State mulls rise in minimum auto insurance liability
CHARLESTON, W.Va. -- About 15 percent of car owners in West Virginia carry minimum auto insurance coverage, state Insurance Commissioner Mike Riley told a legislative interim committee Tuesday.
Riley said he came up with that figure based on a survey of the four largest auto insurance carriers in the state. Minimum coverage rates by insurer ranged from 8 percent to 20 percent of all policies, he said.
He said that works out to about 177,000 vehicles.
A joint Judiciary interim committee is studying whether to enact legislation raising the current minimum coverage levels of $20,000 for bodily injury to one person, $40,000 for bodily injury to two or more persons, and $10,000 for property damage -- minimums that were last increased in 1979.
During the 2013 regular session, the Senate Banking and Insurance Committee advanced a bill to raise the minimums to $25,000 for bodily injury to one, $50,000 for bodily injury to two or more persons, and $25,000 for property damage (SB443), but it died in the Senate Judiciary Committee.
Last month, Jill Rice, president of the West Virginia Insurance Federation, warned legislators that an increase in minimum coverage levels could raise premiums to the point where significant numbers of low-income motorists would drop their coverage and drive uninsured.
Riley said Tuesday he is unaware of any studies showing a correlation between higher minimum coverage levels and a surge in uninsured drivers.
"People make decisions on affordability. There is a break-point as you raise premiums," he said. "I don't think it's going to be a dramatic change in uninsured motorists."
Drivers currently carrying minimum coverage would see premium increases ranging from about 3 percent to 11 percent, depending on their age, sex and driving record, if the mandatory minimum coverages are increased, Riley said.
Lobbyists for the West Virginia Association for Justice, the trial lawyers' association, are advocating for increasing minimum coverage.
They contend the 1979 minimums are outdated, noting that $20,000 of medical costs in 1979 would now total more than $122,000. Similarly, they note that $10,000 would cover the replacement cost for most cars in 1979, when the average cost of a new car was $6,847, but note the average cost for a new car today is more than $30,000.
Sen. Chris Walters, R-Putnam, asked if higher minimum coverage would result in lower rates for drivers who carry additional coverage to protect themselves against uninsured and underinsured drivers.
"It should be a cost savings for a majority of West Virginians," he said.
Riley said there are an average of 6,500 automobile accident claims a year in the state involving uninsured or underinsured drivers.
Reach Phil Kabler at email@example.com or 304-348-1220.