The controversial Senate Bill 276 which passed late in the 2008 legislative session has now been signed into law by Gov. Sonny Perdue.  For months now, the Georgia insurance commissioner, John Oxendine, has been against the bill because of his worries relating to the part of SB 276 that will allow insurance companies to change their rates without his approval.  Oxendine's office has given prior approval to car insurance companies for over 15 years, which means companies must set their rates with the approval of his office. But Senate Bill 276 gets rid of the approval process altogether.

SB 276 began its life in the 2007 session as an effort by Sen. Cecil Staton (R-Macon) to "stack" so-called uninsured motorist policies.  Before SB 276, if the at fault driver had $25,000 in liability coverage and the victim only had $25,000 in uninsured/underinsured motorist (UM) coverage, the victim would not get the benefit of his UM coverage.  With stacking, assuming that the case was worth $50,000, the victim would now be able to recover $25,000 from the at fault driver and $25,000 from his/her own UM insurance carrier.

The new law will now allow those coverages to stack but only if the consumer chooses  the stacking option.  The consumer can choose the coverage that they currently have where the coverage doesn't stack, or the consumer could choose expanded coverage where they will stack to give that additional protection, or the third option is not to have UM coverage at all.

According to Bill Clark, Chief Lobbyist for the Georgia Trial Lawyers Association, "The states that have adopted a free market system for insurance ratings have seen significant reductions in premiums for their citizens."   He said consumers will now have the benefit of a free market system. He also said that the more than 250 car insurance companies that sell in Georgia must now compete with each other to win a driver's business.  In the final analysis, we will all have to wait and see who was correct about whether the insurance rates will go up across the board or not.

In my opinion, I think that those who choose the stacking option will pay more for UM coverage, but they are getting more coverage than before.  The sad reality is that insurance companies and their agents will likely not fully explain these options to  consumers who will be left in the dark about how important UM coverage is, especially UM coverage that stacks on top of the at fault driver's liability coverage.

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