Saturday, December 12, 2009

an e-mail message

From: ""
Date: Wed, 1 Jul 2009 20:22:10 GMT
Subject: uninsured/underinsured

Mr. Mionske,

I was the caller on this morning's Bike Show on KBOO who talked about how people who do not own cars cannot get insurance protection from uninsured and underinsured motorists.

You suggested that some people will buy a clunker to sit in the driveway so they can have access to a liability policy that includes an uninsured/underinsured feature. Until I donated my car to BTA last year -- not by any means a clunker, but very much unused --, this is in effect what I did. But my response to you this morning was that not everyone can do this, and in any event it is unfair to impose on me the cost of insuring against a risk someone else is creating.

You suggested that a motorist who pays for uninsured/ underinsured motorist coverage is also paying for a risk created by someone else, and my reply was that this is not really true, as every motorist participates in creating what I called a "global" risk. Accidents will happen, as they say, but if I do not operate a car, I am entirely on the receiving end.

In any event. Those two hundred words were just to remind you of our conversation and to introduce my actual subject.

Last year I sat down with Karl Rohde, when he was still at BTA, to volunteer my time and energies to his legislative and advocacy efforts, and I mentioned to him my idea that there "ought to be" a fund against which nonmotorists could claim if they were
injured by an uninsured or underinsured motorist. My thought was that the fund might be supplied from court costs and fines from traffic cases, and possibly from premiums on liability policies sold to higher risk drivers.

In the course of doing some background research on this, I stumbled across the a New York statute, copy attached, that has been in place for fifty years, that creates just such a fund, and derives the money entirely from insurance companies as a price of selling liability coverage in the state, period. This might be a bit much to put past the insurance lobby, but maybe in combination with the court costs and fines, etc. it could be saleable. There might also be a market for insurance companies to sell uninsured/underinsured coverage to nonmotorists, to cover situations in which the recovery limits from the fund might be too low. I have not really studied the caselaw arising under the New York statute, or any commentary as to its possible flaws in actual operation.

Turns out New Jersey has a similar law, copy also attached, actually dating back a few years before the New York enactment. Apparently there are similar statutes in Maryland and Michigan, though I have not yet tracked those down.

At the time, I included Mark Ginsburg in my e-mail correspondence with Karl, because he and I had each contributed comments to a thread on the shift2bikes listserv on the subject, and it occurred to me that as I began to try to draft a legislative proposal he might want to have some input. I am again copying him in on this message. Since Karl left BTA, I do not have an e-mail address for him, though I have lately picked him up on Twitter.

I did a bit of drafting on a bill to create a fund to cover people injured or killed by uninsured/underinsured motorists, working from the New Jersey statute, which apparently was the model for the New York statute. But I found finding myself sidetracked in the existing levels of required coverage, penalties for noncompliance, etc. My thinking was we do not want to do this in isolation, but instead convey an across the board message that we are through fooling around. Thus, while the New York and New Jersey statutes use money from liability insurers to create the fund, I am thinking of also adding in money from fees assessed in traffic cases and maybe from driver's license fees, maybe a surcharge on premiums on liability policies sold to higher risk drivers.

Also attached are some data indicating how serious the problem is, in case anyone is not looking. No monetary figures yet, unfortunately, but reasonably good statistical measures showing that about 14 pct. of all motorists out there are uninsured. Apply that figure to the number of injury events, and you are talking real money.


attachments included


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