We’ll show those insurance weasels

Rhode Island goes on the attack, sort of:

The House of Representatives today unanimously approved legislation intended to add a little more protection for auto insurance customers who may need to file a loss claim with their insurer because of a minor fender-bender.

Under current state law, an auto insurance company can refuse to renew a customer policy if the company has to pay out more than $1,000 for a claim in any one policy year. The legislation approved today by the House [pdf] will raise that limit to $1,500.

It also increases to $1,500 — from the $1,000 figure in current law — the property damage claim limit below which an auto insurer is prohibited from assessing any premium surcharge against a policy holder.

This is being billed, of course, as a consumer-protection measure. But notice:

“The current $1,000 threshold has not been increased in more than seven years, and yet repair costs have grown incrementally to an average cost of $2,800,” said Representative [Brian Patrick] Kennedy [who sponsored the bill]. “We want drivers to take personal responsibility for their actions, but it’s important for insurance companies to realize that minor accidents do happen, and they should not be dropping a customer for what amounted to a relatively small insurance claim loss.”

If the average repair is $2800, what possible good is a $1500 threshold?

And there’s this:

Representative Kennedy said he was aware of an individual whose car was struck by a deer, resulting in several thousands of dollars in damage. “Even discounting a policy holder’s deductible, the work that needed to be done was going to result in a loss claim of more than $1,000,” he said. “For an accident that wasn’t even the driver’s fault, suddenly the policy holder is put in a precarious position, in that the insurance company, under state law, would be allowed to refuse to renew this customer’s policy, based on the monetary claim.”

Now if there’s one thing I can relate to, it’s having a car struck by a deer. As I recall, they quit counting the damage at the $6000 mark. Fat lot of good even a $2800 threshold would have done me.

And no, my insurance carrier didn’t cancel me. Then again, I’m not in Rhode Island.

(Via Justin Katz.)


  1. Jeffro »

    3 May 2009 · 3:01 pm

    My sympathy for the plight of insurance companies knows no bounds.

  2. Tatyana »

    3 May 2009 · 3:48 pm

    Oh, RI is a marvelous state. I’d a 2-yr project there once. The memories will haunt me forever.

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