Tort Versus No-Fault Reform Paradigm Is False Choice, Paper Says

October 4, 2006

  • October 4, 2006 at 12:56 pm
    wudchuck says:
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    here we go again!! when will anyone take responsibility for an accident? the purpose of insurance is to protect you and your assests to cover someone else\’s injury or property when your at-fault or the other folks don\’t have insurance. the fact the claim that 16 states have no-fault insurance is a delusion of the eyes. i work the industry and hold licenses in many states. there is only 1 true state with no fault insurance. every other state is actually have a fault of insurance somewhere. the part that is not described is that most states they are talking about have what is called personal injury protection but that is a limited amount as well, and if exceeded that party at fault is reponsible. we need to simply put that every driver with a license needs to have insurance, exactly like it is in North Carolina. You have to have proof of insurance just to get a learners permit. key: taking on the responsiblity that i caused that accident and i am going to make restitution.

  • October 4, 2006 at 1:57 am
    sam says:
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    Wudchuck, you seem to be missing the point of the article. The article talks about different ways to reduce the costs of insurance, not that no-fault is better than or worse than a tort-based system. Many of the suggestions in the article make good sense, as does the requirement to carry insurance.

  • October 4, 2006 at 3:16 am
    WB says:
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    I am a licensed agent in a no-fault state. The suggestion at the end of the article about allowing consumers in no-fault states to choose between a no-fault state rule and pure no fault for a premium reduction does present a new challenge for agents in presenting the options clearly and documenting that the consumer thoroughly understands what they are giving up for the premium reduction. At the time of a large loss, this could be an important issue.

    In addition, I believe in value. Getting more for your money is a good thing – and paying a little more to get more is good. We have one of the best no-fault laws around, but simply need to curb the outlandish abuses – which happen infrequently – but drives up costs significantly.

  • October 4, 2006 at 4:18 am
    BW says:
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    I live in Colorado. Colorado was a no fault state, now it is not. The idea the politicians sold the public on was that premiums would drop when we made the switch. They did not! Insurance companies simply moved the premium from one coverage within the policy to another. Just like with medical insurance, if you want true reform, and cost savings, limit lawsuits, and cap what attorneys can make by bringing them. Then the rest of this is mute.

  • October 5, 2006 at 8:06 am
    anthony bonadies says:
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    I\’m surprised that the study didn\’t include the high delivery cost on the insurance side. I\’ve seen too many insurance executives spending their time playing golf on company- owned country club memberships, fully catered and plenty of free balls for the water holes, not to mention their seven figure salaries

  • October 5, 2006 at 9:16 am
    anon says:
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    I\’m surprised there was little mention of fraud.

    I\’m a product manager of a florida auto program (no fault), and we see a lot of fraud cases.

    PIP is a good idea, in theory, but in practice it has proven very difficult to administer without massive fraud emerging.

    If a state wishes to use anything resembling PIP they need to make very strong laws against fraud and devote significant resources to fighting fraud. All too often, insurance departments are just as obsessed with answering consumer complaints as they are with fraud. This can lead to a situation where a company feels it is handcuffed and unable to combat fraud for fear that their investigations will end up as complaints at the DOI.

    The only way PIP could possibly work is if the penalties for fraud were very severe, and DOI fraud teams were very responsive to \”tips\” from insurers.

  • October 5, 2006 at 11:32 am
    Customer says:
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    This article should be entitled, \”How to Collect More Premiums and Not Pay Claims.\” The foot race to the hospital is always won by the adjuster trying to pay next to nothing for a total release of all claims. Save some money, pay less than the reserves get a big bonus and the customer doesn\’t get what they pay for. Fault, No-Fault, it doesn\’t matter. The lawsuits are their because the adjusters don\’t timely pay the claims. Instead policy makers have decided it\’s cheaper to pay a defense attorney and delay payment while the reserve money earns interest on that money. Pressure then builds on the customer with the hope they will break and take less they are entitled to. If you want cheaper insurance, look at the policy makers at the top floors of the insurance company buildings, not the customers who simply want to receive what they paid for.

  • October 5, 2006 at 2:07 am
    one of the sheep says:
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    I take it Bad Faith is an attorney. No Fault and/or PIP coverage is rife with fraud. An unfortunate byproduct of fraud is the \”foot race to the hospital\” syndrome Bad Faith referred to. It has been and remains a difficult issue. Perhaps I\’m wearing rose-colored glasses but I believe insurance companies want to pay their customers what they are entitled to.

  • October 11, 2006 at 4:08 am
    Telling the tough truth says:
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    Suggested steps to reduce insurer\’s AND PUBLIC costs:
    1.Initial commission placed into escrow until agent and customer meet again with a full copy of the insurance policy including all provisions, waivers, etc. A 1 hour discussion of all terms, then a written release by customer acknowledging the policy is acceptable. A similar followup conference required yearly when insurer sends new premium notice with waivers, etc.
    2. Mandatory binding arbitration ( binds insured and the insurer- no court appeal right) of all claims up to $100,000 within 1 year of injury when insured files a demand.
    3. State database available to public consumers fully disclosing ALL malpractice and bad conduct claims filed against healthcare practioners in court system and state license / disciplinary system.
    4. Because insurance is a necessary industry for the public\’s good, all insurer accounting records , including reserved accounts, available upon 48 hours notice by state regulators .
    5. No premium increases greater then 5% yearly without state regulatory approval following review of accounting records and public hearings upon rate increase application. State has discretion to \”cap\” the increase.

  • December 24, 2007 at 7:40 am
    Yes says:
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    I don’t think you are wearing rose-colored glasses …. I also believe insurance companies want to pay their customers what they are entitled to.

    http://www.fplawfirm.com/

    Freiberg & Peck, LLP



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