State drives up cost of auto insurance

BY EMILY LE COZ

Daily Journal



As if high gas prices haven't pushed driving costs up enough, you may be about to see an increase in our your vehicle insurance.



Under new mandatory automobile liability limits, effective Jan. 1, Mississippi motorists must carry limits that include $25,000 for bodily injury or death of one person, $50,000 for bodily injury or death of two or more people, and $25,000 for injury or destruction of others' property.



The move also will affect anyone carrying optional uninsured or underinsured motorist liability at less than the 25/50/25 rate.



Current minimum limits are 10/20/5 - or $10,000 for bodily injury or death of one person, $20,000 for two or more, and $5,000 for injury or destruction of property.



State lawmakers approved the increases this year to protect drivers from out-of-pocket costs associated with inadequate insurance coverage.



For example, if a driver with today's minimum coverage hit a vehicle causing $20,000 in damage, that driver's insurance would pay only $5,000 toward the damages. The driver himself would have to come up with the rest.



If the driver couldn't afford the additional $15,000, the other vehicle's owner would have to use his optional, underinsured motorist coverage. That could cause his own rates to increase.



"I think it's a good idea," said Smithville driver Bill Leech. "Even if I pay more for my insurance, it'd be worth it in the long run. As long as it's not too much more."



More uninsured motorists possible



But some worry that higher premiums actually will boost the number of uninsured motorists because those already struggling to make minimum insurance payments simply will drop their policies.



"There will be a lot more people driving without insurance, and the ones that do have it will be paying for the consequences," speculated Tupelo driver Janet Arthur. "I think it's wrong to change it. You've got senior citizens, and people at my age at 55 who have got other bills to pay. We're not all Donald Trump."



Legislators and the state Insurance Department considered the possibility of more uninsured drivers because of the rate increases, said insurance commissioner George Dale.



"But our argument was that our limits are so low that we needed to raise them," he said.



Mississippi already has one of the nation's highest rate of uninsured motorists with roughly 30 percent driving without coverage.



Individual increases will vary



Policies will not change automatically Jan. 1, Dale said. Instead, people with the current minimum limits will see a change when their policy comes up for renewal.



No one can say exactly how much premiums will increase for the affected policy holders, because rates depend on many factors - driving history, vehicle information, credit rating, for example.



University of Mississippi chair of insurance Larry Cox said some premiums would go up substantially for people paying at minimum level.



Others, like Debbie Shempert of Renasant Insurance in Tupelo, said "it's not a huge increase to go from the current limits to the ones in January."



State Farm spokeswoman Susan Lamey said additional financial burdens for affected policyholders "will be minimal."