North Carolina's Auto Insurance System Badly Needs an Upgrade
It’s easy to understand why many North Carolinians are skeptical of proposals to change how the state regulates auto insurance. In a state where homeowners insurance rates are fairly high, and auto insurance relatively affordable, the old adage about not fixing what isn’t broken holds a lot of sway.
But scratch the surface just a bit, and the North Carolina system – one in which the insurance industry conspires to set rates and is guaranteed profits by law, good drivers are taxed to subsidize bad ones, and consumers can’t get products and discounts available all across the rest of the country– quickly reveals itself as one that is, in fact, broken. What’s more, the existing system doesn’t deserve the credit it’s been getting for keeping rates low.
Under the current system, auto insurers get together through the North Carolina Rate Bureau to set rates and terms of coverage for standard insurance policies. The insurance commissioner then reviews those rates and terms, and can reject them if he finds they are excessive, insufficient or discriminatory.
bCommercial Auto/b: Owner of Semi-Trailer is not Vicariously Liable b.../b
What definition of “motor vehicle” applies when determining whether the Minnesota motor vehicle vicarious liability law applies? The Minnesota Court of Appeals addressed the issue in late 2009.
By 2005, only eleven states imposed vicarious liability on the owner of motor vehicle (California, Connecticut, Florida, Idaho, Iowa, Maine, Michigan, Minnesota, Nevada, New York and Rhode Island) as did the District of Columbia. Under a vicarious liability law, the vehicle owner becomes legally liable for injuries and damages caused by a permissive driver of the motor vehicle. “[V]icarious liability is the ‘imposition of liability on one person for the actionable conduct of another, based solely on a relationship between the two persons.’” ., 643 N.W.2d 639, 642 -645 (Minn. Ct. App. 2002). (As noted in previous posts to this blog, the motor vehicle vicarious liability statute is pre-empted by the federal Graves Amendment in the context of rented motor vehicles).
The vicarious liability statute only applies to statutorily defined “motor vehicles.” Prior to 2005, when the vicarious liability statute was codified at Minn. Stat. § 170.54 (and was then referred to as the Safety Responsibility Act), the statute did not contain any definition of “motor vehicle” or refer to any other statute which defined the term. In , 493 N.W.2d 602, 605 (Minn.App.1992), the Minnesota Court of Appeals concluded that the definition of motor vehicle found in section 65B.43 of the Minnesota No-Fault Automobile Insurance Act (No-Fault Act), as opposed to the definition found in chapter 169, applied to the vicarious liability statute. By its terms, the No-Fault Act’s section 65B.43 definitions only applied to sections 65B.41 through 65B.71 while the definitions in chapter 169 only applied to statutes within that chapter. Thus, neither definition of “motor vehicle” clearly applied to Minn. Stat. § 170.54. The
“Motor vehicle” means every vehicle, other than a motorcycle or other vehicle with fewer than four wheels, which (a) is required to be registered pursuant to chapter 168, and (b) is designed to be self-propelled by an engine or motor for use primarily upon public roads, highways or streets in the transportation of persons or property, and includes a trailer with one or more wheels, when the trailer is connected to or being towed by a motor vehicle.