South Carolina Gov. Mark Sanford’s veto of legislation that would increase 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 auto accident has resulted in a controversy in which the trial bar is pressuring legislators to override the governor, and the Property Casualty Insurers Association of America is urging them to reject the trial bar’s efforts.
HB 4622 would also increase property damage limits from $10,000 to $25,000. Sanford opposed the legislation because it would increase automobile insurance rates, adversely affect low-income drivers and reverse the recent trend in the decline of uninsured motorists.
PCI contends HB 4622 would increase insurance premiums for many consumers, potentially increase the number of uninsured motorists on the highways and increase cash awards for attorneys to collect higher fees.
“This bill will result in many drivers being forced to buy additional insurance coverage whether they want it or not,” said Robert Herlong, vice president and regional manager for PCI. “We believe 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.”
As noted by Gov. Sanford, an unintended consequence of this legislation is that the number of uninsured drivers in the state may increase.
“This increase will hit low income people the hardest,” Herlong said. “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, put more people at risk, and increase premiums for all drivers,” said Herlong.
Both PCI and the governor noted the trial bar’s role in promoting this legislation. The increase in the minimum limits was an amendment offered on the Senate floor by the president of the South Carolina Trial Lawyers Association.
In his veto message, Sanford said “I find it particularly troubling that a senator who, in another capacity, represents one of the beneficiary groups of this rate-increasing mandate would actually be the leader in setting this policy.”
“We are asking lawmakers to see this for what it is, just another tactic by trial attorneys to spin straw into gold at the expense of consumers,” Herlong said. “The increased coverage means increased opportunity and, ultimately, increased awards and higher attorney fees. With higher rates and the specter of more uninsured motorists on the road, the Legislature would best serve South Carolina drivers by sustaining the governor’s veto.”
Source: Property Casualty Insurance Association of America
Topics Trends Legislation South Carolina
Was this article valuable?
Here are more articles you may enjoy.
US P/C Underwriting Results: Two Years in a Row Over $20 Billion in the Red 
Coverage Needed: Hundreds of Thousands in SE Now in Flood Zones With New Maps 
Microsoft Tells Texas Agencies They Were Exposed in Russian Hack 
Home Insurance at $10,000 a Year Shows California Buyers’ Pain 
