BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 2589
                                                                  Page  1

          Date of Hearing:   May 16, 2012

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                  AB 2589 (Bradford) - As Amended:  April 30, 2012 

          Policy Committee:                              InsuranceVote:12 
          - 0 

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  

          This bill requires the California Research Bureau (CRB) to 
          conduct a survey comparing key provisions of California's 
          underinsured motorist (UIM) coverage laws with the laws of other 
          states and requires CRB to report its findings to the 
          Legislature by December 31, 2013. 

          FISCAL EFFECT  

          1)A report of this nature would likely cost the CRB between 
            $25,000 and $50,000.

          2)Minor and absorbable costs for the California Department of 
            Insurance to collaborate with CRB on the report. 

           COMMENTS  

           1)Purpose  . According to the author, who has been pursuing 
            changes to the way UIM works in California, this bill will 
            help develop additional information about how this coverage 
            works in other states where consumers may have access to 
            better coverage.  Having this information will allow the 
            Legislature to make informed policy decisions regarding any 
            necessary changes to UIM laws.

           2)Underinsured Motorist Coverage  . California law requires that 
            motorists have automobile insurance. The bare minimum 
            insurance limits allowed by law are $15,000 per person per 
            accident, to a total of $30,000 per accident (regardless of 
            the number of persons injured and the total amount of their 
            damages), and property damage coverage of at least $5,000. 








                                                                  AB 2589
                                                                  Page  2


            An underinsured motorist is someone who has at least the bare 
            minimum of coverage as required by law, but the limits of 
            their policy is insufficient to pay for all of the damaged 
            caused by the accident. Underinsured motorist insurance 
            coverage is coverage you buy from your own insurance company. 
            It pays for bodily injury losses to you and your passengers if 
            you get into an accident caused by a driver who has insurance 
            but the limits are insufficient to cover all of the injuries 
            and damages. California law does not require that you have 
            underinsured coverage.


           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916) 
          319-2081