Insurers Back Consumer Choice in UM/UIM Coverage

April 7, 2004

The Mississippi House Insurance Committee heard testimony this week on a bill designed to reduce the minimum number of stacked vehicles on a driver’s uninsured and underinsured motorist coverage.

S.B. 2788 would allow consumers to choose “non-stacking” uninsured motorist coverage on a policy with as few as two vehicles, down from the current ten-vehicle minimum. Stacking occurs when coverages applicable to more than one vehicle are combined, or “stacked,” to pay damages from a single loss.

“While stacking essentially increases coverage limits available to pay claims, it comes at a price to insurers and consumers,” said William Stander, regional manager for the Property Casualty Insurers Association of America (PCI). “For example, policyholders may not insure all owned vehicles with the same insurer. An individual may also be insured on several different policies. This discourages premium discounts and other savings insurers pass along to consumers.”

The All-Industry Research Advisory Council conducted a study that found states allowing stacking had uninsured motorist loss payments that were 28 percent higher than in states without stacking – leading to a comparable increase in premiums for consumers.

“Under Mississippi’s current law requiring mandatory offer of uninsured motorist coverage, consumers with more than one vehicle cannot purchase basic coverage,” added Stander. “They have only two choices: buy more than they need, or don’t buy it. And that’s no choice at all.”

PCI expected the House Insurance Committee to vote on SB 2788 on Tuesday, April 6.

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