The legislation’s adjustments to liability insurance amounts are expected to enhance consumer protection by ensuring that adequate coverage is available in the event of accidents. This will not only apply to personal vehicles but also to commercial vehicles used for transporting passengers. By ensuring higher coverage amounts, the bill aims to reduce the financial burden on victims of motor vehicle accidents and foster more responsible driving behavior among vehicle owners.
Assembly Bill 1140, which was recently approved by the Governor of California, serves to amend and revise various provisions within the California Insurance Code and other related statutes. Notably, it establishes new minimum liability insurance coverage amounts for motor vehicles, which will increase from the current levels of $15,000 for bodily injury or death of a single person to $30,000, and for all persons from $30,000 to $60,000 starting January 1, 2025. The bill also includes a further increase planned for January 1, 2035, with specified amounts subject to policies issued or renewed from those dates forward.
The sentiment regarding AB 1140 is primarily positive among consumer advocacy groups, who view the increase in liability insurance as a necessary step towards enhancing public safety and providing better support for accident victims. Nevertheless, there may be concerns from insurers about the impact on premium costs which could potentially translate into higher prices for consumers. Furthermore, discussions around the bill also reflected broader debates about consumer rights and insurance industry regulations.
While AB 1140 largely received bipartisan support, some members raised concerns regarding the potential for increased insurance premiums as a consequence of the required coverage limits. The bill’s provisions regarding premium rate increases were also noted, which prohibit cumulative increases from exceeding 40% over a three-year period. This could create a balancing act for insurers looking to stay profitable while meeting these new requirements. The legislation aims to protect consumers from steep premium spikes while ensuring a stable insurance market.