Georgia Insurance Commissioner says new law may see consumers paying more for car insurance

Published: January 2, 2009

Georgia Insurance Commissioner John Oxendine says Happy New Year: you may end up paying a little more for your car insurance.

Oxendine is concerned about a new law that will offer increased coverage, even though he thinks more coverage is probably a good idea.

The law offers consumers additional coverage in cases where you may get into an accident with someone who’s just carrying minimum coverage. These days, with the higher costs of repairing cars and especially the cost of hospitalization in a serious accident, the minimum coverage required probably won’t be enough to reimburse the driver who is not at fault. The new law would give the consumer his or her full coverage plus whatever the minimum coverage is from the other driver. (In the past, the minimum coverage was subtracted)

And while Oxendine thinks that more coverage is desirable, he believes most consumers will end up getting it by accident. “In my opinion, government should not require people to opt out of something in order to avoid paying more money,“ he told us.

Oxendine says the law is written so that consumers need to send a form back to their insurance company indicating they don’t want the coverage. If they forget to mail the form, Oxendine says they’ll automatically be signed up for the enhanced coverage. “If it were purely an opt “in” for someone who wants more coverage and who wants to pay more money, that’s fine and I support that 100 percent,“ he told me. “But I think it’s bad when government is telling people if you don’t specifically fill out a piece of paper saying you don’t want something, government is going to force you to have it.“

Oxendine says the additional coverage will certainly cause an increase in your premium, maybe not by much, but an increase just the same. “And I think a lot of people will not understand this. Also, generally people do not fill out paperwork to opt out, so most people are going to get stuck with the higher coverage which means more profit for the insurance companies and actually more profit for trail lawyers when they have a suit.“

Oxendine says consumers will be affected when their policies are renewed. He advises that consumers pay close attention to any letters they receive from their insurance companies and to send back the form if they decide they don’t want the additional coverage.