In doing so, they'll decide whether to dilute the nation's most stringent no-fault auto insurance law, which requires drivers purchase coverage that provides unlimited lifetime medical benefits, and continue a trend among states of altering or even scrapping their no-fault laws.
"Customers are saying it's getting tougher and tougher to pay those premiums," said
But caught up in the
The idea behind no-fault laws was that insurance companies would deliver faster payouts to crash victims and lower premiums in exchange for caps on damages and limits on consumers' ability to sue.
By the mid-1970s, 16 states had embraced the idea. But the benefits promised didn't come to fruition everywhere. By the early 1990s, insurance premiums had increased, drivers were suing their insurers over coverage benefits, and fraud had become rampant. Some states found themselves in the position
It's a situation that
Her group estimates premiums could be cut by as much as 45 percent if House members agree to a bill, which the
The proposed changes
Without a requirement to prove fault, scammers can easily trick the system into an illegitimate payout, which also leads to higher premiums for law-abiding drivers. The proposal would create a fund to pay for investigators and prosecutors dedicated to chasing down auto insurance fraud cases.
"Insurance companies know that there is fraud going on," Conarton said. "But when they take it to a prosecutor or investigators, their resources are limited. They're working on cases that involve murder and assault ... and don't always have the time or the knowledge of insurance fraud to pursue those cases."
But fraud is only part of the problem in
The current no-fault law, which has capped medical benefits at
"It's basically a bare-minimum policy that's rife with fraud and abuse," Brandes said.
When his bill failed earlier this year, Brandes asked the state to study how premiums would change if the no-fault system doesn't change and how proposals, like his bodily injury liability coverage requirement, could improve coverage.
The study also will analyze the effect of
"We've been constantly reforming it since the '70s, but I think there's a general consensus that
Origin of No-Fault
The idea of a no-fault insurance system originated with academics in the 1930s as a way to try to make sure medical benefits were paid quickly to crash victims and not clog the courts with small claims cases.
But while people injured in crashes benefited from quick payouts, no-fault laws also meant they largely gave up their right to sue negligent drivers and in a few cases saw a steep increase in insurance premiums.
Most states require that drivers purchase a minimum of liability insurance to cover damage to property and other people's injuries if they cause a crash. Many drivers end up buying more coverage than is required.
No-fault laws are not the only source of high auto insurance premiums, even in
States with high premiums are often subject to other risks like natural disasters or congested roads, which up the chances that people will have a wreck.
"This drives the frequency and severity of automobile accidents," he said of traffic congestion. "Just a lot of cars on the road, driving a lot of miles. Just a lot of people going to and from work."
Only a third of a driver's premium goes to the no-fault coverage requirement, he said, and that amount of coverage is essential to guaranteeing people with major injuries can get the medical care and long-term rehabilitation they need.
"We have patients who have been paralyzed, who have received significant brain injury, and through the rehab that's been provided, they're able to in some cases recover to go back to some type of employment," he said.
The proposal before the House would preserve
Hovey's group argues that the savings promised by proponents of the legislation would only amount to a few dollars each month. The proposal could also cost
But Conarton says the state needs to set limits, similar to those established for workers' compensation cases, on how much insurance companies have to pay when someone is injured in an accident. Right now, she said, hospitals or doctors can charge as much as they want to treat someone for car crash injuries.
"If you break your arm in a work accident, there's a fee schedule so your MRI would cost this much and it's noted what that would be," she said. "In the no-fault system, you break your arm in a car accident, there's no fee schedule and auto insurers are required to pay the charges."
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