BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 1551 (Torres) - Insurance: Public Safety Employees
Amended: July 5, 2012 Policy Vote: Ins 9-0
Urgency: No Mandate: No
Hearing Date: August 16, 2012
Consultant: Maureen Ortiz
SUSPENSE FILE.
Bill Summary: AB 1551 prohibits an insurer from increasing auto
insurance premiums for a peace officer, member of the California
Highway Patrol (CHP) or firefighter if that individual was
involved in an accident while operating his or her private motor
vehicle while in the performance of his or her duty, and
provides that the employer will assume all liability that
results from such an accident.
Fiscal Impact: Unknown increase in employer liability/insurance
costs potentially in excess of $150,000. (General/Special/Local)
Background: Existing law protects peace officers, members of
the CHP, and firefighters who are involved in vehicular
accidents while on the job. These public safety personnel are
not required to report accidents in which they are involved
while on the job to their private automobile insurance carriers,
nor are their private automobile insurance carriers allowed to
increase their rates, or refuse to renew their policies, as a
result of an on-the-job accident. However, existing law limits
this protection to situations in which the peace officer, member
of the CHP, or firefighter is operating an authorized emergency
vehicle or an employer-leased or employer-rented vehicle at the
direction of his or her employer. The operation of a private
vehicle at the direction of his or her employer is not
protected.
Proposed Law: AB 1551 does the following:
1) Expands the exemption from mandatory reporting of traffic
accidents to a private insurer for public safety professionals
when accidents occur while using a personal vehicle at the
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direction of an employer.
2) Prohibits insurers from increasing auto insurance premiums
for public safety professionals when accidents occur when using
a personal vehicle at the direction of an employer.
3) Provides that if an accident and loss occurs while a public
safety professional is operating a personal vehicle at the
direction of an employer, the employer will be considered the
owner of the vehicle for the purpose of any liability and
defense of claim, and requires any losses to be borne solely by
the employer.
4) Provides that the employer shall assume liability for and
defense of a claim in which a dispute exists as to whether the
employer directed or requested the employee to use the private
passenger motor vehicle when the loss occurred.
5) Excludes the time period during which a public safety
professional is commuting to and from a regularly assigned work
location.
Related Legislation: In 2010, AB 2151 (Torres), a similar bill
was vetoed by the governor. In his veto message, Governor
Schwarzenegger wrote, "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."
Staff Comments: There are approximately 50,000 peace officers,
members of CHP, and firefighters employed by 33 departments and
agencies. As an example, over a period of 4 years, CHP officers
were involved in 38 accidents while operating privately-owned
vehicles while on duty. This equates to approximately 10
accidents per year out of about 7,600 officers, or 0.13 percent.
When extrapolated over all peace officers, CHP, and
firefighters, and allowing for a payment of $2,000 in liability
expenses or insurance costs, annual costs would be approximately
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$134,000 total funds.