Carl Perry just dropped a bill, House Bill 1083, which modifies the amounts required for proof of financial responsibility for the future for motor vehicles. In reading it, I can’t help but wonder if he bothered to discuss his master plan with anyone in the insurance industry. Because it seems … well, dumb for a few reasons. The bill is as follows:
An Act to modify the amounts required for proof of financial responsibility for the future for motor vehicles.
Be it enacted by the Legislature of the State of South Dakota:
Section 1. That § 32-35-2 be AMENDED:
32-35-2. The term, proof of financial responsibility for the future, as used in this chapter, means proof of ability to respond in damages for liability, on account of accidents occurring after the effective date of the proof, arising out of the ownership, maintenance, or use of a vehicle of a type subject to registration under the laws of this state, in the
amount of twenty‑fivefollowing amounts:(1) Seventy-five thousand dollars because of bodily injury to or death of one person in any one accident;
(2) Subject to the limit for one person, in the amount of
fiftyseventy-five thousand dollars because of bodily injury to or death of two or more persons in any one accident; and(3)
in the amount oftwenty‑fiveSeventy-five thousand dollars because of injury to or destruction of property of others in any one accident.
Wherever used in this chapter, the terms, proof of financial responsibility, or, proof,are synonymous withhave the same meaning as given to the term, proof of financial responsibility for the future.
The first thing that jumped out to me was the limit.. Seventy-five? During my years as an SD Division of Insurance employee, and throughout my time (now six-years) as a property insurance claims manager, I have never seen a policy with 75/75 limits. It’s a weird amount, and nobody currently writes it. Everyone has policies with $25,000/$50,000 limits (25/50 for short.) 50/100 limits, and 100/300. No one out there has 75/75. Which means that every company offering covering auto insurance in the state will now have to draw up and file new rates and forms. Every company. Could they even get those filed and approved with the DOI by July 1?
The Bodily Injury/Death limit for two or more people is capped at 75K, the same limit as one person. This is just poorly drafted, and makes even less sense. If insurance coverage for one person for “bodily injury to or death of one person” was inadequate at 25k, so we needed to raise it to 75k, why would we have the same limit for two or more people at 75k.. which is $37.5k each. If we would have to have such a drastic increase from $25k to $75k for one person, why is the multiple-person coverage increase from the $25k each that’s currently in existing law just a pittance? It’s a proposal designed for for single passenger injury accidents, but not so great for anyone driving with anyone in their car.
If we continue to have problems with uninsured motorists at 25/50 coverage, what is tripling the amount of coverage (along with a significant increase of cost) going to do? Obviously, make it more expensive, so even more people decide to skip the coverage. And here’s the figure to look at, because South Dakota actually doesn’t do a bad job here.
According to the Insurance Research Council, in 2019, South Dakota had 7.4% of our motorists estimated to be uninsured, placing us at a rank of of being the 41st in the nation for uninsured drivers. According to this study, on a percentage basis, we are in the top ten of the least uninsured drivers at this time. Why would we want to put insurance farther out of reach?
Even worse, what does this bill propose to do to us? Perry’s bill to take South Dakota to 75/75/75 would actually move our minimum liability limits to being the highest in the country. Higher than California (15/30). Higher than Massachusetts (20/40). Higher than Texas (30/60). And even higher for one-person accidents than Alaska (50/100). You can review the chart of state minimums (current as of 10/22) here.
Sorry, but House Bill 1083 is just an awful idea. The only things that this measure would do would be to raise rates for all consumers, make it tougher to get insurance, and actually raise the number of uninsured motorists in the state.
As an old insurance agent once told me, if we could legislate responsibility, then we would have no drunk drivers, unintended pregnancies, or need for a Division of Child Support.
But legislators seem to think they can do so with auto insurance, so here we are.
I agree the 75/75 limits is a strange amount. But $25k for vehicle liability is barely anything these days. SDCL 32-35-2 was last amended in 1985. I didn’t go through the session laws to confirm whether the 25/50 limits were changed in 1985 or not, but let’s give the benefit of the doubt and assume they were. $25k in 1985 is equivalent to about $70k today, adjusted for inflation. So HB1083’s proposed $75k is pretty close to the limits set in 1985, again adjusting for inflation. Perhaps a good amendment to the bill would be to require 50/100 limits, which is a much more common policy.
Edit: I ended up looking up the session laws. They did, in fact, increase the limits to 25/50 in 1985. Prior to that, the most recent update was in 1970 when they increased the limits to 15/30. So from 1970 to 1985, the required limits were 15/30. From 1985 to present (38 years!), the limits have been 25/50.
For an added point of reference, $15k in 1970 is equivalent to about $117k today, adjusted for inflation.
To be clear, I’m not in the insurance industry and have no skin in the insurance game. I’m just a neutral observer that happens to drive a vehicle in the state.
