Mo. Gov. Says Auto Insurers Should Avoid Surcharging, Denying Coverage to Returning Soldiers

Gov. Bob Holden has urged Missouri’s auto insurers to avoid surcharging or denying coverage to soldiers who return from active duty unless their driving records or other criteria justify that decision.

Auto insurers commonly classify drivers as “high risk” -and charge higher rates or turn down applications – if they have not maintained continuous insurance coverage on their autos and are seeking a new policy. Such interruptions in coverage usually accompany losses of driving privileges for moving violations.

In 2001, Sen. Doyle Childers of Reeds Spring sponsored and Holden signed Senate Bill 151, which prohibits such actions against soldiers who have not been driving because of active military service – but only in narrow circumstances.

“We are urging insurers to follow the spirit of the law – and act as good corporate citizens – by waiving any requirements on continuous coverage for soldiers returning to civilian life. Many of these soldiers simply stored their cars and cancelled their policies when they began full-time tours of duty to Afghanistan, Iraq and other sites in the U.S. or overseas,” Holden said.

“If soldiers face these surcharges or refusals of coverage, they or their agents should contact Missouri Department of Insurance immediately for assistance. The department plans to work with these insurers to ease the return of these men and women from military duty.”

Scott Lakin, the insurance department director, said SB 151 generally protects soldiers against higher premiums if the insurer uses separate corporate subsidiaries for covering substandard drivers. However, the legislature removed provisions that would have prohibited higher premiums within the same company if coverage is not continuous.

Childers said he introduced his legislation in anticipation of just such an event as the impending return of tens of thousands of American soldiers from Iraq, which has already begun.

He added that he hopes insurers will implement the original intent of his bill. “I had hoped to provide this protection against higher premiums to all personnel leaving active duty,” he said. “We owe no less to those Americans who have given selflessly of their time and risked their lives in many cases for their country.”

North Dakota already has reportedly noted problems with the continuous-coverage requirements, although Missouri has received no complaints so far. The National Association of Professional Insurance Agents is asking all states to seek waivers on these requirements from auto insurers.