BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1551
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          ASSEMBLY THIRD READING
          AB 1551 (Torres)
          As Introduced  January 26, 2012
          Majority vote 

           INSURANCE           13-0        APPROPRIATIONS      16-1        
           
           ----------------------------------------------------------------- 
          |Ayes:|Solorio, Hagman,          |Ayes:|Fuentes, Harkey,          |
          |     |Bradford,                 |     |Blumenfield, Bradford,    |
          |     |Charles Calderon, Carter, |     |Charles Calderon, Campos, |
          |     |Feuer,                    |     |Davis, Gatto, Hall, Hill, |
          |     |Beth Gaines, Hayashi,     |     |Lara, Mitchell, Nielsen,  |
          |     |Miller, Olsen, Skinner,   |     |Norby, Solorio, Wagner    |
          |     |Torres, Wieckowski        |     |                          |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |     |                          |Nays:|Donnelly                  |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           SUMMARY  :  Provides an exemption from the duty to report 
          automobile accidents to a private insurer if the accident occurs 
          while a public safety officer is driving his or her personal 
          vehicle at the request or direction of the employer, in the 
          course of the officer's duties.  Specifically,  this bill  :  

          1)Prohibits insurers from increasing the automobile insurance 
            premium charged to a peace officer or firefighter based on an 
            accident that occurs when they are driving a private vehicle 
            in the course of their duty at the request or direction of 
            their employer. 

          2)Specifies that peace officers and firefighters are not 
            required to report accidents to their insurer that occur when 
            they are driving a private vehicle in the course of their duty 
            at the request or direction of their employer.   

          3)Specifies that the employer of a peace officer or firefighter 
            may not require a peace officer or firefighter to report 
            accidents that occur when they are driving a private vehicle 
            in the course of their duty at the request or direction of 
            their employer.   

          4)Specifies that any time a private vehicle is used by a peace 








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            officer or firefighter at the request or direction of their 
            employer, the employer shall bear all liability for accidents 
            or injuries.

          5)Requires the employer of a peace officer or firefighter to 
            assume liability for any accident or injury when there is a 
            dispute regarding whether the vehicle was being used at the 
            direction or request of the employer.  

          6)Requires the private passenger insurer to reimburse the 
            employer if it is determined that the employer did not direct 
            or request the employee to use the vehicle when the accident 
            or injury occurred.

          7)Prohibits insurers from using a "good faith" delay in 
            reporting an accident as a basis to claim delayed reporting, 
            noncooperation, prejudice, or the like as a reason to avoid 
            any obligations they may have in the insurance policy.

          8)Defines "private passenger motor vehicle" or "private motor 
            vehicle" as a motor vehicle that is insured under a personal 
            automotive liability policy and has at least four wheels.

          9)Provides that a report indicating that a vehicle is owned and 
            operated by a peace officer or firefighter in the performance 
            of his or her duty and at the direction of his or her employer 
            is satisfactory evidence of financial responsibility.
           
          EXISTING LAW  : 

           1) Provides that no peace officer, member of the California 
             Highway Patrol (CHP), or firefighter is required to report, 
             to his or her private automobile insurance carrier, any 
             accident in which he or she is involved while operating an 
             authorized emergency vehicle or any employer-leased or 
             employer-rented vehicle, in the performance of his or her 
             duty, during the hours of his or her employment.

           2) Provides that no insurer may increase the premium on a 
             private automobile insurance policy, or deny renewal of the 
             private automobile insurance policy, of a peace officer, 
             member of the CHP, or firefighter, due to an accident in 
             which that individual was involved while operating an 
             authorized emergency vehicle in the performance of his or her 








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             duty, during the hours of his or her employment.

           3) Provides that, if an employee or former employee of a public 
             entity asks that public entity to defend him or her against 
             any claim or action for an injury arising out of an act or 
             omission occurring within the scope of his or her employment, 
             as specified, and if the employee or former employee 
             cooperates in good faith in the defense of that claim or 
             action, the public entity must pay any judgment or any 
             compromise or settlement of the claim or action to which the 
             public entity agrees.

