SACRAMENTO — The Assembly Insurance Committee bowed to heavy industry lobbying and blocked legislation Wednesday giving motorists the full benefit of their policies when they’re hit by an underinsured motorist.
The committee decreed on a 6-to-3 vote to send AB 1063 by Assemblyman Steven C. Bradford (D-Inglewood) to interim study, an action that in California’s Capitol is tantamount to killing the measure.
John Montevideo, president of the Consumer Attorneys of California, said the push by his organization and other consumer-rights groups on behalf of Bradford’s bill was undone by an effort led by the Insurance Committee’s chairman, Assemblyman Jose Solorio (D-Santa Ana).
“Today’s action in the Insurance Committee does nothing more than allow big insurance companies to block policyholders from collecting the full benefit of their own insurance policy when they need it,” Montevideo said.
Assemblyman Solorio took the unusual step of personally making the motion to send the bill to interim study over the objection of its author, Bradford, who asked for an up-or-down vote.
Bradford’s bill failed to muster the required votes to escape the committee despite an appearance at the hearing by state Insurance Commissioner Dave Jones, who reassured lawmakers that the legislative effort would not cause ballooning insurance costs.
“Consumers should get what they pay for,” Jones told the committee, noting that a typical UM/UIM policy might nudge up by as little as $3 if AB 1063 went into effect.
Under the legislation, insurance firms would be required to pay motorists the full policy limit of their uninsured/underinsured motorist coverage in cases where the cost of their injuries and damages exceeded any compensation from an at-fault driver plus their UM/UIM benefits.
Currently, insurance companies subtract any compensation collected from the underinsured driver from a motorists’ UM/UIM limits. For instance, a driver with health care costs exceeding the $100,000 policy limit of their UM/UIM coverage who received $25,000 from an underinsured at-fault driver would receive $75,000 from their own insurer.
Bradford’s bill would have allowed a driver in that tragic scenario to tap their full $100,000 UM/UIM policy in addition to collecting $25,000 from the underinsured motorist who hit them.
Assembly members Mike Feuer (D-Los Angeles), Nancy Skinner (D-Berkeley), Bob Wieckowski (D-Fremont) and Charles Calderon (D-Whittier) all voiced support for the pushing the bill out of committee over the objections of Solorio and several Republicans.
“If we really want people to get what they pay for we ought to support this bill,” Feuer said. Skinner added that motorists “need to know” their insurance truly provides full coverage to their policy limits.
Consumer Attorneys of California was joined in supporting the bill by several other consumer groups, including CALPIRG and Consumer Watchdog.
Doug Heller, Consumer Watchdog executive director, told the committee that UM/UIM is one of the insurance industry’s most profitable lines of coverage in part “because they’re not paying out what they should” to motorists.
The committee also heard from two victims – retired correctional youth officer Jim Green and Folsom working mom Melanie Williams-Irby – who suffered life-altering injuries only to find their insurers wouldn’t pay to the full limits of their coverage, payments that would have only gone partway to offset mounting bills. (You can read Williams-Irby’s testimony here and Green’s testimony here.)
Montevideo, CAOC president, vowed to continue the push to see California law changed so consumers can tap the full benefit of their UM/UIM policy in those catastrophic instances when they need help.
“California motorists should be able to trust that they really are in good hands,” Montevideo said. “Right now in California, insurance companies are using those good hands to pick consumers clean.”