BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 81|
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THIRD READING
Bill No: SB 81
Author: Speier (D)
Amended: 5/08/01
Vote: 21
SENATE INSURANCE COMMITTEE : 5-1, 3/21/01
AYES: Speier, Escutia, Figueroa, Scott, Soto
NOES: Oller
SENATE JUDICIARY COMMITTEE : 5-2, 5/1/01
AYES: Escutia, Kuehl, O'Connell, Peace, Sher
NOES: Ackerman, Haynes
SUBJECT : Motor vehicle insurance and uninsured motorist
coverage
SOURCE : Author
DIGEST : This bill permits an injured insured owner of a
motor vehicle to recover damages under the uninsured
motorist coverage of his/her policy, if he/she was struck
by his/her own insured car while it was being operated
without his/her permission in the course of criminal
activity. The criminal activity must be one to which the
injured insured was not a party, and must have been
documented in a police report.
ANALYSIS : 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
CONTINUED
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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).
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 5/8/01)
Consumer Attorneys of California
OPPOSITION : (Verified 5/8/01)
Association of California Insurance Companies
Alliance of American Insurers
ARGUMENTS IN SUPPORT : The author's office states the
purpose of the bill is to ensure that a crime victim is
paid for their bodily injury when their own cars are used
to injure them.
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.
The author believes that it is unfair to deny crime victims
coverage just because the vehicle that struck them was
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their own. If the same vehicle caused injury to someone
else in the same manner, the injuries would be covered.
Or, if the owner was injured by a vehicle owned by someone
else, in the same manner, and that other driver was not
insured, the owner would be able to recover for the
injuries sustained. Thus, the injured insured owner of a
vehicle could be doubly victimized: once by the criminal,
and again by the laws of chance.
This bill is needed in order to correct this anomalous
situation, and provide those victimized by criminal
activity of others involving their own insured motor
vehicle with an avenue to recover for damages sustained
therefrom.
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.
ARGUMENTS IN OPPOSITION : The Association of California
Insurance Companies (ACIC) opposes this bill because, they
contend, it would invite claims in domestic violence cases,
fraud, and such acts as child molestation, arson, or
intentional collision of one insured vehicle into another
insured vehicle.
The ACIC argues that what will happen in domestic violence
cases is that "abusers will get paid for their abuse. As
the spouse of the person being beaten, the abuser is
considered by definition of the policy, an "insured"
person. When the insurance check comes in the mail, the
abuser can cash it just as easily (or maybe even more
easily) as the abusee.
The author argues in response to ACIC that collusion by
spouses in this case, where one strikes the other with a
car and must report the incident to the police to get
coverage, is such a highly visible situation that it would
certainly invite investigation by the police and would
probably result in the couple being charged with trying to
defraud the insurance company.
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DLW:sl 5/8/01 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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