Consumer Attorneys of California: Consumer Advocates Unveil Legislation to Protect California Drivers

SACRAMENTO, California, Feb. 17 (TNSPol) -- Consumer Attorneys of California issued the following news release:

The last time the State of California took action to protect drivers from serious financial harm by setting mandatory auto insurance liability minimums was 55 years ago - putting California in the bottom three states in the nation. In today's economy, where the cost of medical care and vehicle repairs have increased 40-fold and 10-fold respectively, those minimums do very little to protect the victims of motor vehicle accidents.

Today, consumer advocacy groups are sounding the alarm - calling on lawmakers to modernize the mandatory minimums offered by auto insurers by passing SB 1107, authored by Senator Bill Dodd (D-Napa), to protect motorists from accidents caused by underinsured or uninsured drivers.

Michael Nye, California Alliance for Retired Americans' (CARA) Legislative Committee Co-Chair, said, "California's outdated and woefully inadequate mandatory auto insurance liability minimums leave low-income and even middle-class families - including many retirees and other aging adults - at risk of falling deep into financial debt following a serious vehicular accident. Victims should not be forced to take out thousands of dollars in loans, which often take years to pay off, just to cover damages caused by a negligent driver. The responsibility to protect consumers now falls on the legislature, which must pass strong legislation that requires auto insurers to modernize their products to protect the 21st century drivers from harm."

"Californians have been underinsured for too long and it is costing them dearly," Sen. Dodd said. "My bill ensures crash victims get the financial support they need while covering those who might be liable for soaring medical and property damage costs. It modernizes our insurance laws, bringing our state in line with what the rest of the country deems the right amount of coverage."

"Over the last half-century, the cost of medical care and vehicular repairs has skyrocketed - leaving too many motorists underinsured and unprepared to cover the cost of being a victim of a negligent driver," said Craig Peters, President, Consumer Attorneys of California. "Auto insurers cannot continue to offer products that cover this century's drivers based on last century's standards. CAOC is proud to support Senator SB 1107 to modernize mandatory liability minimums, and ensure drivers are fully protected by underinsured motorist coverage."

The proposed measure would make two significant changes to California law:

* In 1967, the legislature set liability minimums at $15,000 for single injury or death; $30,000 for the injury or death of more than one person, and $5,000 for property damage. Under the new law, auto insurers would be required to offer modernized, mandatory minimums of $30,000 / $60,000 / and $25,000 respectively.

* Under current law, auto insurers are not required to reimburse policyholders with underinsured motorist coverage (UIM) for the cost of damages beyond the amount of liability coverage carried by the negligent driver. New legislation would ensure drivers with UIM are fully protected. As usual, the negligent driver's insurer would provide coverage up to the driver's liability limit; and the victim's insurer would now be required to pay out the difference up to the UIM limit.

Example: The Ojeda Family

California's antiquated rules put low-income families at risk of serious financial debt, especially when they become the victims of an accident caused by an uninsured or underinsured driver.

The Ojeda family is a tragic example: a father and his two daughters were driving near their home in Fresno, when they were hit by an 18-year-old driver at 40 miles per hour. Pulled from the flaming wreckage, doctors found the father suffered a concussion that caused him to miss five weeks of work. His 10-year-old daughter suffered burns on her chest, and his 5 year-old daughter's two front teeth were knocked out. The car was totaled.

The negligent driver was covered by the outdated mandatory minimums, so the Ojeda family received just $30,000 for their injuries and $5,000 for the totaled car - but had to take out thousands in loans to cover the total cost of the accident. They are still making payments on those loans today.