Kansas Governor Signs 2 Auto-Insurance-Related Bills

Last Week, Governor Sam Brownback of Kansas signed two pieces of legislation into law.

The first law is referred to as “no pay, no play,” and is meant to limit the recovery rights of uninsured motorists. Basically, this means that uninsured drivers will not be able to seek compensation for pain and suffering after traffic accidents, though they may still sue for actual hospital expenses or damaged property.

This law only applies to those uninsured drivers who have been without auto insurance coverage for at least forty-five days, and did not have continuous coverage during the year immediately preceding the forty-five day period.

Another law makes bans cities in Kansas from imposing “crash taxes,” or fees for emergency responses to accidents, on drivers or their auto insurance companies.

Oklahoma Impound Law Advances

Oklahoma is one step closer to having a law that would allow police officers to impound uninsured vehicles.

House Bill 2331, co -authored by state Senator Gary Stanislawski and state Representative Steve Martin passed the House of Representatives (93-3) and the Senate (41-4) and now goes to the governor for signature or veto. A veto is unlikely, however.

Once passed, the bill will allow law enforcement officers making traffic stops to seize vehicles found to be uninsured, and have them towed to an impound lot until the owner is able to legally redeem them.

Martin said that the bill would take advantage of Oklahoma’s recently launched instant verification system, which law enforcement officers can use to determine – in mere seconds – if a stopped driver is covered by qualifying liability insurance.

Martin told the press, “Law enforcement officers can now enter a license tag number into a data base and know immediately if a car is insured.”

The instant verification system, which was ordered by an act of the Oklahoma legislature four years ago, was created through cooperation between the State of Oklahoma and the insurance industry. It’s been available to police and highway patrol for several months, but up until now, law enforcement had no power to seize uninsured vehicles.

Instead, uninsured drivers who caused accidents would drive away from from the scene, while innocent victims had their disabled vehicles towed away by wreckers.

New York has Least Knowledgeable Drivers, Survey Says

It may not come as much of a surprise, but the country’s least knowledgeable drivers hail from New York, New Jersey, Hawaii, and California. Conversely, the most knowledgeable motorists are in Idaho, Wisconsin, Montana and Kansas – well, at least according to the results of the 2009 GMAC Insurance National Drivers Test, which also found that 20.1 percent of American drivers (about 41 million) would not pass a written drivers exam if they had to take it today.

When asked about driving habits, 30 percent of the motorists GMAC Insurance surveyed said that financial strains have made them want to drive less, and find new ways to save money, as well, but what’s more disturbing is that in this, the fifth annual such survey the insurer has conducted, the number of drivers with real understanding of basic road rules is declining, with this year’s scores 1.5 percent lower than last year’s.

Drivers in Idaho and Wisconsin tied for the best scores in the country, with average results of 80.6 percent, with those in New York ranking last, with an average score of 70.5 percent. The first and last place results are repeats of prior year’s surveys. In general, however, last year’s trends remained the same, with the lowest average scores in the Northeast, and the highest in the Midwest.

Interestingly, while men are still more likely to pass the test than women, the gap between the sexes is smaller in the 2009 results (81% of males, 79 % of females) than it was in 2008 (87% and 80% respectively.)

The greatest number of wrong answers related to yellow lights and safe following distances, but almost everyone correctly identified the purpose of a solid line.

Additional key findings from the 2009 GMAC Insurance National Drivers Test include:

  • Older drivers generally score better than younger drivers.
  • While the Northeast had the lowest average scores, the South had the highest failure rate (41%). The Midwest had the highest average test scores and the lowest failure rates (15%).

Source: Insurance Journal.

Fiesta Auto Insurance Announces New Offices, Expansion Plans

It may be a bit late in the season to be thinking about it, but Huntington Beach, Calif.-based Fiesta Auto Insurance, an insurance franchise that also offers tax preparation services, has announced the opening of twenty new offices during the first quarter of 2010 – refreshing news in an economy where business are still cutting back and laying off. This growth increases the company’s presence to over sixty open locations nationwide.

