Auto Insurance
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To the Editor With unerring aim, Treasury Secretary Nicholas F. Brady managed to miss the heart of the deposit insurance ‘’problem'’ ('’Brady Expects Some New Limits to Be Put on Deposit Insurance,'’ front page, July 26).
To the Editor With unerring aim, Treasury Secretary Nicholas F. Brady managed to miss the heart of the deposit insurance ‘’problem'’ ('’Brady Expects Some New Limits to Be Put on Deposit Insurance,'’ front page, July 26).
Blaming the $100,000 insurance limit for the savings and loan institution debacle is like blaming auto insurance for auto accidents. An excellent parallel would be the argument that mandatory auto insurance puts more funds into the hands of incompetent and crooked insurance companies, who waste the money in bad investments, thus requiring more premium increases to make up for their inept investment practices. Which is why insurance companies are following savings and loans into the financial abyss.
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New Jersey’s Second Crisis In Insurance: Health Costs
As New Jersey Blue Cross and Blue Shield sends out new bills this month, the corporation’s higher premiums pose for many policyholders an insurance crisis that overshadows the state’s long, rancorous auto-insurance problems.
As New Jersey Blue Cross and Blue Shield sends out new bills this month, the corporation’s higher premiums pose for many policyholders an insurance crisis that overshadows the state’s long, rancorous auto-insurance problems.
In Short Hills, the premium for Edwina and John Cuddihy is $6,092 a year, up from $2,800 two years ago. ‘’Our new premium amounts to $117 a week, almost what we spend on food,'’ Mrs. Cuddihy said. ‘’It has reached the point where many middle-class people simply can’t afford it.'’
In North Arlington, Jeanne Pabst, living on Social Security and caring for her 84-year-old mother, has been billed $2,352, up from $476 five years ago. She may have to take a part-time job to pay the premium. ‘’I have to have the coverage at my age to keep them from coming after the one thing I have in case I get sick, my home,'’ she said. #5th Increase in 4 Years Last month the State Insurance Commissioner granted Blue Cross an average 24.6 percent rate increase for individual policyholders, its fifth increase in the last four years. Since the mid-1980’s the nonprofit insurer has said it is threatened by bankruptcy because of rising health-care costs, an aging population, expensive new treatments and the cost of reimbursing hospitals for bad debts. Blue Cross corporations across the country are struggling with many of the same problems.
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Auto Insurance ‘Reform’ Really Isn’t
For most of the last 25 years, New Jersey’s automobile insurance marketplace has been viewed by all observers as problem-filled. The article accurately depicted many of the shortcomings of the latest attempt at automobile ‘’insurance reform,'’ but it didn’t go far enough.
Yes, automobile insurance in New Jersey costs too much. Auto rates are too high because there are too many people (New Jersey is the most densely populated state in the nation) causing too many accidents; because cars and car repair cost too much; because we have a poorly constructed no-fault insurance law; because automobile theft and fraud are running rampant in some parts of our state; because automobiles are not designed to withstand ‘’bumps'’ or fully protect the passengers in crashes, and because we have failed to face these sobering facts for most of the last 20 years. Automobile insurers are part of the problem, but they are primarily the messengers. Continuing the historical pattern of overregulation and anti-competitive legislation will not provide solutions, but may very well slay the messenger.
The legislation just passed is hardly ‘’reform.'’ The principal cause for rate problems in New Jersey is the poor no-fault law. This law is largely unchanged. There is nothing meaningful in the new law about improving the design or crashworthiness or cost to repair automobiles. There is no creation of a statewide antifraud or antitheft bureau. The features suggested to control medical costs will probably result in more out-of-pocket expenses as doctors unwilling to treat patients at the ‘’75th percentile'’ take advantage of the balanced billing option or, in a move that would even be worse, simply refuse to accept automobile insurance cases.
What we do have is adroit gerrymandering of costs - a little here, a little there and, presto, a 20 percent reduction in rates for most. However, aside from the removal of the Joint Underwriting Association surcharge, what real cost reduction has been introduced?
