SD Lawmakers Repeal Auto Insurance Discount Mandate

Two women in carSouth Dakota seniors may be out of luck if they’re seeking auto insurance discounts for completing safe driver courses, after legislators repealed a state law mandating those price breaks.

Insurers had been required to offer discounts to motorists 55 and older who took accident prevention courses, which are designed to make roadways safer by focusing on age-related issues. But legislation that went into effect July 1 revoked that requirement.

Some of the state’s coverage providers continue to offer the discounts, but many older residents could struggle to find those companies, according to Sam Wilson, associate state director for advocacy with AARP South Dakota.

“That will be the challenge,” Wilson said in a phone interview. “How do I find the company that will reward me for continuing to refresh and update my driving skills as I age?”

Perhaps more importantly, Wilson says the repeal removed a major incentive for many drivers to take part in safety programs, which are offered by AARP and other organizations.

According to state AARP officials, 71 percent of people who took the organization’s course last year said they signed up to take advantage of a discount offered by their agent or coverage provider. And 93 percent of participants reported changing at least one key driving behavior—such as paying greater attention when entering or exiting freeways or checking blind spots more frequently—as a result of the class.

Aging Motorists Can Pose a Greater Risk

According to the Centers for Disease Control and Prevention (CDC), age-related declines in vision and cognitive functioning, along with physical ailments such as arthritis and loss of strength, can affect older drivers’ abilities behind the wheel.

More than 5,500 older adults were killed and another 183,000 were hurt in vehicle crashes in 2008, according to CDC, which says crashes per mile driven increase significantly after age 75.

Safety experts say safe driver programs provide an important service, in part because many seniors consider driving a key part of maintaining their independence, often making it difficult for friends and family members to discuss risks with older motorists.

According to the National Highway Traffic Safety Administration (NHTSA), population changes means there are increasing numbers of older drivers on the road nationwide.

The number of licensed drivers nationwide who were 65 or older increased 20 percent between 1999 and 2008, according to NHTSA. The total number of licensed drivers rose by only 11 percent in that time frame.

Wilson said 15 percent of those 75 and older who participated in the South Dakota AARP program considered stopping or limiting their driving as a result of what they learned in the course.

“That is a very difficult conversation for people to have,” he said, “so we really saw that as a critical outcome.”

Repeal a Result of Lobbying and Government Streamlining

South Dakota law had required insurers to offer premium cuts for three years to eligible motorists who completed a safety course. The law did not specify how great price breaks should be, saying only that they should be “appropriate.” And insurers could deny applicants for causing an accident or being convicted of a moving violation.

Wilson says the law was repealed in part because of lobbying by coverage providers and partly in order to reduce administrative costs associated with oversight of the safe driver courses. That process had been the responsibility of the state Division of Insurance (DOI) since 2003, but officials decided to relieve the division of the obligation by eliminating the legal requirement after a departmental reorganization earlier this year.

“Mandates are not a very popular thing for the insurance industry, and that certainly played a very big role,” Wilson said.

He said state officials had agreed to amend the law to free regulators of their oversight responsibility yet retain the discount requirement, but that proposed amendment was stripped from the bill.

About Gregor McGavin
Gregor McGavin is an award-winning journalist who has reported across the country for such publications as The Associated Press, the Arizona Republic, the Pittsburgh Tribune-Review and the Press-Enterprise.

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