Issue: injuries

Motorists are going to be able to operate their cars and trucks on Arizona roads with the same level of liability insurance they had to purchase in 1972.

In one of his final acts of the just-completed legislative session, Gov. Doug Ducey vetoed legislation which would have nearly doubled the amount of coverage necessary to ensure that they can compensate the people drivers injure and the damage they cause.

“I am open to the idea of revising our minimum liability limits,” the governor said in his veto message.

But Ducey also expressed concern that increasing those limits beyond what they were when he was 8 years old – he’s 54 now – would make insurance less affordable for those at the bottom of the income scale. And that, he said, could result in some motorists choosing to drop coverage altogether, even though it’s required under state law and carries a $500 minimum penalty for a first-time violation.

The veto is a major defeat for Sen. Kate Brophy McGee, R-Phoenix, who has waged a multi-year effort to bring the minimum coverage more into line with how costs of everything from medical care to car repairs have changed.

Current law requires motorists to purchase so-called 15/30/10 coverage: $15,000 for injuries to any one person, $30,000 for all injuries from the same mishap, and $10,000 in property damage, usually the other motorist’s vehicle.

During debate on the measure, Brophy McGee said when those limits were enacted in 1972 she believes there was a presumption that they would be adjusted to keep pace with the cost of medical care and even the increasing price of vehicles.

That, however, has not happened, with the insurance industry in opposition amid concerns that the higher premiums will equal fewer people buying coverage.

This year’s measure would have boosted the minimum to $25,000 for injuries to one person, $50,000 for all injuries, and $25,000 for property damage.

Once again the proposal faced opposition from some elements of the industry.

David Childers who lobbies for the Property and Casualty Insurance Association of America, testified during hearings there’s no reason to believe the higher limits are necessary. He cited figures showing that the average liability claim for injuries is about $13,700; for property damage, Childers said the figure is in the $3,000 to $4,000 range.

Brophy McGee, however, said actual figures gathered by the state Department of Transportation put the average actual losses from a motor vehicle accident resulting in death in excess of $1.5 million. For other injuries, she said, the figure approaches $93,000.

And Brophy McGee said the typical property damage done exceeds $11,500 — all more than what motorists need to carry.

But gubernatorial press aide Daniel Scarpinato said that still leaves unaddressed the question of cost.

“What we wouldn’t want to happen is that people’s rates go up for people particularly on the lower end of the economic ladder who are already struggling to get by who might be forced to either not drive or not be able to afford insurance,” he said. “What we wouldn’t want to have is more people on the road uninsured,” Scarpinato said, something that could raise premiums for everyone else who is covered.

That goes to the question of cost.

Attorney Geoff Trachtenberg acknowledged during legislative hearings that the higher limits would raise the premiums by $91 a year for motorists who now buy the minimum. But he said lawmakers should consider the trade-offs.

For example, he said, if at-fault motorists have more insurance, that will enable the health insurance companies of those they injure to recoup some of their costs from the at-fault motorist — or at least that person’s insurer. That includes the Arizona Health Care Cost Containment System which provides health coverage for those earning up to 138 percent of the federal poverty level, about $28,700 for a family of three.

And Trachtenberg said if people have more insurance, that should lower the premiums for underinsured motorist coverage. That is optional insurance that motorists can buy to protect themselves if they are in an accident with someone whose coverage does not cover their full medical costs.
Other bills vetoed Wednesday by Ducey include:

– Mandating the State Historic Preservation Office to allow “supervised volunteers” to determine if property has artifacts and human remains as a method of expediting the ability of ranchers to develop their own property. Ducey said he already has taken steps administratively to improve the process and remains open to anything that addresses the needs of everyone who is affected by historic preservation laws.

– Requiring hearings held by state agencies to use the same rules as judicial proceedings in presenting evidence. The governor said while he wants to reduce regulatory burdens on businesses and individuals he fears this measure would only complicate matters, forcing those in disputes with agencies to have to hire attorneys for what would become a much more formal proceeding.

– Giving Pima County more leeway in getting voter approval of a sports authority district. Ducey said the county already has sufficient authority and he said the law would eliminate “important protections” for voters.

– Providing more latitude for how the Arizona Automobile Theft Authority spends money that it has. The governor said he wants a larger discussion to cut costs and make sure that “more of these dollars go to law enforcement and not to administrative overhead.”

– Repealing a law that prohibits a state employee from becoming a member of the main state pension system before the 27th week of employment. The governor said he feared the change would harm the state budget.

– Allowing the Department of Revenue to adopt a system that collects sales tax at the time a transaction is made. “I am concerned about the unintended consequences this bill could have on private industry,” Ducey wrote.