Texas Representative Ruth McClendon laid out her bill permitting mile based rating plans for personal automobile insurance in the House Insurance Committee last week. In 2001, she passed a similar bill providing for a pilot program which expired in 2005. Her current legislation would permanently approve a plan to allow consumers to purchase overage based on how many miles they drive.
The idea stems from limiting the liability of low mileage drivers and giving them
another option when purchasing insurance. For instance, it stands to reason that an elderly driver, who only drives a short distance once a week, would not want to assume all of the risk associated with a standard insurance policy and should be offered a lower premium for their less risky behavior.
Proponents say the diversity in the marketplace would have a positive effect on financial responsibility; however, they cannot point to it diminishing the uninsured motorist problem in Texas. Additionally, many policies already offer a discount or credit for low mileage driving. Opponents argue the bill is really unnecessary and that this product already may be sold under current law without any additional regulation.
The one piece of legislation that literally ground the legislature to a halt last session has initially passed both chambers. Voter ID – a bill that requires voters (except for elderly voters) to show photo identification – has been the subject of a long battle on both sides of the aisle.
Its passage early in the session clears the way for other legislation to proceed to the floor. The bill still faces conference committee, but with the Governor’s public statements of support, it is safe to place this legislation in the win column for Republicans.
Until next week,
Julie Drenner, Texas Director