Increasing the Mandatory Coverage Limits: Providing Protection For All West Virginians

WHEELING, WV, April 08, 2013

Consider an all-too-real scenario. Amanda, a working mom, is t-boned by a driver who runs through a red light. The car she's driving is a total loss. Amanda's leg is broken, requiring surgery. Because of her injuries, Amanda is unable to return to her waitressing job for several weeks.

Where can Amanda get relief? She has lost her only mode of transportation, she has mounting medical bills, and she has no income to care for herself or her child. The law provides a remedy, of course. Amanda can sue the driver who caused the wreck. But the bigger question is: will he have any insurance to pay?

Like all fifty states, West Virginia requires every driver to carry liability insurance. It's a good idea; only financially responsible drivers should be using West Virginia's highway system. The problem is that the limits of insurance drivers are required to carry is too low. In fact, the last time the limits were adjusted was in 1979--a full 33 years ago. For bodily injury, the required limit is only $20,000. For property damage, the limit is only $10,000.

Will Amanda be able to replace her car for only $10,000? Probably not. The average cost of an automobile in 1979 was less than $7,000. Therefore, the $10,000 limit was enough to cover the full replacement cost. Today, however, the average cost of a new car has climbed to over $30,000. Transportation is critical for Amanda as a working mom. The existing limit is simply not enough for Amanda to obtain a suitable replacement.

There's an even bigger problem with the $20,000 bodily injury limit. Health care costs are skyrocketing. In fact, in the 33 years since the limits were last adjusted, medical costs have risen a whopping 600%! The average cost for an ER visit runs into thousands of dollars. In Amanda's case, she also had a surgery--meaning additional costs for the surgeon, the anesthesiologist, and the hospital providing the surgical facilities. Now add Amanda's lost wages. Even without taking general damages like pain, suffering, and emotional distress into consideration, there's no doubt that Amanda's claim has a value far in excess of $20,000.

There's a bill in the Legislature right now that's meant to fix this problem and provide meaningful compensation in Amanda's situation. SB 443 would increase the bodily injury limit to $50,000 and the property damage limit to $25,000. http://www.legis.state.wv.us/Bill_Status/bills_text.cfm?billdoc=sb443 ... e=RS&i=443

You may be wondering if this increase is justified. The truth is, it isn't really an increase at all. It doesn't even keep up with inflation. If the $10,000 property damage limit is adjusted for inflation, it's over $31,000. The same is true for the $20,000 bodily injury limit. Adjusted for inflation, it's over $63,000. Therefore, the bill really does nothing more than provide roughly the same level of protection today that the Legislature intended in 1979.

Opponents will object that any increase in the limits will mean higher premiums, making insurance unaffordable. But this simply isn't true. According to rate information compiled by the West Virginia Insurance Commission, it will cost drivers an average of $59.15 per year--the equivalent of 16 cents per day. Certainly, it's fair and reasonable to require drivers to pay an additional 16 cents a day so that we know they are fully insured.

Another objection is that higher premiums will mean more uninsured drivers. In other words, more drivers will simply refuse to buy insurance. It's hard to imagine that such a modest increase in premiums will cause a groundswell of uninsured drivers. And, in fact, the statistics clearly refute this argument. Maine's coverage limits are exactly the same as those in SB 443 and it has the lowest number of uninsured drivers in the country--only 4.5%. Iowa has some of the country's lowest insurance costs, but the percentage of uninsured drivers on its highways is in double digits. On the other hand, New York, which has the second highest premiums in the country, has only 5.4% of its drivers uninsured. There is simply no correlation between premium costs and the number of uninsured drivers.

Increasing the limits of insurance coverage is not only a good idea for Amanda. It's a good idea for every West Virginian. It's fair. It's reasonable. And it's inexpensive. That's why the West Virginia Association for Justice is supporting passage of SB 443. As president of WVAJ, I invite you to join with me and WVAJ in encouraging our Legislature to pass this bill so that those using our highways will be fully protected.

For more information about West Virginia insurance dispute law firm Bordas and Bordas, visit www.bordaslaw.com.