BILL ANALYSIS
SB 81
Page 1
SENATE THIRD READING
SB 81 (Speier)
As Amended May 8, 2001
Majority vote
SENATE VOTE :24-13
INSURANCE 12-3
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|Ayes:|Calderon, Chavez, Diaz, |
| |Dutra, Frommer, Havice, |
| |Horton, Keeley, Kehoe, |
| |Richman, Steinberg, |
| |Vargas |
| | |
|-----+--------------------------|
|Nays:|Bogh, John Campbell, |
| |Harman |
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SUMMARY : Permits an injured, insured owner of a motor vehicle
to recover damages under the uninsured motorist coverage of
his/her policy if he/she is struck by his/her own insured car
while it is being operated without his/her permission in the
course of criminal activity. The criminal activity must be one
to which the injured insured is not a party and must be
documented in a police report.
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)Defines "uninsured motor vehicle" as a vehicle for which there
is no bodily injury liability insurance or bond applicable at
the time of the accident, or there is the applicable insurance
or bond, but the company writing the insurance or bond denies
coverage thereunder or refuses to admit coverage thereunder
SB 81
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except conditionally or with reservation.
4)Permits the policyholder and insurer to agree to increase,
reduce, or eliminate UM coverage, under specified
circumstances.
5)Excludes an insured from payment under his/her own UM coverage
when damaged by his/her own vehicle.
6)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.
FISCAL EFFECT : Unknown
COMMENTS : The author introduced this bill in response to an
unpublished Second Appellate District Court decision which
reaffirmed the decision in Denny v. St. Paul Guardian Ins. Co .
(1987) 196 Cal. App. 3d 73. The court in Denny held that when
compensation for injuries sustained is sought pursuant to
California Insurance Code Section 11580.2, relating to uninsured
motorists, in conjunction with the provisions of a particular
policy, "uninsured motorist coverage is not dependent upon the
uninsured state of the driver of the vehicle, but upon the
uninsured state of the vehicle" (Id. at p. 77). Because of
this, an uninsured motorist policy does not provide coverage to
victims injured by their own insured vehicles.
The author believes that it is unfair to deny crime victims
coverage just because the vehicle that struck them was their
own. The author notes that 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 and that other driver was not insured, the injured
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 meant
to protect him.
According to the Department of Justice, there were approximately
1,024 carjackings, 1,611 kidnappings, and 162 vehicular
manslaughters in California in 1999. Therefore, the total
number of crimes likely to prompt coverage under this bill is
quite small.
SB 81
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In opposition, the Association of California Insurance Companies
(ACIC) contends that this bill
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.
ACIC argues that "the intentional acts and familial exclusion
portions of an insurance policy are not arbitrary concepts that
should be disregarded without a compelling reason. These
essential parts of an insurance contract are designed to protect
both insurers and policyholders from fraud and increasing
premiums."
ACIC further argues that in domestic violence cases "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."
In response to ACIC, the author argues that collusion by
spouses, 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.
The author notes that California law currently makes insurance
settlements the separate property of the injured spouse and that
those few crime victims who are the victims of spousal abuse
involving their own automobile ought to be treated with the
dignity and respect to which they are entitled. The author
further notes that, "to presuppose that they would permit
enrichment is an insult to all victims of domestic violence."
The author further contends that the provision in this bill
requiring that the injured insured not be a party to the crime
would prevent any of the situations imagined by ACIC from being
covered under this legislation.
Analysis Prepared by : Liberty Sanchez / INS. / (916) 319-2086
FN: 0001661