Auto Insurance
Pages (29) : « First ... « 1 2 3 4 5 [6] 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 » ... Last »A diverse political group backs choice for auto insurance.
WHAT do Rod Grams, the right-wing Senator from Minnesota who never graduated from college; Mitch McConnell, the Kentucky Republican known for his fire-breathing partisanship; Slade Gorton, the pragmatic, tend-to-the-constituents conservative from the State of Washington; Joseph I. Lieberman, the new-fashioned Democrat from Connecticut, and Daniel Patrick Moynihan, the Senate’s ranking liberal intellectual, have in common? They are co-sponsors of the Auto Choice Reform Act, a bill introduced this week that would allow motorists to give up their right to collect legal damages for ‘’pain and suffering'’ in auto accidents.
Why would this diverse political pack – not to mention Gov. Christine Todd Whitman of New Jersey, Ross Perot, former Gov. Michael S. Dukakis of Massachusetts, Steve Forbes and Mayor Rudolph W. Giuliani – stick their necks out for a cause that lacks support from either Republican or Democratic leaders and draws fire from the trial bar and old bulls of the consumer movement?
One reason is efficiency. ‘’Why should people in car crashes not be able to receive compensation without finding and paying a lawyer, and often suffering through years of litigation?'’ Senator Lieberman asked.
But mostly, it comes down to money. Not lobbyists’ money, but the $45 billion that the Joint Economic Committee of Congress estimates motorists could save each year under the Auto Choice Reform Act if they agreed to waive their rights to sue for pain and suffering.
‘’This beats any middle-class tax cut,'’ suggested Michael Horowitz, director of the Hudson Institute’s Project for Civil Justice Reform, ‘’and wouldn’t raise the budget deficit by a nickel.'’
The average auto insurance premium ran to $757 in 1995, half again more than in 1987. But those who most need compensation rarely get it. A 1991 study by the Rand Corporation’s Institute for Civil Justice found that auto accident victims with damages running from $25,000 to $100,000 on average got back about 50 cents of each dollar lost. Those with losses exceeding $100,000 received compensation of just 9 cents on the dollar.
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Whitman’s Car Insurance Plan Is Stalling
Prospects dimmed this week that Gov. Christine Todd Whitman’s plan for a major overhaul of automobile insurance in New Jersey will be approved by Election Day.
Twice in recent days, the Governor has said she is uncertain about chances of winning legislative approval of her reform plan by November. Since she proposed it in her State of the State speech in January, the plan has received a cool reception from her fellow Republicans, who control both houses of the Legislature.
Yesterday, Mrs. Whitman sought to clarify her position by sending a letter to the Senate President, Donald T. DiFrancesco, and the Assembly Speaker, Jack Collins, saying she remained ‘’firmly committed to achieving comprehensive'’ reform.
Curbing lawsuits over pain and suffering is the cornerstone of her plan to cut auto insurance premiums by 25 percent annually. Two of her four proposed policies would eliminate those suits and a third would reduce them by permitting them only for serious injuries.
The state’s trial lawyers have vehemently opposed the proposed restrictions. The lawyers have apparently won their strongest support in the Assembly.
Governor Whitman’s letter, sent late yesterday afternoon, expressed hope that hearings on her proposal could start in May or June. While she said she believed her plan would survive ‘’largely intact,'’ she seemed to acknowledge the existence of hostility to her efforts to curb lawsuits seeking damages for pain and suffering. She appeared to be clearing the way for future compromises.
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Auto Risk Insurance Being Curbed Here; AUTO INSURANCE RESTRICTED HERE
The market for automobile liability insurance in the New York metropolitan area is tight and getting tighter, underwriters acknowledged yesterday.
Source : select.nytimes.com
If Insurers Don’t Cut Auto Rates, New Jersey Will, Officials Say
The Whitman administration announced today that it would impose a 15 percent reduction in auto insurance rates for policyholders whose insurance companies fail to come up with the promised savings themselves.
Twelve days before lower rates are supposed to take effect, state officials said that an order was issued threatening a state-directed 15 percent reduction because not all insurance companies have shown how they are going to provide their policyholders with the promised savings.
‘’March 22 is rapidly approaching,'’ said Jaynee LaVecchia, Commissioner of the Department of Banking and Insurance. ‘’Barring receipt of a satisfactory filing, this order will provide a fail-safe rate reduction for the policyholders of any recalcitrant insurance company.'’
