Creating a Fund for Nonmotorists Injured or Killed by Uninsured/Underinsured Motorists

The problem: Nationwide, at least one out of every seven motorists, possibly as many as one in four, does not carry liability insurance. Sources: Insurance Research Council, Uninsured Motorists, 2011 ed. "Estimating the Uninsured Vehicle Rate from the Uninsured Motorist/Bodily Injury Ratio," NAIC Research Quarterly, Vol. V, issue 1 (January 1999) In Oregon, the rate is estimated to be a bit lower, perhaps one in ten, down slightly from a peak in 2008, during the early months of the current recession. In Idaho, the rate is one in twelve, and a handful of states have markedly lower rates. Source: Insurance Research Council news release dated April 21, 2011 In calendar 2010, there were 30,493 persons injured and 317 killed on the roads in Oregon. Of these, there were 772 pedestrians injured and 62 killed, and 877 bicyclists injured and 7 killed. While the numbers of fatalities have been declining in recent years, the numbers of injuries have been rising. Source: Oregon Department of Transportation, "2010 Oregon Motor Vehicle Traffic Crashes Quick Facts," dated July 27, 2011 In 2009, approximately 8.7 percent of American households did not own a private automobile. The figure is considerably higher in urban areas, in lower income ranges, and among households occupying rental properties. The numbers have been rising since the mid-90s. Sources: 2009 National Household Travel Survey http://www.census.gov/prod/cen2000/doc/sf3.pdf The proposal: To create a fund from which nonmotorists who are injured or killed by uninsured or underinsured motorists might recover. There is not at present a market for this kind of insurance coverage as a freestanding product for someone who does not own an automobile. And even if there were, the argument can certainly be made that it would be inequitable to impose the premium expense on nonmotorists, who after all do not participate in creating the risk.

Several states have had mechanisms in place for fifty or more years to compensate the claims. In New Jersey and in New York, the fund is created and managed by liability insurers as a condition of doing business in the state. The Oregon Insurance Guaranty Association, which manages claims against insolvent carriers, has already expressed an interest in managing a similar program in Oregon. We might also look at recruiting funding from traffic court costs, licensing and registration fees, and/or additional charges imposed on SR-22 policies and/or on relicensing after suspension. Other things we might look at: - Increasing the liability coverage minimum. It has been a very long time since $25k could have been considered even marginally adequate. - Increasing penalties for noncompliance. - SR22 should be forever, not just three years. - A thirty-day suspension for multiple moving violations is inadequate. - It should not require three convictions for driving under the influence or driving while suspended or negligent homicide to get a license revoked, and revocation should be for life, not just for five years. Obviously these are for the most part not politically feasible. But we might hold them out as the longer-term ask, in order to make the immediate ask more palatable.