Under legislative proposal, thousands of Hawaii drivers would have to buy more insurance
It’s estimated that 3 out of 10 drivers in Hawaii are buying as little coverage as the law allows. A proposal in the Hawaii Legislature would require about a third of the state's drivers to buy more auto insurance, raising the current $20,000 minimum coverage for injuries to $50,000 and up to $75,000 in three years. The proposal also includes increasing the minimum property damage coverage from $10,000 to $20k and then $40k. The cost of this proposal is estimated at around $175-$20 per year. Despite concerns that higher costs could lead to more people driving without coverage, lawmakers doubt this as going uninsured is both illegal and financially risky.
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HONOLULU (HawaiiNewsNow) - A proposal that would force about a third of Hawaii drivers to buy more auto insurance is moving ahead at the state Legislature.
That’s despite concerns that higher costs would force more people to drive without coverage.
It’s estimated that 3 out of 10 drivers in Hawaii are buying as little coverage as the law allows, which puts them at risk of financial disaster if they are in an accident.
The minimum property and injury coverages required by law haven’t changed in nearly 30 years, so they are now far short of what’s needed for even moderately severe accidents, according to Evan Oue, of the Hawaii Association for Justice, an organization of consumer attorneys.
“Especially if there’s an emergency or trauma incidents involved,” Oue said.
“So you know, the current $20,000 in insurance, often pays for just a fraction of the damages caused and and leaves the victim carrying the cost of their injuries.”
“When costs (of an accident) go beyond those minimums, often you’re going to end up with pretty significant bills or in pretty significant legal jeopardy,” Lee said.
House Consumer Protection Chair Mark Nakashima says minimal coverage is also a risk for other drivers who would not be protected if a poorly insured driver is at fault in an accident.
“If they are underinsured or uninsured, then I have to bear the burden of that as well,” he said.
House Bill 1539 proposed raising the current $20,000 minimum coverage for injuries to $50,000 and up to $75,000 in three years.
The minimum property damage coverage would rise from $10,000 to $20,000 and then $40,000.
One estimate of the cost was about $175-$20 added to current premiums per year.
Insurance industry representatives said that might drive more owners into going without coverage.
“It becomes more expensive, and it puts people in the position where they might not be able to buy it at all,” she said.
Matt Tsujimura, of State Farm Insurance, said more uninsured drivers would drive up risk and cost for others. “There will be a larger portion of drivers in Hawaii that will drive around without insurance whatsoever, which will then prohibit recovery from those individuals at all,” he said.
But lawmakers doubt that because going uninsured is both illegal and financially risky. “I don’t think it’s realistic that a ton of people are suddenly going to go without insurance,” Lee said.
Nakashima said people who are gaming the system now, either uninsured or cancelling insurance after they receive their no fault card, will continue to do so.
“I think that those who are law abiding citizens will continue to be the ones that will continue to have make ends meet and find a way to get it done,” Nakashima said.