‘No Pay, No Play’ Legislation Approved in Montana

Check out the article “Montana ‘No Pay, No Play’ Bill Vetoed by Governor” for updated information on this piece of legislation

Montana lawmakers gave the final OK Thursday to limit the recovery rights of uninsured drivers.

If the governor signs SB 111 into law, motorists who lack basic car insurance protection and are involved in an auto accident will be able to sue only for basic economic damages; they would be barred from recovering non-economic damages from an accident, except under certain circumstances.

Justice scalesThat means uninsured drivers could still get compensated for medical treatment and car repairs through the at-fault drivers’ liability coverage. But they could not receive compensation for reasons such as pain and suffering, emotional distress, loss of consortium, humiliation and injury to reputation.

These are the basic provisions of “no pay, no play” statutes that are already in place in a handful of states and are currently being proposed in a handful more.

The reasoning of “no pay, no play” supporters is that motorists who flout compulsory insurance laws should not be able to have the same, full recovery rights as those who follow the law and maintain coverage.

An issue that sparked debate at a Montana Transportation Committee hearing on the proposal brought up the issue, though, of whether uninsured motorists are choosing to go without coverage or are being forced to as a result of bad economic circumstances.

Jim Hunt, a Montana lawyer, says those who drive uninsured would choose not to if they in fact had a choice.

“I have never seen anybody not have automobile insurance who could afford it, ever. Everybody I know who can afford it has it,” Hunt said. “This bill, I do not believe, is going to promote anybody having insurance.”

But Sen. Jon Sonju, the bill’s primary sponsor, said personal economic circumstances do not affect the necessity of complying with state law.

“My heart goes out to those folks that can’t afford insurance, and insurance is high,” Sen. Sonju said . “I think we fight that all the time as a legislative body. But we have [compulsory coverage] laws on the books for a reason.”

Sen. Sonju further characterized driving uninsured as a personal choice. He noted that motorists convicted of DUIs lose their licenses but still find other means to get from place to place, and that uninsured motorists should do the same.

Another issue brought up during the debate was the relative sizes of economic and non-economic damages.

Although the authorities present could not provide a one-size-fits-all answer, Hunt provided his perspective on the typical proportion of damages that are non-economic.

“It depends,” Hunt said. “Unless you have a really catastrophic injury, I’d say it’s less than half. The economic damages are generally more than the non-economic damages.”

Montana SignHe noted that smaller, non-catastrophic claims make up the bulk of filed and paid claims.

The discussion also moved to a clause in the bill that was added while moving through the legislature.

Since many of the bill’s proponents say that “no pay, no play” will help bring more affordable car insurance prices to Montana, a section was added saying that insurers in the state would need to report to the government on the effects of SB 111 on premium rates.

“It’s going to to be real difficult to discern the effect of the passage of this legislation on rates,” said Greg Van Horssen, speaking on behalf of State Farm. He said that so many factors influence the price of coverage that it’d be nearly impossible to quantify the effects of one piece of legislation.

There are exceptions outlined in the bill that allow for uninsured motorists to collect beyond economic damages in some circumstances. Those circumstances include accidents caused intentionally or by a motorist found guilty of reckless driving.

Similar “no pay, no play” statutes are being considered in Minnesota, Tennessee and Oklahoma.

About Ben Zitney
Benjamin Zitney has been covering the auto insurance industry for the past 2.5 years. Before coming to Online Auto Insurance News, he produced an extensive company history of the 30-year-old California Joint Powers Insurance Authority and worked at the Cal State Long Beach Daily Forty-Niner as a reporter, copy editor and news editor.

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