BILL ANALYSIS
SENATE COMMITTEE ON INSURANCE
Senator Jackie Speier, Chair
SB 81 (Speier) Hearing Date: March 21,
As Proposed to be amended: March 21, 2001
Fiscal: No
Urgency: No
SUMMARY
Would allow a victim of a crime to be paid from his/her
uninsured motorist coverage when they are injured by their
own car during the course of a crime, provided that the
victim is not a party to the crime.
DIGEST
Existing law
1. Requires that all automobiles driven upon public roads
be covered by liability insurance (or a bond) for
bodily injury in a minimum amount of $15,000 for injury
to one person and $30,000 for injuries to all persons;
2. Requires that all such policies include coverage for
bodily injury to the policyholder if the policyholder
is injured by an uninsured or underinsured vehicle (UM
coverage);
3. Permits the policyholder and company to agree to
increase, reduce or eliminate UM coverage, under
specified circumstances;
4. Excludes an insured from payment under his/her own UM
coverage when damaged by his/her own vehicle;
5. Does not generally require that a police report be
filed to support a claim to payment under UM coverage,
except if the claimant does not know the owner of the
vehicle (hit and run);
This bill
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1. Would allow a victim of a crime to be paid from his/her
uninsured motorist coverage when they are injured by
their own car during the course of a crime, provided
that the victim is not a party to the crime;
2. Would require that, as a condition of making a valid
claim, the crime must be reported to the police;
COMMENTS
1. Purpose of the bill . To ensure that a crime victim is
paid for their bodily injury when their own cars are
used to injure them.
2. Support .
This bill was authored because Judge Nott of the Court
of Appeal, Second Appellate District, wrote a
concurring opinion in a case involving a carjacking.
He asked that the Legislature extend coverage, under a
UM policy, to victims injured by their own cars during
carjackings. The author, upon reflection, believed
that limiting payment to carjacking victims would
result in an ever-expanding list of crimes that should
be eligible for payment. Furthermore, the question
arose about whether payment should be contingent upon
how a crime was charged by a District Attorney (i.e.
carjacking vs. kidnapping) or upon whether a person was
simply the victim of a crime.
In the case that sparked this bill, Salvator Xuereb was
run over by his own GMC Yukon when a carjacker
attempted to steal the vehicle. According to his
attorney, Mr. Xuereb was nearly killed and spent six
months in the hospital. The victim had liability and UM
coverage, but liability coverage pays for damage to
another driver. Mr. Xuereb sought payment under his UM
coverage relying upon policy language that, he claimed,
was ambiguous about whether coverage would be extended
under the facts in his case.
The Appellate Court decided that UM coverage, under
California law and the terms of Mr. Xuereb's policy,
did not require payment to the victim when the car that
damaged him was his own. The Court found that the
policy language, and statute, are not ambiguous on this
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subject. However, two members of the Court stated that
any unfairness that is fostered by the present law
needed to be addressed by the Legislature. Judge Nott
went further and asked that the Legislature extend
coverage to a carjacking victim under their UM policy.
For the reasons related above, the author has
determined that coverage should be extended to crime
victims.
California requires that UM coverage be part of every
auto insurance policy or that the policyholder decline
or reduce UM coverage through an explicit agreement
with the insurer. Perhaps, because of the "opt-out"
nature of existing law, about 84% of all Californians
have UM coverage. The average cost of UM coverage in
California is $83 per vehicle.
In contrast, only 59% of policyholders have medical
payments coverage (medpay), the other form of auto
insurance that might pay a crime victim for bodily
injury. While UM coverage is typically equal to or in
excess of minimum liability limits, medpay is typically
$1000 -$2500. The average cost of medpay coverage is
$52 per vehicle.
The author believes that it is unfair to deny crime
victims coverage just because the vehicle that injured
them was their own. Identical injuries caused by a car
owned by someone else would, if the car was insured,
result in payment for injuries. A crime victim should
not be doubly victimized: once by the criminal and
again by the laws of chance.
Furthermore, the author believes that victims of crime
who cannot be paid from their UM coverage are usually
forced to rely for payment upon health insurance, the
taxpayers or the Victims of Crime program. This is an
inappropriate burden for purchasers of health
insurance, taxpayers or for other crime victims because
the costs of owning and driving a vehicle should be
paid, in the author's opinion, by those who own and
drive the vehicles. If not, taxpayers and others pick
up the costs. For example, the Office of Statewide
Health Planning and Development (OSHPD) has informed
the author that Medi-Cal was typically charged in
excess of $200 million annually for automobile-related
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injuries during the mid-1990's, the most recent year
for which the author has data. The Victims of Crime
program has, on occasion, been seriously underfunded
and has been unable to pay for other priorities, such
as counseling for children who are victims of sexual
abuse.
According to the Department of Justice, in 1999 there
were approximately 1,024 carjackings, 1,611
kidnappings, and 162 vehicular manslaughters in
California. It can be assumed that most of the
kidnappings probably didn't involve the victim's car,
thus the total number of crimes likely to prompt
coverage under this bill is, probably quite small.
However, for victims of crime involving their own
automobile, the costs can be horrific. In light of the
relatively few number of victims that will likely be
paid if this bill passes, their urgent needs, and the
longstanding public policy that the costs of injuries
from cars should be paid for by vehicle owners through
the insurance system, the author believes that SB 81 is
prudent and that crime victims will benefit.
Consumer Attorneys of California supports the bill,
stating that it is unjust for carjack victims to be
denied coverage just because their own car is used to
injure them. Consumer Attorneys also notes that a
police report will be required to confirm the criminal
activity.
3. Opposition . None
4. Related legislation:
None
POSITIONS
Support:
Consumer Attorneys of California
Oppose:
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None
Consultant: Brian Perkins (445-0503)