Low Minimum Limits Unfairly Shift Financial Responsibility

For years, we’ve listened to those who beat the drum to maintain minimum liability insurance limits that have been in place for decades. They frame their viewpoint as pro-consumer, and on its surface, their message is an easy sell. After all, who wants to burden low-income families, especially in this still-jittery economy?

The time has come to push back with logic and a true pro-consumer agenda.

As the topic is brushed aside year after year, minimum liability insurance limits continue to stand still in certain pockets of the country while the world continues to spin. While the cost of living continues to increase, so does the cost of medical care and property values.

Meanwhile, fiscally responsible drivers are forced to pay more and more in auto insurance premiums because they must add underinsured motorists’ coverage to account for drivers who carry what have become inadequate minimum liability limits.

Inaction on this issue is not a victimless pursuit. You see, the driver who carries woefully low liability limits simply spurs another driver to overcompensate with additional coverage. This is an unfair shift of financial responsibility.

Overseeing the Insurance Agents & Brokers organization provides me with a unique perspective because my organization manages independent agents’ associations in three states: Delaware, Maryland and Pennsylvania. In 2010, our Maryland agents successfully spearheaded legislation to adjust the Old Line State’s minimum liability limits from 20/40/15 to 30/60/15. The change took effect Jan. 1, 2011.

We heard the predictions in Maryland – that premiums would skyrocket, that the already excessive number of uninsured motorists (estimated at 15 percent of drivers) would jump. But truth be told, we have found no evidence of either since the adjusted liability limits took hold.

The experience of their Maryland counterparts is further ammunition for our Pennsylvania agents who have told us time and again that the state’s severely outdated minimum limits (last addressed in the 1970s and now ranking second-lowest in the nation) are an issue for their customers – actually translating into higher premiums thanks to the need for underinsured motorists’ coverage.

We’ve championed this issue at the state Capitol several times in recent years. But in the end, our efforts were met with the same opposition. However, it is time that our agents, with their own pro-consumer logic – logic that is rooted in commonsense and stems from their work educating and guiding their customers – are heard.

This legislative session, which features new faces in the state legislature and the governor’s office, provides a new opportunity for our Pennsylvania agents to state their case. They can explain that simply shifting the burden of coverage is not a solution, but that the supposed impact on some consumers does not justify an actual impact on other consumers. That financial responsibility is what this issue is truly about.

We have our sights set on success this legislative session in Pennsylvania, just like our contemporaries at other agents’ associations in the remaining state strongholds (although their numbers are dwindling) across the nation. Let’s make this the year when logic trumps emotion, when the burden of coverage falls on the appropriate shoulders, and when all insured drivers carry adequate liability limits.

Topics Agencies Pennsylvania Maryland