OAI: Mississippi Bill Would Completely Change Auto Insurance System

A new car insurance proposal submitted this week would introduce “tort maintenance coverage” to the Mississippi system.

Online PR News – 17-February-2012 – – Rep. Randy Boyd introduced a bill this week to the Mississippi Legislature that would completely change the way motorists are allowed to comply with the state’s financial responsibility laws, according to Online Auto Insurance.

Instead of requiring drivers to purchase a Mississippi auto insurance policy with liability coverage that pays for other people’s damages caused by the policyholder, the bill would give motorists the option of purchasing personal injury protection (PIP) coverage instead.

PIP covers the policyholder’s own medical costs following an accident, regardless of fault.

In states where PIP is required, motorists who get injured in an accident get paid through their own insurance policy, which is the opposite of the process in states where only liability insurance is required.

Most states that require drivers to get PIP also require them to buy liability coverage. That’s because when a person’s own economic damages exceed the limits of a PIP policy, he or she can usually sue the at-fault party for the remaining damages. In that case, the at-fault driver’s liability policy would kick in and cover the remaining costs.

But instead of requiring drivers to purchase both PIP and bodily injury liability coverage, Rep. Boyd’s bill would allow them to buy one or the other.

That raises the question of what would happen if a person with PIP—which covers only the policyholder’s damages—causes an accident that injures a person who opted to buy only liability coverage—which provides coverage for none of the policyholder’s own damages. Would the liability-only policyholder be left with mounting medical bills to pay out of pocket?

To remedy that situation, Boyd’s bill introduces “tort maintenance coverage.” Under tort maintenance, a driver’s liability policy basically morphs into a PIP policy when the other driver has elected to go the PIP route, so it would provide coverage for the policyholder’s own medical bills in this scenario.

Source: http://billstatus.ls.state.ms.us/2012/pdf/history/HB/HB0530.xml

No other state in the country has implemented such as plan, although a few, including Mississippi, have tried before.

For more on this and other insurance issues, head to http://www.onlineautoinsurance.com/mississippi/ for access to informative resource pages and an easy-to-use rate-comparison generator.

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