One of the first items on the agenda of the incoming Legislature will be compulsory automobile coverage for the U.S. Virgin Islands.
There are many misconceptions about the law and how it affects the people of the territory. A brief explanation of the personal automobile policy and how the proposed legislation will apply is as follows.
The Personal Automobile Policy is basically four different areas of insurance.
The first part provides third-party liability coverage for damage to property of others or bodily injury or death of another person.
The limits of liability are usually split limits. In the case of the proposed legislation, the limits are $10,000 per person/ $20,000 per accident for bodily injury and $10,000 per accident for property damage.
This is the only part of the policy which is addressed in the proposed law.
The rates that the domestic insurance companies currently charge have not changed since 1984. The rates currently charged are in the following range: $277 for St. Thomas, $196 for St. John and $319 for St. Croix. The disparity in rates is due to the frequency or severity of accidents on each island.
The second part of the policy is an optional coverage. When purchased, it provides reimbursement of medical bills for the insured and members of their family that live in the same house, and any passenger in the insured vehicle. The insured and their family are also covered while passengers in someone else's vehicle or as a pedestrian.
The third part of the policy is also an optional coverage. It is called uninsured motorist coverage and it protects the insured and their family members against bodily injury which is caused by an automobile accident with a vehicle that does not have proper insurance and the operator of that vehicle is legally responsible for the accident.
The fourth and final part provides coverage for damage to the insured's vehicle. This section is split into two parts: (1) collision, which covers impact with another car or object. (2) other than collision, which covers basically everything else that happens to the car.
If the whole car is stolen, the company will pay $10 per day for 30 days for a rental car. This payment starts 48 hours after the theft and stops upon recovery of the vehicle or the end of the 30 days.
It is this section that causes all of the confusion regarding the cost of automobile insurance, as the premiums for this section are based upon the value of the vehicle and range anywhere from $400 to $2,479 per car. The wide range is also due to the difference in repair costs on the three islands.
One important thing to remember is the cost of the insurance mandated by the law is less than $1 per day.
If you are involved in an accident, in which you are at fault, then you are personally liable to the other party for the repairs to their car and any injuries that they may sustain.
If you are involved in an accident in which are not at fault and you do not have collision coverage, then you are personally liable for the repairs to your car.
However, with compulsory insurance, the other party's insurance company will pay for the repair to your car.
The insurance industry has hoped that the Legislature would pass a compulsory insurance bill that was acceptable to the industry. The bill that was submitted last session met with the approval of the industry and was basically drafted by them. It was defeated on the floor of the Legislature because most of the senators just did not understand that we are talking a cost of about a $1 a day for most households to insure their vehicles.
As long as the senators understand the true cost of the insurance, they will find that they probably have the support of the automobile owners on their Islands.
Many of the automobile and taxi owners are tired of having to pay to repair their own vehicles. If they happen to have full coverage, then they only have to pay the deductible, but this can range from $250 to $1,000.
If the insurance company sues the other individual and succeeds, then the injured party is able to recoup their deductible. Otherwise, that money is gone.
Repair facilities should also welcome compulsory insurance, as it will mean more business for them and the insurance company will pay them.
Everyone should lobby their senators to get the bill passed.
