Idaho House Passes UIM Rejection Notice Bill

February 15, 2008

The Idaho House passed legislation (HB 429) on Wednesday that requires auto insurance policies provide underinsured motorist coverage unless the policyholder signs a form specifically rejecting the coverage.

HB 429 would mandate insurers provide underinsured motorists coverage matching the state’s minimum limits for all policyholders who purchase auto liability coverage, unless the policyholder rejects or modifies the coverage. The policyholder would still have the ability to reject – or increase – either or both coverages. The consumer would have the opportunity to reject these coverages prior to the initial policy being issued or at the time of the first renewal or replacement of a policy for an existing policyholder. A standard statement explaining UM and UIM coverage, and forms for rejecting either or both would be developed by the Department of Insurance under the bill.

“Uninsured and underinsured motorist insurance are policy coverage options consumers should carefully consider,” said Kenton Brine, NW Regional Manager for the Property Casualty Insurers Association of America (PCI). “The financial consequences of not having uninsured and underinsured motorist coverage can be severe for motorists involved in accidents with an uninsured driver – or with a driver who has liability insurance policy limits which are insufficient to pay for the full cost of injuries or damage. Under this bill consumers can weigh their options, make an informed choice, then sign the rejection form to acknowledge that they are choosing not to buy the coverage, keep the coverage as-is, or increase the coverage to meet their needs.”

Brine thanked bill sponsor Rep. Russ Mathews (R-Idaho Falls) for his work on the issue of providing information to insurance consumers about uninsured and underinsured motorist insurance policies to consumers. “While understanding that insurers do not favor mandates, Rep. Mathews has shown leadership in bringing parties together to achieve a compromise that we believe is to the overall benefit of consumers in Idaho,” Brine said. “We appreciate the dedication Rep. Mathews has shown on behalf of Idaho consumers and in the interest of a healthy, competitive insurance marketplace.”

Source: PCI

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