HD36 - Motor Vehicle Liability Insurance and the Insurance Rates of Taxicabs in the Roanoke Area
Executive Summary: In 1898 the first automobile liability insurance policy was issued in the United States in response to the potential economic devastation that could result from an automobile accident. Liability insurance, which provided protection from economic loss which might be suffered by innocent victims of insured motorists, was only a partial solution to the problem because of the existence of uninsured motorists. Realizing the seriousness of the problems arising from the inadequacies of motor vehicle liability insurance, federal and state governments enacted various types of legislation to deal with the problems. Virginia adopted the Motor Vehicle Safety Responsibility Act, a financial responsibility law, in 1944 to keep financially irresponsible motorists who had failed to satisfy judgments against them that resulted from accidents which they caused off of the highways in order to protect innocent persons from further losses. In 1958, it added an uninsured motorist endorsement to the law to address the uninsured motorist situation by shifting the cost of damages caused by an uninsured motorist to himself by requiring motorists to pay an additional $20 ($300 today) for the registration of each uninsured motor vehicle. Many have questioned the effectiveness of Virginia's motor vehicle liability insurance laws in protecting the Commonwealth's citizens from potential losses and injury caused by uninsured motorists and feel they are in serious need of study and reform. Motorists may pay an uninsured motorist fee of $300 in lieu of purchasing insurance and, although the Department of Motor Vehicles has tried to explain to motorists that the payment of this fee does not provide them with any type of insurance coverage, many believe that they are buying "state insurance". In addition, much concern has been expressed and many questions have been raised over the high cost of taxicab liability insurance and the manner in which rates are determined. Currently, no insurer in Virginia will write taxicab insurance therefore most drivers must resort to the assigned risk program for coverage. Taxicab rates in the assigned risk plan have dramatically increased in the past few years as the last two increases effective January I, 1984, and April 1, 1985, were 33 percent and 26 percent respectively. Also, all taxicab drivers are placed in the same assigned risk category regardless of their driving records therefore those with good driving records subsidize those with bad records. A joint subcommittee was established pursuant to House Joint Resolution No. 43 of the 1986 General Assembly to study both the motor vehicle liability insurance laws and the insurance rates for taxicabs because of the concern over each of these issues. |
Menu
Published Documents
