The National Association of Independent Insurers fears that a bill dealing with uninsured motorist coverage, passed by the Vermont Senate, could drive auto insurance prices higher in an already hard market.
“Because this bill seeks to expand availability and recovery under one’s own underinsured motorist coverage, passage could cause serious pricing problems in a troubled insurance market,” stated NAII senior counsel Gerald L. Zimmerman.
S.B. 119 has been referred to the House Transportation Committee. It provides that “a motor vehicle is ‘underinsured’ if the at-fault party’s liability for personal injury is unavailable or reduced to any injured party due to claims made by other parties injured in an accident,” said the NAII.
Despite being amended in the Senate, the “wording is still unclear and, as currently drafted, would make more underinsured motorist coverage available” the NAII said; “adding cost to an already costly system,” Zimmerman added. “The bill would also require insurers to disclose policy limits to anyone ‘claiming the right’ to recover, which could lead to serious abuses within the legal system.”
He indicated that “A better option for policyholders wanting additional protection is to simply buy more coverage rather than make all Vermont drivers pay higher rates to subsidize the resultant increase.”
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