BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 438|
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THIRD READING
Bill No: SB 438
Author: Hill (D)
Amended: 4/6/15
Vote: 21
SENATE TRANS. & HOUSING COMMITTEE: 11-0, 4/7/15
AYES: Beall, Cannella, Allen, Bates, Gaines, Galgiani, Leyva,
McGuire, Mendoza, Roth, Wieckowski
SENATE JUDICIARY COMMITTEE: 7-0, 4/21/15
AYES: Jackson, Moorlach, Anderson, Hertzberg, Leno, Monning,
Wieckowski
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SUBJECT: Motor vehicle accidents: reportable property
damageMotor vehicles: reportable property damage.
SOURCE: Author
DIGEST: This bill raises the reportable property damage
threshold for traffic accidents from $750 to $1,000.
ANALYSIS:
Existing law:
1) Requires all drivers and motor vehicle owners to carry
evidence of financial responsibility, defined primarily as
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written evidence of valid automobile liability insurance.
2) Defines proof of financial responsibility as resulting
from ownership or operation of a motor vehicle and arising
by reason of personal injury to, or death of, any one
person, of at least $15,000, and, subject to the limit of
$15,000 per person injured or killed, of at least $30,000
for the injury to or death of two or more persons in any one
accident, and for property damages (in excess of $750) of at
least $5,000, resulting from any one accident.
3) Provides that proof of financial responsibility may be
given by a bond, which is conditioned for the payment of
specified amounts, and provides for the entry of judgment on
motion of the state in favor of any holder of any final
judgment on account of property damages exceeding $750, or
injury to any person caused by the operation of the person's
motor vehicle.
4) Requires a driver who is involved in a traffic accident on
a street or highway that has resulted in property damage
exceeding $750, or in the bodily injury or death of any
person, to report the accident within 10 days to the
Department of Motor Vehicles (DMV). Provides that this
report shall include evidence of financial responsibility.
Allows the driver to report either personally or through an
insurance agent, broker, or legal representative.
5) Exempts a driver from reporting if the vehicle involved in
the accident is owned or leased by a federal, state, or
local agency. Also exempts a driver from filing a report if
the accident occurs off a street or highway (for example, on
the driver's private property) and results in damage only to
the property of the driver or vehicle owner and does not
cause bodily injury or death to another person.
6) Requires a driver of a vehicle that is owned, operated, or
leased by his or her employer at the time of the accident to
report the accident to the employer within five days.
Requires the employer, within 10 days of receiving such a
report, to file a report with DMV (unless the employer is a
public agency). Requires a driver of a public transit
vehicle to report a reportable accident to the transit
system within 10 days. Requires the transit system to
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transmit the report to DMV within 10 days and maintain a
record of the report.
7) Provides, if the driver is not the owner of the vehicle
and is physically incapable of making the report, that the
owner shall file a report with DMV as soon as he or she
learns of the accident.
8) Requires DMV to suspend the driving privilege of any
person who fails, refuses, or neglects to report a
reportable accident. Prohibits DMV from suspending the
individual's driving privilege until 30 days after DMV has
sent notification to the individual of the pending
suspension. Provides that the suspension shall remain in
effect until DMV receives a report or evidence of financial
responsibility.
9) Provides that all reports pursuant to this law are
confidential, except that DMV shall disclose specified
information from the reports upon request.
10) Requires DMV to include a summary of the financial
responsibility law, reportable accident requirements, and
penalties for non-compliance with every motor vehicle
registration, registration renewal, and transfer of
registration, as well as with each driver's license and
license renewal.
11) Authorizes DMV to suspend or revoke the driver's license
of any person who is found liable for property damage of
$750 or more, or bodily injury or death, from the operation
of a motor vehicle on a California highway by the person or
any other person for whose conduct the person was liable,
unless the liability resulted from the person's signing the
application of a minor for a driver's license, and the
person fails to pay these damages.
12) Provides that every judgment is deemed satisfied when:
a) $15,000 has been credited, upon any judgment in excess
of that amount, or upon all judgments collectively, which
together total more than that amount, for personal injury
to or death of one person as a result of any one accident.
