Missouri Lawmakers OK ‘No Pay, No Play’ Car Insurance Bill

Missouri legislators approved a bill Monday requiring uninsured motorists surrender certain rights to monetary compensation when they are involved in a crash.

The bill’s prohibition, called “no pay, no play” in the industry, bars an uninsured motorist from collecting noneconomic damages relating to the crash if the other driver is at fault and insured; noneconomic damages include compensation for pain and suffering.

Under “no pay, no play” laws, the uninsured motorist can still seek compensation for property damage and wage losses, which lie outside the definition of noneconomic damages.
HB 339 passed in its third reading in the Senate by vote of 32-1 after passing the House in late April by a vote of 104-55.

An Insurance Research Council (IRC) study published late last year found that “no pay, no play” laws reduced the number of uninsured motorists by as much as 1.6 percent in states where they are enforced.

The IRC study also examined the financial cost of uninsured motorists in states without “no pay, no play” laws, finding that noneconomic damages insurers paid to insurance-less drivers in those states totaled more than $682 million.

The latest IRC data shows that, in the Cave State, 13.7 percent of drivers lack the Missouri auto insurance required to drive. That rate nearly mirrors the nationwide rate of 13.8 percent and gives Missouri the 18th-highest rate in the U.S.

A legislative analysis on HB 339 released last month showed “no direct fiscal impact” for the state. However, according to the analysis, insurers would see “a cost savings by having an uninsured motorist waive the ability to have a cause of action or otherwise collect for noneconomic loss against a person who is in compliance with financial responsibility laws.”

Under the bill, a motorist lacking insurance would still have the right to any crash damages if the other driver was under the influence at the time or is convicted of involuntary manslaughter or second-degree assault from the collision. Also, passengers in the vehicle of an uninsured driver do not forfeit their rights to compensation.

The Property Casualty Insurers Association of America (PCI) applauded the bill’s passage and pressed Gov. Jay Nixon to sign the measure into law, calling it a “common-sense measure that brings fairness to auto insurance in Missouri.”

“Those who refuse to follow the rules should not be granted the full benefit of those rules,” Ann Weber, vice president for the nationwide trade organization of more than 1,000 insurance companies, said in a statement released Tuesday. “The bill also helps to send a message that the state is cracking down on uninsured motorists.”

Other States Enforce ‘No Pay, No Play’ Laws

Oklahoma was the latest state to enact “no pay, no play” laws in November 2011, joining the 10 states that currently have such enforcement:
–Alaska
–California
–Iowa
–Kansas
–Louisiana
–Michigan
–New Jersey
–North Dakota
–Oklahoma
–Oregon

“No pay, no play” enforcement varies in each state. For example, North Dakota’s laws begin enforcing recovery restrictions after a driver has been convicted at least twice for driving without insurance coverage.

Lawmakers in several states introduced ‘no pay, no play’ legislation this year, though the Missouri bill is the only to reach full ratification in its state Legislature.

In Texas, HB 1774 would introduce “no pay, no play” to the state. Author Rep. Ed Thompson (R-Pearland) filed the bill in February, but it hasn’t seen action since being assigned to the House Judiciary & Civil Jurisprudence Committee.

Oklahoma lawmakers are looking to beef up the “no pay, no play” laws they instituted in 2011 with SB 691, which prevents uninsured motorists from seeking any type of compensation after a crash. The piece of legislation passed the Senate in early March and was recommended for passage by the House Judiciary Committee in early April, but hasn’t seen action since.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for Patch.com and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

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