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Oklahoma: Governor Vetoes No Pay/No Play Bill, Signs Bill Banning Accident Response Fees

Oklahoma insurers saw a split decision last week when Gov. Brad Henry vetoed No Pay/No Play legislation, HB 1021, and later signed HB 2013, which prohibits local governments from charging accident response fees. HB 2013 also requires that insurers, as a condition of doing business in the state, cooperate with the state’s system for online verification of liability coverage.

No Pay/No Play laws are designed to increase compliance with mandatory insurance laws by prohibiting persons who are voluntarily uninsured from collecting non-economic damages such as “pain and suffering” when they file a lawsuit against a person who caused the accident. The uninsured driver is still entitled to collect all economic losses, such as medical bills, damage to the vehicle and lost wages. In addition, the ban on non-economic damages does not apply to members of the uninsured driver’s family who had no role in the decision to flout the law by not obtaining insurance, such as children.

Oklahoma proponents of the law added several protections to the bill with the idea that this would make it harder for the governor to justify a veto. These included an exception for motorists whose coverage had lapsed accidentally as well as a provision that allowed recovery of non-economic damages when the driver of the other vehicle was intoxicated. Despite these efforts, the governor still vetoed the bill.

On a positive note, the governor signed HB 2013 later in the week. This will protect Oklahomans from having to pay a fee for an essential government service, in this case law enforcement they already paid for with their taxes.

These fees are often seen by local governments as a way to collect additional revenues from insurers. They later learn that these fees are not usually covered by the policy, which means the fees merely end up angering citizens and injuring a town’s reputation with visitors without doing as much as was thought to improve the government’s financial picture.

Some local governments initially opposed the ban, saying that it would prevent them from charging a fee for the work done when cleaning up after hazardous materials spills and other extraordinary services. As that was never the intention of the bill’s sponsors, language was crafted that makes it clear the ban only applies to responding to and investigating automobile accidents.

NAMIC members who responded to two alerts made these points to the legislators, who then approved the bill by an overwhelming majority. Oklahoma now joins seven other states – Georgia, Tennessee, Pennsylvania, Indiana, Missouri, Florida, and Arkansas – that protect their citizens from double taxation.

“In politics, you win some and you lose some. The good thing about last week is that consumers and insurers were able to proactively prevent the headache of accident response fees from appearing on the scene in Oklahoma. While we wish the governor would have signed No Pay/No Play, we will be back next year," said Mark Johnson, NAMIC's Midwest state affairs manager. "The bottom line for 2009 is that, when combined with the tort reform bill, the Oklahoma Legislature had a productive year, and the state’s legal climate was enhanced to the benefit of all.”

Direct questions to NAMIC State Affairs Manager Mark Johnston.

Posted: Tuesday, June 02, 2009 12:00:00 AM. Modified: Tuesday, June 09, 2009 2:39:51 PM.

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