Minimum Car Insurance Requirements, Cost to Miss. Motorists to Increase

Thousands of Mississippi motorists will see a higher bill when they renew their automobile insurance in 2006.

A new law that took effect Jan. 1 doubles the minimum amount of liability insurance Mississippi drivers must carry.

The change does not double the cost of car insurance, but drivers who have less than the new minimum amount of insurance will have to pay more.

“Drivers will see anywhere from a 10 to 25 percent increase in their premium depending on age, driving record and their experience,” said Joe Bryant, an agent with Shelter Insurance in Hattiesburg.

Liability insurance is required by state law and only protects people and property that may be injured or damaged by the driver who carries the policy.

The previous minimum liability requirement was $10,000 to cover one injured person other than the driver; $20,000 to cover the total number of people injured, or killed, other than the driver; and $5,000 to cover property damage when the policy was paid out.

“It really wasn’t (enough), the cost of injury and the cost of accidents have increased so much that those numbers are antiquated,” Bryant said. “I’ve seen numerous cases where someone gets in accident and their $5,000 insurance is not enough and they owe a large additional amount.”

The new law requires $25,000 for one person’s injuries, $50,000 to cover the total of all people injured or dead and $25,000 for property damage.

Younger drivers, those with a history of accidents or traffic violations and those with a poor credit history, tend to have the highest insurance premiums, Bryant said.

The insurance changes came about because lawmakers said that the old coverage was insufficient, particularly in comparison to other states.

Loretta Worters, vice president of the Insurance Information Institute, said Mississippi is now on par with most other states’ insurance laws.

“It’s an important change for drivers there, for their own protection,” Worters said. “We think a lot of the minimum requirements are woefully inadequate … our society is too litigious.”

The insurance industry and consumer groups generally recommend a minimum of $100,000 of bodily injury protection per person and $300,000 per accident since accidents may cost far more than the minimum limits mandated by most states, Worters said.

State Rep. Gary Chism, R-Columbus, an independent insurance agent in Columbus who was author of the new law, said the changes were in the best interest of Mississippi drivers.

“The customer is going to be better protected,” Chism said. “The insurance company will have to pay out more, but the customer is paying a little higher premium.”

Motorists may also see an increase in uninsured motorist coverage, Chism said. The change will protect insured drivers who are hit by a driver without insurance.
“In Mississippi, we have a very high percentage of uninsured drivers,” Bryant said.

Uninsured drivers may be more prevalent here because the state has a depressed economy, he said.

Driving without insurance carries a $1,000 penalty in Mississippi.

Bryant said he doubts the changes will motivate any drivers to take the risk of driving without insurance who are not already taking that gamble.

“I’ve always said that people who don’t have insurance aren’t going to buy insurance regardless,” Bryant said.

Although the change took effect Sunday, motorists will not switch over until their current policy expires. Most motorists have a six-month renewable policy.

While many drivers have expressed concern over the changes, it only affects those who have the least amount of car insurance required by law.

“It really doesn’t affect as many policy holders as you think it would,” Chism said.

Topics Trends Auto Legislation Mississippi