According to a report in The Insurance Journal, the new offices are located in:

* Harbor City, Calif.;
* Fresno, Calif.;
* Watsonville, Calif.;
* Corpus Christi, Texas;
* Dallas;
* Houston;
* Katy, Texas;
* San Antonio, Texas;
* Ft. Worth, Texas;
* Pembroke Pines, Fla.;
* Pompano Beach, Fla.;
* Palm Springs, Fla.;
* Miami;
* Taylor, Mich.;
* New York;
* Bridgehampton, N.Y.;
* Ozone Park, N.Y.;
* Newark, N.J.;
* Chicago; and
* Malden, Mass.

Fiesta Auto Insurance has further announced that it plans to have more than 150 open locations by the end of this year, and 1,500 by the end of 2015.

John Rost, founder and president of Fiesta made a statement to the press, saying, “We are thrilled with the success that Fiesta Auto Insurance has experienced during the past three months. As a hybrid concept that pairs two extremely successful industries in one business model, we have really opened the doors for investors to reach out to the underserved Hispanic demographic and blue-collar communities. We look forward to continuing to find the right franchise partners to represent in local communities across the country.”

Connecticut fines GEICO $177,500

The Insurance Journal reported Friday that four GEICO subsidiaries have been fined by the Connecticut Insurance Department for improper rating, claim delays and the use of unlicensed adjusters, among other violations.

The total fine – $177,500 – is the result of smaller fines assessed to the four subsidiaries, and follows a market conduct exam of GEICO operations in the state of Connecticut.

State Insurance Commissioner Thomas Sullivan told the press, “”We will continue to scrutinize companies in this industry to ensure they are committed to conducting business within the boundaries of our insurance laws.”

Connecticut law requires that all insurance agents be licensed by state, and that insurance companies must formally appoint any such agents who “sell, solicit, or negotiate insurance products on their behalf.” The market conduct exam revealed that each of the subsidiaries was employing unlicensed adjusters. Other violations included a failure to report “loss of use” distributions when making settlements.

It is unknown if these fines will cause GEICO to increase auto insurance rates in Connecticut.

Kentucky Legislature Seeks to Ban Texting While Driving

Last week, the Kentucky state Senate passed a bill that would ban drivers in the Bluegrass State from sending text messages while driving. Specifically, the measure would prohibit drivers in Kentucky from writing, sending, or reading text messages when their vehicle is moving.

According to The Insurance Journal, the bill is written to become enforceable in stages. For the rest of this year, violators will merely receive a warning, but beginning in 2011, first time offenders would pay a fine of $25 plus court costs, while repeat offenses would earn people a $50 fine plus court costs.

The bill’s lead sponsor, Denise Harper Angel (D – Louisville) said the proposal would save lives by deterring reckless driving, while opponents of the measure questioned how it would be enforced by police officers.

The bill cleared the Senate with a 27-6 vote and has been sent to the House for their review and approval.

Utah Senator Proposes 3 Changes to Auto Insurance Law

The Insurance Journal is reporting that State Senator Stephen Urquhart of Utah is trying to change the law on automobile insurance coverage in his state by proposing three bills with address un- and under-insured motorist coverage, liability insurance, and arbitration for accident claims.

Senate Bill 62 would require a written response to a covered driver’s compensation demand “within a reasonable amount of time” from all insurers providing uninsured and underinsured motorist coverage. In addition, the companies should pay drivers’ or insurers’ demands “immediately.” If a carrier does not pay the full amount of the driver’s demand for compensation, the driver would then be eligible to litigate or arbitrate the remaining claim.

The Senate passed this bill and it was sent to the House.

Senate Bill 70 modifies Utah’s current Uniform Driver License Act by altering provisions relating to the liability limits imposed for damages caused by a minor operating a motor vehicle. Under the new bill, both the owner of a vehicle, and the minor who was allowed to drive it, can be held jointly and severally liable for any damages caused by the negligence of the minor, when an accident occurs.

In addition to this change, Urquhart is also proposing that the owners’ liability be limited to the amount of their liability insurance if a crash involves the injury or death of one person, and to $100,000 if more than one person is injured or killed. Currently, according to the Senator, the potential liability is unlimited.

This bill passed in the Senate and is waiting for the governor’s signature.

Senate Bill 105, which is also waiting for the governor’s signature, modifies the state Insurance Code by amending provisions relating to the use of arbitration for certain motor vehicle accident claims, and increasing the arbitration award limit an injured person can get from an insurance company from the current $25,000 to $50,000.