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Florio Takes Office and Calls Auto-Insurance Session
Pledging leadership that is ‘’disciplined, tough, persistent and honest,'’ James Joseph Florio took the oath of office as the 49th governor of New Jersey today and immediately called for a special session of the Legislature next Monday to solve the problem of high automobile insurance rates.
Pledging leadership that is ‘’disciplined, tough, persistent and honest,'’ James Joseph Florio took the oath of office as the 49th governor of New Jersey today and immediately called for a special session of the Legislature next Monday to solve the problem of high automobile insurance rates.
Quick action on the insurance issue, Mr. Florio has said in recent days, is intended as a signal that his administration will lead an aggressive attack on the state’s most vexing troubles. Without giving details in his inaugural speech today, the Governor said he would take on problems affecting the environment, education, drugs and the urban poor.
‘’I want to be remembered as the Governor who brought new ideas to preserve old ideals,'’ he said a few moments after taking office. ‘’If we succeed, we will make sure that we leave our children a state that is better, healthier, cleaner and greener, more prosperous, more full of opportunity than the state we found.'’
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Auto Insurance Bill Speeds Through Trenton
Gov. Jim Florio’s auto insurance reform plan was passed by the State Assembly today and approved by an important Senate committee as well.
Gov. Jim Florio’s auto insurance reform plan was passed by the State Assembly today and approved by an important Senate committee as well.
The plan, which the governor says would save motorists 20 percent on their auto insurance bills by March 1991, now advances to the full State Senate, which has scheduled a vote for Thursday.
The Democrat-controlled Assembly passed the bill, 50-28, after nearly five hours of debate. It had been approved earlier by the Senate Revenue, Finance and Appropriations Committee.
‘’The people of New Jersey have paid too much for too long and have heard too many promises about auto insurance,'’ said Assemblyman Wayne Bryant, a Camden Democrat.
Leading Republicans once again charged that the bill is flawed and was pushed through the process too quickly.
The measure passed largely along party lines, with six Republicans joining 44 Democrats in approving the bill. No Democrats voted against it. The Florio plan would scrap the troubled Joint Underwriting Association pool for high-risk drivers, which is $3.1 billion in debt, and would eliminate by March 1991 a $222 annual per car charge keeping it afloat.
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Pataki Auto Insurance Plan Seeks Ways to Reduce Rates
The Pataki administration proposed wide-ranging changes in New York’s auto insurance rules today, aiming to reduce costs just as the state is poised to earn the unwanted distinction of having the nation’s highest rates.
The plan is the first broad effort by Gov. George E. Pataki to address the high cost of auto insurance. It borrows liberally from Democratic and Republican proposals in the State Legislature, and it met with cautiously positive initial reactions today from the insurance industry, consumer groups and legislators.
The proposals include a number of regulatory and law enforcement steps against insurance fraud, which the industry has blamed for high rates. It does not freeze premiums, a step Democrats and consumer advocates have called for, leaving open the possibility that rates could rise.
But Gregory V. Serio, Mr. Pataki’s new insurance superintendent, insisted that the package of measures would bring rates down, though he would not say when or by how much. ‘’If we don’t act, there’s going to be a rate issue, we’re going to have a rate problem in New York,'’ he said.
Assemblyman Alexander B. Pete Grannis, a Manhattan Democrat and chairman of the Insurance Committee, said, ‘’It looks like the governor has finally come to the table on this issue, and an awful lot of his proposals track what we’ve proposed, so we’re pretty encouraged that there’s room for an agreement here.'’
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New Jersey Warns of Ban On Insurer
State officials told the ITT Hartford Insurance Group today that if one of its subsidiaries wants to cancel its automobile insurance policies in New Jersey, the giant insurer will be barred from doing any business in the state.
State officials told the ITT Hartford Insurance Group today that if one of its subsidiaries wants to cancel its automobile insurance policies in New Jersey, the giant insurer will be barred from doing any business in the state.
