SACRAMENTO, California, February 17 (TNSPol) — Consumer Lawyers California issued the following press release:

The last time the state of california took action to protect drivers from serious financial harm by establishing mandatory auto insurance liability minimums 55 years ago – putting California in the last three states of the nation. In today’s economy, where the cost of medical care and vehicle repairs have increased 40 and 10 times respectively, these minimums do very little to protect victims of traffic accidents.

Today, consumer groups are sounding the alarm – calling on lawmakers to modernize the mandatory minimum penalties offered by auto insurers by passing SB 1107, authored by Senator Bill Dodd (D-Napa), to protect motorists against accidents caused by underinsured or uninsured drivers.

Michel Nye, Co-Chair of the California Alliance for Retired Americans (CARA) Legislative Committeenoted, “California Outdated and woefully inadequate mandatory auto insurance liability minimums leave low-income and even middle-class families – including many retirees and other aging adults – at risk of falling deeply into debt following a serious road accident. Victims shouldn’t be forced to take out thousands of dollars in loans, which often take years to repay, just to cover damage caused by a negligent driver. The responsibility to protect consumers now rests with lawmakers, who must pass strong legislation that compels car insurers to modernize their products to protect 21st century drivers from harm.”

“California have been underinsured for too long and it’s costing them dearly,” Senator Dodd noted. “My bill ensures that accident victims get the financial support they need while covering those who may be responsible for soaring medical costs and property damage. It modernizes our insurance laws, aligning our state on what the rest of the country considers the right amount of coverage.”

“Over the past half-century, the cost of medical care and vehicle repairs have skyrocketed – leaving too many motorists underinsured and unprepared to cover the cost of being victimized by a negligent driver,” said Craig PetersPresident, Consumer Lawyers of California. “Auto insurers cannot continue to offer products that cover this century’s drivers based on last century’s standards. The CAOC is proud to support Senator SB 1107 to modernize mandatory liability minimums and ensure that drivers are fully protected by underinsured motorist coverage.”

The proposed measure would make two important changes to California law:

* In 1967, the legislator set the minimum liability at $15,000 for a simple injury or death; $30,000 for the injury or death of more than one person, and $5,000 for property damage. Under the new law, auto insurers would be required to offer modernized, mandatory minimums of $30,000 / $60,000 / and $25,000 respectively.

*Under current law, auto insurers are not required to reimburse policyholders with underinsured motorist (UIM) coverage for the cost of damages beyond the amount of negligent driver liability coverage. New legislation would ensure that drivers with UIM are fully protected. As usual, the negligent driver’s insurer would provide coverage up to the driver’s liability limit; and the victim’s insurer would now be required to pay the difference up to the UIM limit.

Example: The Ojeda family

California outdated rules put low-income families at risk of significant financial debt, especially when they are involved in an accident caused by an uninsured or underinsured driver.

The Ojeda family is a tragic example: a father and his two daughters were driving near their home in Fresno, when they were struck by an 18-year-old driver at 40 miles per hour. Pulled from the flaming wreckage, doctors discovered the father had suffered a concussion that had caused him to miss five weeks of work. Her 10-year-old daughter suffered burns to her chest and her 5-year-old daughter’s two front teeth were knocked out. The car has been totaled.

The negligent driver was covered by the exceeded mandatory minimum penalties, so the Ojeda family only received $30,000 for their injuries and $5,000 for the total car – but had to take out thousands of loans to cover the full cost of the accident. They are still repaying those loans today.