Bill would increase minimum auto insurance liability limits

The Banking, Commerce and Insurance Committee heard testimony Feb. 6 on a bill that would increase minimum liability policy limits for auto insurance in Nebraska.

Current law requires minimum policy limits of $25,000 per person, $50,000 per occurrence and $25,000 for property damage.

LB1003, introduced by Columbus Sen. Paul Schumacher, would increase those limits to $50,000 per person, $100,000 per occurrence and $50,000 for property damage.

Schumacher said the current limits were set in 1998 and have not been adjusted since.

“A simple adjustment for inflation would put [the rates] at double that today,” he said. “This can be looked at as a simple currency adjustment.”

Dan Loring of the Independent Insurance Agents of Nebraska spoke in support of the bill, saying medical costs have “skyrocketed” in recent years and the state’s minimum insurance requirements do not reflect those increases.

LB1003 would increase the cost of a standard policy for two adults with two cars by approximately three percent per year, or $25 dollars, Loring said. Such an increase would not bankrupt the average Nebraska family, he said.

Jim Dobler, representing the Nebraska Insurance Information Service, testified in opposition to the bill.

Individuals who purchase minimal insurance do so because they cannot afford more coverage, he said, adding that increasing the required minimum may result in more uninsured drivers.

“Our concern is that if you raise the minimums, you’ll affect the uninsured motorist population,” Dobler said.

Tad Frazier of the American Insurance Association also opposed the bill, saying it may lead to more drivers purchasing insurance in order to register vehicles and then dropping the coverage because they cannot afford to continue it.

The committee took no immediate action on the bill.