If we raise it, we will have more uninsured people on the road, and there will be a greater opportunity to have an accident with someone who has no insurance. We’re in line with most states on a national basis, yet, we’re doing better than 40 of them. Not sure why we need to screw it up.
“Not sure why we need to screw it up.”
Because we can!
The Insurance Industry is already as scam as it is, forcing people to buy insurance is not a free society, in an economy where people can barely afford their rent, now is not the time to increase liability INsurance premiums are not only hurting private people, they are HURTING Small Businesses, let alone used car dealerships with the high premiums. THis will almost KILL our economy. Leave as is, remove the mandate and requirement to have insurance, and the rates will go down over night. GOVT forcing you to have insurance is the scam.
Mike, you’re funny.
There is always the option to self-insure, even for auto. The provision is in law.
And let me know how that works out for you as a businessowner or after you get in an accident. Insurance is people pooling their risk. If you want to assume all the risk on your own (especially attorney fees), knock yourself out.
Insurance is paying negotiating hit men to drive down settlement amounts to under-pay automobile technicians while they waive their hands about how important it is they work so hard to hunt down fraudsters.
Meanwhile, back at the ranch, the real fraudsters are throwing a party and laughing:
https://wallethub.com/answers/cc/wells-fargo-credit-card-scam-2140696032/
Pat, I understand all that. I just do not think it is a wise idea to increase the mandates to force people to pay more in premiums when so many are already struggling man. I understand how the self insure works, and I understand the reasons why you should should be recommended to have insurance. I am NOT against having insurance, buddy. I am against Government Mandates, for any reason. Its a scam, insurance companies have used government to get rich, and take advantage of people. Govt should not force anyone to do anything. I am not disagreeing with you.
If you get into a wreck with a semi, you would want to be covered fully for a large amount. I have high coverage from a personal experience.
I get into a wreck with a semi, I would be dead, who cares.
Mike! I made my post below before I read this .. I think we may be ideological corsican brothers!
People that cannot afford rent and exactly the people that should have insurance. And you DO NOT have to buy insurance if you DO NOT own a car…so its not mandated.
Insurance makes my list of the top 3 worst products/scams ever created (if you’re in insurance, I’m not pointing this at you personally, rather your monumentally corrupt and stupid profession).
1 – credit cards
2 – insurance
3 – pet rock
I say this knowing that many in SD made their money from two of these three worse products ever.
Why do I think insurance is stupid?
It preys upon the fearful and its mascot is Chicken Little.
Given how we’ve demonstrated we can work together without the *cough* elite when it comes to currency (BTC), why could we not also work together to pay our accident bill at the end of the year from a common insurance pool? Why are we paying a premium to allay fear of something that hasn’t happened? The reason is simple in my opinion; corruption.
Insurance companies allow companies with bad products to continue making money even though they should fail because of negligence or incompetence (TARRP).
There is some interesting statistical math involved in insurance, and there are a lot of truly good people who work in this “industry” that doesn’t make transportation, housing, food, or clothing. I in my opinion insurance profits are an economy’s way of flushing cash money down a crap hole where it is scooped up by people who probably didn’t earn it (investors and executives in insurance are most overpaid).
As I said to Mike, you can always self-insure. No law against it.
Pat is correct, we can always self insure, but as a State, it also placed to many mandates, and has made it to difficult for the little people to do. Depending on what you are insuring, land, business, vehicle, healthcare, etc. I get what Pat is saying, but, we need government out of our life period. I have seen my friends in the dealership go out of business cause the premiums are so high, they cant afford them. Small Businesses are struggling as it is, all these laws are being designed for the large Multi National Corporations, and our small mom and pop stores cant compete due to the costs involved, NO ONE should be forced to be insured or self insured period. It is all a choice in life. IF we get sued, we live and work around it to settle a dispute.
Insurance has become nothing more than Predatory, Auto Owners charged me $500 per month, and later on I found insurance for $85 per month…For a small business owner, that is a night and day difference.
Pat, you are speaking from a privileged point of view, I do not know if you ever struggled or not, perhaps you have, but you need to think of those who are working their tails off to keep their doors open. Every law we make that effects a business owner, is one more law ‘we’ have to comply with.
Since COVID, which is another hoax, just a reason for the State(s) to take more federal funds, then trap us all in that federal system of debt slavery, I have seen 10 dealerships close their doors cause the cost to keep their doors open is to great. I have saw many of my restaurant friends closie their doors as well. Sad.
STOP with all the mandates. IF people do NOT want insurance, stop forcing them.
Isn’t it logical that since the advent of insurance, a product *cough* mandated by the government, our collective driving skills have reduced?
Good points the bill needs to be amended, but not tossed out. $25k is way too low given that a reasonable car like a 2019 ford fusion goes for about $20k.
