SPONSOR:

Sen. Vaughn

DELAWARE STATE SENATE

142nd GENERAL ASSEMBLY

SENATE AMENDMENT NO. 2

TO

SENATE BILL NO. 166

AMEND Senate Bill No. 166 by striking sections 1 and 2 in their entirety, and by substituting in lieu thereof, the following:

“Section 1. Amend 2118(a)(2)f, of Title 21, Delaware Code by adding the following sentence at the end of the paragraph:

‘Except for motorcycle coverage, no deductible applied to the owner of the vehicle or member of their households for insurance purchased pursuant to 21 Del. C. 2118(a)(2) shall exceed 10% of the amount of insurance purchased for one person. This deductible shall be fully explained in writing to the insured and signed by the insured acknowledging such. An insured person may not plead and introduce into evidence in an action for damages against a tortfeasor the amount of the deductible, however, insurers shall recover any deductible for their insureds or their household members pursuant to subsection (g) of this section.’

Section 2. This Act’s restriction regarding the amount of deductibles shall apply to all policies written or renewed after the effective date of this Act.”

SYNOPSIS

Current Delaware law requires that Delaware insurance consumers purchase auto no-fault insurance (PIP) in a minimum amount of $15,000.00 per person and $30,000.00 for all persons injured in any one accident. Current law permits auto carriers to sell polices with deductibles in unregulated amounts. As a result, some carriers are selling PIP polices with deductibles in the amount of $5,000.00, $10,000.00 or even $15,000.00 in non-motorcycle insurance policies. In many cases, these injured consumers do not understand what they were giving up with these large deductibles. As a result, these consumers are without adequate insurance to pay their medical bills and lost wages. Even if the accident was caused by the fault of another driver, current law does not allow an injured consumer to introduce into evidence their medical bills and/or lost wages that are within the deductible.

The purpose of this bill is to regulate the amount of the deductible that an insurance company can sell to Delaware consumers. The deductible is limited to 10% of the amount of the PIP policy for any one person. Therefore, if a consumer purchases a $15,000.00 PIP policy for one person this law would limit the amount of the deductible to $1,500.00. The deductible would have to be explained in writing to the consumer, which under current law is not required. The deductible would not be paid by the at fault driver’s insurance company except as permitted by subsection (g).

Author: Senator Vaughn