Insurance industry officials say that Ms. LaVecchia’s order may go beyond the intention of the the new auto insurance law. They say their understanding is that the law requires them to provide an overall 15 percent reduction in auto insurance rates statewide, not a 15 percent reduction in rates for each policyholder.
‘’Our view has always been that the law requires certain reductions for some types of coverage,'’ said John Tiene, executive director of the New Jersey Insurance News Service, an insurance industry trade group. ‘’And the result was an overall reduction in the premiums we collect of about 15 percent or approximately $700 million. Some policyholders would get more, some less.'’
Mr. Tiene said that the insurance industry might take legal action against the Whitman administration’s latest order, which he described as an 11th-hour change. ‘’This is a big problem,'’ he said.
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Courting the Insured: Promises, Promises
With polls showing that at least one third of New Jersey voters identify the state’s high auto insurance rates as their top concern, it is not surprising that both Governor Whitman and her Democratic opponent, state Senator James E. McGreevey, are telling voters what they want to hear, guaranteeing lower rates, if elected this fall.
But can they deliver?
After backing away from her plan last spring to give consumers the option of choosing lower rates in exchange for less coverage, Governor Whitman has revived her proposal. Only this time, she promises that drivers who decide to give up some of their rights to sue for injuries would be guaranteed a reduction in rates, ranging from 5 to 25 percent a year. Under her initial proposal, it would have been up to the insurance companies to voluntarily lower rates to consumers who chose less coverage.
For his part, Mr. McGreevey is offering a 10 percent guaranteed decline in rates without any reduction in coverage. He contends that insurance companies could make up the difference with stronger antifraud measures.
As might be expected, Mr. McGreevey and Mrs. Whitman dismiss each other’s proposals as political pandering, and the insurance industry contends that mandatory rate cuts, without any provisions to give them a fair rate of return, are unconstitutional.
In recent years, several states have rolled back auto insurance rates. Some have succeeded, but not all have been able to beat back court challenges brought by the insurance industry.
Nevada approved a 20 percent reduction in rates in 1989, but the insurance industry won its legal challenges after arguing that the state’s mandate was an unlawful seizure of property. In California, voters approved a ballot measure in 1988, known as Proposition 103, which led to a mandatory 20 percent reduction. The matter is still tied up in the courts, however, with the most recent court decision concluding that insurance companies were entitled to a profit of at least 10 percent. In New Jersey, it is 6 percent.
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GOVERNOR ASSAILS LAWYERS FIGHTING INSURANCE REFORM; Rockefeller Testimony Sharp as Albany Hearings Open on No-Fault Auto Plan SPECIAL INTEREST CITED Speakers on Both Sides Say Hope for Financial Gains Motivates Some Groups Governor Assails Insurance Critics
long, complicated and occasionally contentious hearing on “nofault” auto insurance opened today with some sharp remarks by Governor Rockefeller about the role of lawyers – legislatorlawyers in particular – who are opposed to the idea.
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Compulsory Auto Insurance Sought in Legislative Report; Special Committee Also Urges Companies to Set Up Plan to Compensate Victims of Hit-Run and Stolen-Car Drivers INSURANCE URGED FOR ALL DRIVERS
A special joint legislative committee, with Governor Dewey’s active encouragement, recommended today that all automobile owners in New York State be required to carry liability insurance and that insurance companies be required to set up a plan for compensating innocent victims of hit-and-run accidents, stolen car operators and uninsured out-of-state drivers.
Source : select.nytimes.com
The Only Real Fix for Auto Insurance
Californians are mad as hell about soaring auto insurance rates, and now have done something about it. Ignoring a $60 million advertising effort by the industry, they voted to cut all property and casualty insurance premiums below 1987 levels and to regulate future increases tightly.
Californians are mad as hell about soaring auto insurance rates, and now have done something about it. Ignoring a $60 million advertising effort by the industry, they voted to cut all property and casualty insurance premiums below 1987 levels and to regulate future increases tightly.
The anger notwithstanding, sky-high premiums in the competitive California insurance market reflect sky-high costs, and insurers aren’t about to commit suicide by writing policies at a loss. The only practical way to lower insurance prices in California (and other high-premium states like New Jersey and Massachusetts) is to lower costs. And the only way to lower costs is to create ‘’no-fault'’ compensation systems that make it virtually impossible to sue for personal damages.
