Opposition emerges to bill offering low-cost auto insurance to poor

By Cy Ryan

Friday, May 6, 2011 | 7:25 p.m.

CARSON CITY — Assemblyman Kelvin Atkinson was caught off guard Friday when new opposition developed to his bill to start a low-cost auto insurance program for people living below poverty level in Clark County.

Atkinson, D-North Las Vegas, said the opposition was sparked by the Republican Party, and he doesn’t know if he has the two-thirds vote to get it passed in the Senate.

Sen. Michael Roberson, R-Las Vegas, said a similar program isn’t working in California “and now you want to bring that failure to Nevada.”

But Sen. Mike Schneider, chairman of the Senate Committee on Commerce, Labor and Energy, said the proposed bill is aimed at helping the working poor.

“I appreciate this bill,” said Schneider, whose committee took testimony on the bill but did not vote.

Atkinson’s bill would provide for auto insurance at reduced cost for those at 250 percent below the poverty level. There was testimony that the program might save an eligible person $184 a year. The state Insurance Division estimated that only 1,000 motorists would sign up for the coverage.

But Joe Guild, representing Farmers Insurance, said the program would reduce the cost on a policy by only about $50.

An estimate by the SAGE Commission put the uninsured motorist population at 19 percent, and Atkinson said that has increased with the downturn in the economy. Many people, he said, have to choose between auto insurance and food and shelter.

Atkinson said there was no opposition in the Assembly, which passed the bill, and he was surprised at the new opposition. He will need a two-thirds vote in the Senate for passage, because the bill requires an extra $1 a year assessment imposed on each vehicle that is now insured.

He said he thinks he can get the bill out of committee on a partisan vote.

Opponents suggested those who can’t afford the insurance should take the bus or ride a bike to work.

Jim DeGraffenreid, an insurance agent and representing the Nevada Republican Party, said a similar program has had little success in California. There were 48,000 enrolled in the program out of an estimated 3.5 million uninsured motorists.

DeGraffenreid said it would cost $800,000 to run the program in Nevada. That would be paid by the $1 a year assessment on each covered vehicle.

Atkinson said he didn’t get the idea from California but from people in his district who are suffering financially. He disputed the projected $800,000 cost.

Current law requires the owner of a motor vehicle to carry a minimum of $15,000 coverage for the injury or death of another person, $30,000 for two or more persons per accident, and $10,000 coverage for property damage.

The bill provides reduced coverage of $10,000 for the injury or death of another person and $20,000 for two or move individuals. Property damage would be covered at $3,000 per accident.

The pilot program would be started only in Clark County. To qualify, a driver would have to earn $20,000 or less a year, be at least 19 years old and have been driving for at least three years.

The individual must not have been involved in more than one accident in the preceding three years and not have more than one demerit point for a moving traffic violation during that period.