The action was the first taken against any of the 32 insurers that have applied to drop their automobile coverage in New Jersey because of laws enacted this year to hold down premiums and eliminate a $3 billion deficit in the Joint Underwriting Association, the state’s insurance pool for high-risk drivers.
In an order delivered by facsimile at noon today, Gov. Jim Florio informed the subsidiary, the Twin City Fire & Casualty Company, that if it canceled its 23,000 auto policies in New Jersey, its parent, ITT Hartford, must also surrender licenses held by nine other subsidiaries to sell home-owner, health and life insurance.
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Auto Insurance And No-Fault Law
The article may give the impression that New Jersey motorists who do not understand the complicated insurance system have been duped into choosing the verbal threshold and giving up a valuable right. The truth is that limitations on the right to sue should have been part of New Jersey’s no-fault law from the beginning. The 1989 changes in the law mentioned in the article were the best the Kean administration could do against a powerful lawyers’ lobby that is loathe to give up its fees from auto injury suits.
What most New Jersey drivers don’t understand is that in a no-fault auto insurance system, all the medical bills resulting from an accident are paid by each driver’s own insurance policy without regard to fault. No insured driver who was not at fault must wait and sue the other party to have his or her medical bills paid.
The trade-off for having all one’s medical bills paid is that the right to sue the other driver for noneconomic loss, i.e., pain and suffering, should be restricted to very serious injuries.
New Jersey’s mandatory auto insurance package provides some of the most comprehensive benefits in the country: unlimited medical expenses; income continuation benefits; essential services benefits and funeral expenses. Since the moment it became law, however, New Jersey’s no-fault system has been perverted by allowing the insured to sue for pain and suffering for almost any accident.
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A Call for Data On Auto Insurance
In a letter to the New Jersey editor on April 22, John A. Karanik laid most of the blame for high auto insurance premiums in New Jersey on automobile design, the high incidence of auto theft and the New Jersey driver. Despite the fact that costs from these sources would primarily fall under comprehensive and collision portions of auto policies (which many motorists have dropped because of the high cost of the legally required liability portion), most insurance industry apologists wheel out these tired arguments.
In a letter to the New Jersey editor on April 22, John A. Karanik laid most of the blame for high auto insurance premiums in New Jersey on automobile design, the high incidence of auto theft and the New Jersey driver. Despite the fact that costs from these sources would primarily fall under comprehensive and collision portions of auto policies (which many motorists have dropped because of the high cost of the legally required liability portion), most insurance industry apologists wheel out these tired arguments.
I believe that it is time for the insurance industry to back up its generalizations with accurate figures. Where is a breakdown of claims paid in relation to insurance premiums?
And when I say claims paid, I don’t mean judgments that would later be reduced or overturned on appeal but remain on insurance companies’ books as losses. I don’t mean loss figures that are ‘’trended'’ and ‘’developed'’ to inflate the carrying cost. I mean checks paid out for losses as compared to premiums received for insurance protection.
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New Law On Auto Insurance Draws Fire
GOV. JIM FLORIO’S sweeping transformation of the state’s automobile insurance regulations is being criticized by industry officials, business and medical professionals and legislators who say the new law is poorly conceived and will ultimately lead to even higher premiums for New Jersey drivers, who already pay some of the highest auto insurance rates in the nation.
GOV. JIM FLORIO’S sweeping transformation of the state’s automobile insurance regulations is being criticized by industry officials, business and medical professionals and legislators who say the new law is poorly conceived and will ultimately lead to even higher premiums for New Jersey drivers, who already pay some of the highest auto insurance rates in the nation.
The new law, the critics say, will perpetuate the practice of good drivers’ subsidizing bad ones, will make it difficult for people in the state’s larger cities to find local insurance agents and will prevent accident victims from obtaining medical care from physicians of their choice.
In addition, the critics say, the new law, which requires insurance companies to shoulder $1.4 billion of the Joint Underwriting Association’s $3.1 billion deficit and insure all the association’s drivers, will make it impossible for the companies to earn a profit in New Jersey. That, they say, may prompt some companies to withdraw from the market, an event some say could have disastrous consequences.
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