It has been 46 years, almost half a century, that Connecticut has had the same minimum mandatory auto liability limits.
The limits of $20,000 per person, $40,000 per crash, and $10,000 for car repair or replacement are antiquated and have failed dismally to keep pace with rising costs of medical care, increased wages, and higher car costs. Since 1971, the cost of medical care has increased approximately 500 percent; wages have increased by 1223 percent; and car costs have risen 485 percent. Viewed a different way, $20,000 in liability coverage today approximates $3,400 in coverage in 1971; and $20,000 in 1971 equates to approximately $119,000 today.
So since it is obvious that the minimum limits must be increased, who benefits the most? Not surprisingly, most car crashes occur in urban areas of Connecticut. Five cities (Hartford, Bridgeport, Waterbury, New Haven, and Stamford) have accounted for 25 percent of all car crashes. When urban residents are injured, the minimum limits often fail to provide meaningful and fair compensation. There are insufficient funds for medical care, wage replacement, and car repairs. Those who have suffered physical injuries are then financially ruined.
Senate Bill 808, An Act Increasing The Minimum Amount Of Insurance Coverage Required To Issue A Motor Vehicle Operator’s License Or Certificate Of Motor Vehicle Registration, is a step in the right direction. The bill as passed by the Senate institutes a small increase in limits to $30,000 per person and $60,000 per crash. Although modest, this is a meaningful and effective change.
Opponents suggest that increasing the minimum limits will result in higher insurance premiums and more uninsured drivers thus defeating the purpose of mandatory insurance. However, in other states that have raised limits, this has not occurred. Of the 7 states that have raised limits since 2007 for which data is available on the number of uninsured drivers, 6 of the 7 saw a drop in uninsured drivers. The reason is that the number of uninsured drivers is correlated with electronic enforcement (immediate company notification to the Department of Motor Vehicles when an insurance policy lapses) and not limits. Maine, which has the highest minimum limits, has the second lowest number of uninsured drivers in the country.
And although raising the limits may result in a small increased premium, the benefits to urban residents far outweighs the minimal increase in cost. Of the states that raised limits since 2007, three saw no increase in premiums compared to country-wide premium changes for states that had no increase. The 5 states that did have an increase in premiums had very small changes, on average less than 2 percent. Since insurance rates vary wildly from company to company dependent on confidential proprietary formulas, it is not possible to know the precise increased premium in dollars per year; but based on an average annual premium for a minimum policy the increase may be as low as $10-20 dollars per year, assuming a change in mandatory limits to $30,000 per person, $60,000 per crash and $25,000 for car damage. Maryland, the most recent state to increase limits in 2012, saw no increase in premiums when limits were changed to $30,000 per person and $60,000 per crash.
The Senate was right to take this modest step, we urge the House to do the same. Raising the minimum limits is a no-brainer.
Michael A. D’Amico is President of the Connecticut Trial Lawyers Association.
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