Editorial: Governor sides with R.I. motorists

Gov. Gina Raimondo did Rhode Island motorists a big favor this week by vetoing an outrageous giveaway to a powerful State House interest. It was the first time this year the governor exercised her veto power.

Ms. Raimondo vetoed a measure sought by the auto-body industry and bitterly opposed by insurers, who warned Rhode Island's ridiculously high automobile insurance rates would soar even higher if it became law.

The auto-body lobbyists wanted to make it possible to slap insurers with triple damages if they declared a vehicle a "total loss" instead of paying for repairs.

In her veto message, the governor explained how extreme such a measure would be.

"If enacted, Rhode Island would be the first state in the nation where private individuals can sue their insurers for up to three times the amount of their damages if they feel their vehicle has been unfairly totaled," she said.

The governor noted that the state Department of Business Regulation already has the power to investigate and penalize the insurance industry "in cases where DBR can establish a pattern and practice of violations of the law.

"Indeed, DBR has aggressively exercised this authority to protect Rhode Island consumers -- ordering fines and restitution of more than $1.1 million to date in cases of confirmed violations by insurance companies," the governor said.

"Adding a private cause of action providing treble damages and attorneys' fees would be unprecedented nationally, could trigger a significant volume of potentially frivolous litigation, and will ultimately drive insurance premiums -- already among the highest in the nation -- even higher for Rhode Island drivers," she explained.

It could also "force some insurers to exit the Rhode Island market, making our car insurance market even less competitive and more expensive."

Rhode Island already has some of the highest insurance rates in the nation, with some of the nation's biggest hikes in recent years, according to a recent Gatehouse Media investigation. Rhode Island's average rate leapt from $1,368 in 2011 to $2,110 last year, a whopping 54% increase.

By comparison, the average annual rate in Massachusetts was only $1,277.

Journal Political Writer Katherine Gregg pointed out in a July 9 news article ("Raimondo vetoes bill favored by body shops") that the industry is one of the most active political players in Rhode Island.

People in the industry made at least $65,550 in political donations during the first three months of this year. That included at least $14,900 to House Speaker Nicholas Mattiello and $11,750 to Senate President Dominick Ruggerio.

"A single family, the Petrarca family, which includes former state Rep. Peter Petrarca and his sister and law partner, Jina Petrarca, contributed $22,550 to Rhode Island politicos during the first quarter. It was Jina Petrarca who again this year represented the family's Providence Auto Body at the legislative hearings," Ms. Gregg reported.

Some 22 auto-body bills that the legislature has passed since 2003 have turned Rhode Island into one of the most expensive states for auto insurance, Frank O'Brien, vice president of the American Property Casualty Insurance Association, said.

It is too bad the governor betrayed the public by signing into law "evergreen contract" legislation earlier this year, something that municipal leaders warned will weaken the public in negotiations and drive up their property taxes.

But she did the right thing in vetoing this brazen attempt to benefit the auto-body industry at the expense of the public.

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