NAII Says Calif. Bill Moves Uninsured Motorist Coverage in Wrong Direction

According to the National Association of Independent Insurers (NAII), a bill advanced by California legislators on June 20 would expand uninsured motorist insurance coverage to include willful criminal acts — violating the fundamental nature of this policy coverage. SB 81, which passed the Assembly Insurance Committee in a 12 to 3 vote, now heads to the Senate floor.

NAII is opposed to the legislation for two reasons. First, it believes the bill is inconsistent with California’s public policy against insuring intentional criminal activity.

Second, the NAII stated that SB 81 violates the basic rule that uninsured motor vehicle coverage only applies when there is an uninsured vehicle involved in an accident.

The NAII notes that Insurance Code Section 533 prohibits insurance coverage for deliberate criminal acts. SB 81 would contradict this well-established principle by requiring coverage under a policy’s uninsured motorist provisions when a person insured by an auto insurance policy uses the insured vehicle to carry out a criminal activity which injures another person insured under the policy.