Vermont Governor Vetoes Underinsured Motorist Bill

June 9, 2004

Vermont Gov. James Douglas’ (R) veto of a bill (H. 780) that would have expanded underinsured (UIM) motorist coverage will save Vermont drivers from higher auto insurance costs.

According to the American Insurance Association (AIA, the bill would have reversed a Vermont Supreme Court decision in the case of Colwell vs. Allstate. AIA called for the veto in a May 24, 2004 letter to the governor.

The Department of Banking, Insurance, Securities and Health Care Administration studied the coverage issues raised by H.780 in a report to the legislature dated.

“Based on information from companies that were surveyed for the report, the Department concluded that this legislation was likely to result in an increase in automobile insurance premiums in Vermont,” said Laura Kersey, AIA assistant vice president, northeast region.

The study was based on a survey of 27 states, and it also found that Vermont’s underinsured motorist statute – prior to the passage of H.780 – is on par with a majority of the states. The study further concluded that the ruling this bill sought to reverse in Colwell v. Allstate is consistent with existing insurer claim practices, Kersey said.

“We are pleased that Gov. Douglas addressed AIA’s concerns by vetoing this measure, which we believe would have unnecessarily increased auto insurance costs for Vermont’s motorists,” Kersey said.

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