon the governor’s signature. This is a problem because insurers need lead time to implement a change of this type and notify consumers. “Generally with this type of legislation, careful thought is given as to how the change will be implemented and time is allotted for insurers to adequately inform consumers of the expected change,” said Herlong. “In the rush to add this provision by the trial bar, there has not been time to adequately discuss or debate this issue and no impact analysis has been done. This issue should go before the House and Senate and each legislative body should thoughtfully review this matter in order to avoid adverse issues that might arise.”

Source: Property Casualty Insurers Association of America

Topics Carriers Auto Legislation South Carolina