Californians have a right to be fed up. The typical auto insurance premium has doubled, to $700, since 1982. In Beverly Hills a 30-year-old male with an Oldsmobile sedan and a spotless driving record pays $2,700 a year, largely because claim losses have been rising explosively. But the remedy the voters chose is a recipe for chaos.
Proposition 103 would give all drivers a 20 percent price break and good drivers another 20 percent on top of that. Premiums would be frozen for a year unless the insurer could show that it was in danger of insolvency. After that, increases could be vetoed by an elected insurance commissioner.
The California Supreme Court has halted enforcement to let insurers appeal the initiative’s constitutionality. No one is sure what will happen if the companies lose their appeal. But there’s not the slightest evidence that the insurance business in California is excessively lucrative or that companies could live for long with deep cuts in premiums. The best guess is that some businesses will leave the state and others will become extraordinarily fussy about whom they insure and for how much. Most drivers will end up in the ‘’assigned risk'’ pool, paying exorbitant rates.
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Auto Insurance And the Free Market
Jim Courter’s Opinion page article, ‘’Auto Insurance: A Better Way,'’ on Aug. 14:
Re: Jim Courter’s Opinion page article, ‘’Auto Insurance: A Better Way,'’ on Aug. 14:
In his proposed solution to the auto insurance fiasco in New Jersey, Representative Courter offers a windfall to the insurance industry, which he incredibly serves up as a model of economic efficiency.
To be sure, Representative Courter recites the Republican mantra of laissez-faire, dutifully repeating the necessary words and phrases. In fact, the terms ‘’free market,'’ ‘’open market,'’ ‘’competition'’ and ‘’competitiveness'’ are utilized no fewer than half a dozen times.
However, his principal proposals, the elimination of both ‘’unrealistic profit margins'’ and the ‘’myriad of laws and regulations'’ promulgated in Trenton, are totally inconsistent with the principles of the free market, because they leave out the indispensable policy change, repeal of the insurance industry’s Federal antitrust exemption.
Representative Courter’s proposals are anticompetitive because, under Federal law (the McCarran-Ferguson Act), insurance companies are exempt from the major provision of our country’s antitrust laws. In an attempt to mitigate the anticompetitive effects of this exemption, Federal law permits the states to regulate the rates and profits of the insurance industry.
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Politics; Auto-Insurance Resolution Sought
PRESSURE on the pocketbook, the type both the public and elected officials respond to, began building last week behind the need to change the state’s automobile insurance system.
PRESSURE on the pocketbook, the type both the public and elected officials respond to, began building last week behind the need to change the state’s automobile insurance system.
The problems built into the system during the last major change in 1983 have come home with such force that they threaten to bankrupt the state-operated insurance association the previous law created.
The association’s projected deficit ranges from $900 million to $1.5 billion, and to cover it every motorist will have to pay higher premiums, surcharges and fees on top of what New Jersey officials say are already the highest premiums in the country.
The Senate minority leader, James R. Hurley, Republican of Millville, said the increase on an average $700 annual premium was expected to be $150.
‘’The motorists of this state have been burned for too long with excessive insurance rates and there appears to be no relief in sight under the current system,'’ Mr. Hurley said. ‘’Things just continue to get worse.'’ Insurance is mandatory in New Jersey, but because of the high premiums, about 500,000 motorists drive without it. Mr. Hurley said the latest premium increases would lead more drivers to drop their coverage.
When the law was changed five years ago the state created the New Jersey Autombile Full Insurance Underwriting Association, commonly called JUA, to replace the old assigned-risk pool. It was designed to perform the same function - provide coverage for motorists who could not get it on the voluntary market.
The pool was designed to serve motorists with bad driving records, but insurance companies refused to write insurance even for motorists with perfect records, so the assigned-risk pool became the state’s largest insurer, serving 1.5 million of the state’s 4 million motorists by 1983.
Although JUA is constituted differently it still serves motorists turned away by private insurance companies and now covers more than two million motorists. The New Jersey Insurance News Service, an industry information agency, said JUA would be the country’s fourth-largest auto-insurance carrier if it were a private company.
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