If we’re concerned that less people will be insured, then make people show proof of insurance when renewing license plates. Or if people cannot afford it, then maybe its time to invest in public transit beyond just adding more roads for those that can afford their own vehicles. At any price point someone is going to make the decision that insurance isn’t worth it, we can either try to address the issues or stick our heads in the sand.
That is UNCONSTITUTIONAL PERIOD
$25k is far too low. Any serious accident or one with injury is going to be far exceeding that amount. We need to fix the uninsured problem, not pretend it’s not as bad because we have lower rates. People need to provide proof of insurance in order to get registration.
“People need to provide proof of insurance in order to get registration.”
In states where they do require it, there are always those who pay monthly and let it drop it afterwards.
That would definitely be an issue but I think it would at least damper the issue. Less than 8% has to be a lie, I think it’s closer to 50%. My family has had a string of accidents lately 5 people, 3 uninsured.
NO reason to force people to have insurance, STOP mandating this crap.
Settle your disputes in a court of law.. enough said.
Let’s be real, these legislators don’t talk to anyone before introducing legislation. They introduce it to address problems that only exist as grievances on political talk shows. Once it is introduced industry lobbyists have to be paid to fight the bad legislation. This type of crap which as been going on since Daugaard is anti-small business, why should so many of us have to have a budget to pay SD Lobbyists just to leave our industry alone. These same type of legislators talk about “small government”, but when it comes to letting the industry regulate itself over government, we can’t have that, they always try to insert themselves, because they know best.
I guess I’d rather be hit by someone with low limits than with no insurance at all. The people who need insurance the most (i.e. drivers with bad driving records) are typically the ones with the lowest limits. I used to work as an auto adjuster, and always had to laugh when people would say, “I can’t believe you insure that guy!” as if their having no insurance was a better option.
I wonder if a stronger driver’s education curriculum would have an impact on insurance rates.
Most insurers give a discount for kids who have gone to driver’s ed.
That is a BRIBE, enough said Come on man, the Insurance Lobby is the biggest lobby in South Dakota in most states, they write 90% of the Motor Vehicle Code, then use it against the people to avoid Paying out the damages. Its a scam.
ANY Mandate is UNconstitutional, and harms Small Business. STOP it man.
So encouraging the education of drivers is a bribe?
Give Carl a break, he just likes to sign on to lots of bills.
He’s the prime sponsor! It’s not personal, but it’s a bad bill. (As detailed)
Carl, you have done your service to South Dakota and we appreciate it. Its now time to let the adults in the room have the floor and work on stuff that actually matters for South Dakotans.
Insurance is a product, should not be mandated on anyone. You should have the right to buy it or not buy it, However, by not having insurance subjects you to the full extent of any damages of which you cause while driving on a public road.
Mandates are Unconstitutional, and should be discouraged, and stopped. Even Minimum Wage mandates on Businesses should be stopped.
An Insurance Mandate, whether related to Healthcare, Commercial, Auto, Home, Flood, is all a “TAX” imposed on the citizens or residents of this State, and a driving force in hurting the people who cant afford to pay rent, utilities, buy food, etc.
IT is ironic, that we are discussing removing Sales Tax on food, however, we are now discussing raising Insurance requirements on the very people who cant survive. All this will do is force more people to drive without insurance, placing many people who get caught, on SS-24 Mandates – Penalty, which now raises their costs even more.
Look man, as a dealership, I paid $500 a month for commercial insurance they forced me to pay $1,000,000 minimum liability plus more b.s items, even Terriorist Covereage, wtf. I later found insurance for the state minimum 300,000 @ $85 per month and I got rid of all tose extra charges..Insurance is just as Predatory as Pay Day Loans.
IF you are going to mandate that people have insurance, then perhaps the State should provide for a very minimum coverage, allowing the PEOPLE to pay directly to the State DMV each month @ $30/month, or $75 for Small Used Car Dealers Per Month. Let the State become the Insurer wihich they are responsible for.
I agree, this is a very badly written bill, I do not beleive its personal, but the bills sponsor is acting in favor of his District, so find out why the people in his district want this bill. They must have an influx of claims in that county or district..
IF the State wants to get involved in the insurance business, then provide to the people a low cost Policy to those who cant afford to get insurance, or the insurance companies refuse to accept them..
Oops, the State does NOT want to get in the middle, cause it is profitting off TAXES made off the Private Insurance Companies, so this is fascism at best.
I bet you anything the INSURANCE COMPANIES are begging to force people into this 75/75 situation cause they are losing money due to the economy, I question their motive here.
NO ONE should be forced to buy insurance if they choose not to, If they hit yuo, you take them to court like a REAL MAN…IF you win, they owe you, if the court decides its a 50-50 issue, then no one owes you a dime.
So he is following the governor’s example of not talking to people forst—- gun range, camp ground etc