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b) Subject to the limit of $15,000 as to one person, the
$30,000 has been credited, upon any judgment in excess of
that amount, or upon all judgments collectively, which
together total more than that amount, for personal injury
to or death of more than one person as a result of any one
accident.
c) $5,000 has been credited, upon any judgment in excess
of that amount, or upon all judgments collectively, each
of which is in excess of $750, and which total more than
$5,000, for damage to property of others as a result of
any one accident.
d) The person or a designee has deposited with DMV a sum
equal to the amount of the unsatisfied judgment for which
the suspension action was taken and presents proof of
inability to locate the person owed damages.
This bill raises the property damage threshold for a reportable
accident from $750 to $1,000. It makes corresponding changes to
the minimum judgment amount that qualifies a judgment debtor who
has been found liable for damage but who has failed to pay the
judgment rendered thereon, to have his or her driver's license
suspended or revoked.
Comments
Purpose. The author notes that state law requires a driver
involved in a reportable accident to file a "Report of Traffic
Accident Occurring in California" with DMV. This form, known as
an SR-1, includes the name, address, and insurance information
of each party involved in the accident, along with injury and/or
property damage details. The property damage threshold that
characterizes an accident as reportable has not been updated
since 2002. The author notes that according to the U.S. Bureau
of Labor Statistics, $750 in 2002 dollars is equivalent to
$984.15 in 2014 dollars. The average "fender bender" - a minor
accident that occurs at low speed and involves a vehicle's
bumper - often results in damage exceeding the $750 threshold.
The author states that because of the outdated threshold, DMV
collects more than 54,000 SR-1 reports per month; this creates
unnecessary paperwork for DMV and an unnecessary burden for
California drivers and insurers.
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Why must drivers report accidents to DMV? A driver must file an
SR-1 for a reportable accident regardless of whether or not he
or she was at fault. This information is public record and is
accessed regularly by law enforcement and insurance companies.
The SR-1 acts as a check to help DMV affirm that a driver is
insured as required by state law. Existing law also, however,
requires DMV to require proof of insurance when an individual is
registering a vehicle or renewing or transferring the
registration of a vehicle. In addition, existing law requires
insurance companies in California to electronically report
vehicle insurance information to DMV (other than vehicles
covered by commercial or business insurance).
The "principally at-fault" threshold. Proposition 103, approved
by California voters in November 1988, requires the Department
of Insurance (DOI) to approve new rates before insurance
companies can implement them. It also requires insurers to
provide a "good-driver discount" of 20% to qualified drivers,
defined, in part, as drivers that the insurer has not determined
to be "principally at-fault" in an accident during the past
three years. Proposition 103 establishes that an insurer may
determine that a driver is principally at-fault if his or her
actions or omissions were at least 51% of the legal cause of the
accident, and the accident either resulted in bodily injury or
death, or caused property damage that exceeded a certain
threshold.
The principally at-fault threshold was initially set at $500,
based on DMV's reportable accident threshold statute at the
time. SB 1590 (Karnette, Chapter 766, Statutes of 2002) raised
the DMV reportable threshold from $500 to $750. Subsequently,
AB 1718 (Committee on Transportation, Chapter 451, Statutes of
2003) increased the minimum level of property damage to $750 to
conform with the new reportable threshold. In 2003, DOI
implemented regulations to update the principally at-fault
threshold to $750.
In December 2011, DOI raised the principally at-fault threshold
to $1,000, based on the premise that the higher threshold was
more in keeping with current costs and would help prevent
drivers from being denied a good driver discount. This bill
raises the DMV reportable accident threshold, and the minimum
motor vehicle accident property damage limit, to $1,000 in order
to align with the DOI principally at-fault threshold.
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FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
SUPPORT: (Verified5/4/15)
National Association of Mutual Insurance Companies
Pacific Association of Domestic Insurance Companies
Personal Insurance Federation of California
OPPOSITION: (Verified5/4/15)
None received
ARGUMENTS IN SUPPORT: The Personal Insurance Federation of
California (PIFC) states that this bill makes the Vehicle Code
consistent with principally at-fault accident determinations
under the DOI regulations. PIFC believes that by requiring DMV
reporting to be consistent with principally at-fault
definitions, this bill could lead to a better customer
experience and potentially reduce paperwork for customers.
Prepared by: Erin Riches / T. & H. / (916) 651-4121
5/6/15 16:16:20
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