           4) Requires the driver of a motor vehicle that is involved in 
             an accident which results in property damage in excess of 
             $750 or in bodily injury or death, to report the accident to 
             the Department of Motor Vehicles (DMV), provided that a 
             report is not required, if the motor vehicle involved in the 
             accident is owned or leased by, or under the direction of, 
             the United States, California, another state, or a local 
             agency.

           5) Requires every driver or employer that is involved in an 
             accident subject to the reporting requirements noted in 4) 
             above, to provide evidence of financial responsibility to 
             DMV, however that evidence may be established by filing a 
             report with DMV indicating that the motor vehicle involved in 
             the accident was owned, rented, or leased by or under the 
             direction of the United States, California, or any political 
             subdivision of California or a California municipality.

           6) Requires an owner of a motor vehicle to maintain evidence of 
             financial responsibility that meets specified minimum 
             standards.  This is almost always accomplished through the 
             purchase of an automobile insurance policy.

           FISCAL EFFECT  :  According to the Assembly Appropriations 
          Committee, no direct fiscal impact.




           COMMENTS  :   

           Purpose  .  According to the author, and the sponsor, California 








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          Professional Firefighters, local agencies are increasingly 
          asking safety officers, especially firefighters, to drive in 
          their personal vehicles to work-related locations.  This places 
          the officers' personal driving records at risk, and adversely 
          impacts their premium expenses for their personal automobile 
          insurance policy.  They argue that these costs should be part of 
          the employment costs covered by the public agency, and this bill 
          remedies the problem.

           Department of Insurance Regulations .  According to regulations 
          adopted by the Insurance Commissioner that govern when an 
          insurer may determine that a driver was principally at fault in 
          an accident, the insurer is prohibited from doing so if "The 
          driver was responding to a call of duty as a paid or volunteer 
          member of any police or fire department, first aid squad, or of 
          any law enforcement agency, while performing any other 
          governmental function in a public emergency."  While this 
          provision provides some protection to a public safety officer, 
          it does not fully address the issue of who should be responsible 
          for incidents that occur during the course of employment that do 
          not rise to the level of a public emergency.

           Mileage Rate  .  Public employees using their personal vehicles 
          for work purposes are commonly provided reimbursement based on 
          the number of miles driven.  The standard business rate of 
          reimbursement per mile is established each year by the Internal 
          Revenue Service.  The current reimbursement rate is $0.555 per 
          mile.  This rate includes items such as depreciation or lease 
          payments, maintenance and repairs, tires, gasoline (including 
          taxes), oil, insurance, and license and registration fees when 
          calculating the reimbursement rate.  

           Prior Legislation  .  In 2010, identical legislation was vetoed 
          (AB 2151 (Torres)).  The Governor's veto message provided:  

               This bill would provide that peace officers, members of the 
               California Highway Patrol, and firefighters would not be 
               required to report any accidents to their private 
               automobile insurer while operating their personal vehicles 
               at the request and direction of their employer. This bill 
               would further require all state and local agencies 
               employing peace officers or firefighters to pay the costs 
               of any accident and all damages regardless of whether the 
               driver of the vehicle was acting recklessly or with gross 








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               negligence. 

               While there may be reasons for state and local entities to 
               pay the costs of automobile accidents while employees are 
               responding to emergency situations in their private 
               vehicles, this measure would require indemnification in all 
               situations regardless of the driver's fault, which is 
               unwarranted. Moreover, the Internal Revenue 
               Service-established mileage reimbursement rate already 
               covers costs for insurance for employees that use their 
               private vehicles for work purposes. Since this measure will 
               unreasonably shift costs to public employers in a time of 
               fiscal crisis, I am unable to sign this bill.

           
          Analysis Prepared by  :    Paul Riches / INS. / (916) 319-2086 


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