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OK Considering No Pay, No Play Auto Insurance Law

Oklahoma is looking to join its neighbor Kansas in passing a “no pay, no play” auto insurance law. This legislation would limit the amount of legal and physical damages that uninsured motorists may sue for or receive after an accident in which they are not at fault. Oklahoma has compulsory auto insurance laws in place.

In a “no pay, no play” auto insurance law situation, drivers that do not have their own auto insurance at the time of an accident can only recover actual property damage repair and medical costs, as well as lost income resulting from that accident. They are prohibited from suing for further non-actual damages, such as punitive and pain and suffering payments. The current Oklahoma law states that any driver, regardless of their insurance status, may sue for pain and suffering,

Oklahoma insurance commissioner John Doak endorsed the legislation publicly last Wednesday, May 18, when the bill passed the state’s senate with a narrow majority of only eight votes. Now it must be reviewed by the Oklahoma state house, and then the Governor will review it. Doak stated that he thinks this new law will nudge uninsured motorists into obtaining the requisite coverage and will assuredly bring legal costs—and hopefully insurance premiums—down. Approximately 25% of Oklahoma drivers were uninsured, according to a poll conducted in 2009.

Several states have already passed “no pay, no play” laws: Louisiana, New Jersey, Michigan, Alaska, Oregon, North Dakota, California, Iowa, and Kansas. Kansas just signed their bill into law effective last week. Minnesota and Montana, like Oklahoma, have legislation which would instate these kinds of laws pending in their state houses currently. Montana’s law may not see the light of day, as it passed the state houses but was vetoed by the governor. It is currently being reviewed for re-submission by state legislators.

Advocates of “no pay, no play” laws argue that by not allowing uninsured drivers to sue for pain and suffering, loss of consortium and emotional distress the cost of auto premiums will go down for all drivers, thus making auto insurance more affordable for those who do not have insurance in the first place. Currently, auto insurers pay out millions of dollars yearly on such lawsuits, and those costs are factored directly into their customers’ premium prices. Additionally, the fact that uninsured drivers are restricted from suing for damages could act as an impetus to purchase the insurance that is mandatory in the first place.

Opponents of “no pay, no play” laws state that the relationship between being insured and the damages suffered by the victim in an accident which is not their fault have no correlation. They say that regardless of whether the victim is insured or not they deserve to be able to sue for punitive damages. Proponents of the law retort that, if the person obeyed the law and not driven while uninsured, they would not be in such a position in the first place.

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