Thanks to legislation passed last year, 15% of Virginians will see their auto insurance costs go up.
The new law, which became effective Jan. 1, will force many drivers to buy more coverage to meet the new required minimum liability limits.
Now, lawmakers are again considering a bill (Senate Bill 754) that could raise costs even further.
It’s time for Virginia lawmakers to put consumers first and hit the brakes on proposals that could increase auto insurance costs.
SB 754 would automatically convert current auto policies to excess underinsured motorist coverage (UIM) without the policyholder’s agreement. If a policyholder doesn’t want the change, they would have to complete a written request to opt out and most consumers will not be aware.
This is a very complex issue, and it is likely to hit the pocketbooks of Virginians hard. According to estimates by the American Property Casualty Insurance Association, SB 754 could raise the cost of UIM coverage by two-thirds per vehicle.
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SB 754 could also significantly increase the number of claims that qualify for UIM coverage and increase the costs associated with claims, causing auto insurance for Virginia consumers and businesses to rise again.
The law SB 754 is trying to change has been on the books for more than 50 years and during that time it has kept costs down.
In fact, states with definitions of underinsured and uninsured motorist similar to what SB 754 is proposing have claim costs that are 68 percent higher than states that define underinsured motorist as Virginia currently does. Virginia’s current law works and it saves consumers money.
If SB 754 passes and auto insurance costs increase, coverage could become unaffordable for some which could lead to more uninsured drivers, making Virginia’s roads less safe. Virginia is fortunate to have the 17th lowest rate of uninsured drivers in the country and we do not want to see that trend move in the wrong direction.
Virginia families and businesses are already facing cost increases for many goods and services as inflation continues to impact our nation’s economy. Now is not the time for lawmakers to implement major policy changes that could increase costs even further for hardworking Virginians. We urge Virginia lawmakers to protect consumers from higher auto insurance costs by voting no on SB 754.
Nancy Egan, vice president and state government relations counsel for the American Property Casualty Insurance Association.
Egan is vice president and state government relations counsel for the American Property Casualty Insurance Association.
