The American Property Casualty Insurance Association (APCIA) has called Senate Bill 256 “harmful,” saying auto insurance rates could surge as a result of the legislation.
Commenting after the Senate Committee on Commerce & Labor passed Senate Bill 256 on Friday, APCIA vice president and state government relations counsel Nancy Egan said in a release: “This harmful bill could result in higher auto insurance costs for consumers at a time when many can least afford it.
“Over the past five years, inflation, supply chain issues, and the increasing cost of medical care and auto repairs have resulted in a 36.2% increase in auto insurance rates. Senate Bill 256 could cause auto insurance costs to spike even higher.”
According to APCIA, Senate Bill 256 would encourage litigation when a policyholder seeks coverage from their own carrier due to another motorist’s inadequate coverage.
In APCIA’s view, Senate Bill 256 is bad news, particularly for Virginia residents. It was noted that, as it is, Virginians are already paying more for auto insurance after an increase in minimum limits that was brought about by state legislation in 2021. Additionally, another increase is set for next year.
“When the next increase in minimum limits takes effect in 2025, auto insurance costs will increase for many Virginians, especially those who purchase the lowest levels of coverage and can least afford any more price hikes,” said Egan, whose camp believes Senate Bill 256 is duplicative of existing Virginia law. “Senate Bill 256 could further exacerbate rising auto insurance costs.
“APCIA urges lawmakers to protect Virginians from increasing auto insurance costs by putting a stop to Senate Bill 256.”
The trade body stressed that existing legislation in Virginia already provides remedies for consumers under the Unfair Claims Settlement Practices Law, despite there being only seven instances of unfair claims violations by insurers over a five-year period as per Virginia Bureau of Insurance data.
What do you think about this story? Share your thoughts in the comments below.