Some consumer activists are back to pushing no-fault auto insurance, but others think a more general overhaul of insurance regulation is a better way to go.
The idea behind no-fault is that accidents are inevitable and that, often as not, who was at fault is difficult or impossible to determine. Under a no-fault plan, accident victims collect their medical expenses and wage losses from their own insurance companies without having to make a claim against the other driver, which means a lawsuit if the other driver's insurer refuses to pay.No-fault does not deal with collision, theft and other coverages.
No-fault emerged in the 1960s as a counter to rising premiums, slow resolution of lawsuits and paltry payments.
Fourteen states adopted no-fault in one form or another, but only three - Michigan, New York and Florida - have the high barriers to lawsuits that characterize the pure no-fault concept.
But a 60 percent premium increase in five years has made auto insurance an issue again. California voters recently voted to require a 20 percent rollback.
It is in this climate that no-fault is getting another look.
Some consumer groups believe an expansion of no-fault coverage, though beneficial, should await abolition of the insurance industry's exemptions from antitrust laws, mostly in rate-setting, and on revision of state laws limiting competition.
The new no-fault drive comes from a group called "New Start" led by Virginia Knauer, consumer adviser to presidents Nixon, Ford and Reagan. The founders were James Brown, director of the Center for Consumer Affairs at the University of Wisconsin at Milwaukee, and a longtime no-fault activist, the Rev. Robert J. McEwen, professor of economics at Boston College.
The Consumer Federation of America, the National Insurance Consumer Organization and Consumers Union on Sunday released a poll of 1,008 people in which 72 percent of respondents said their premiums were too high and 41 percent said they were "much too high."
Forty-one percent supported elimination of antitrust exemptions for insurance companies, with 26 percent opposed. No-fault insurance was supported 49 percent to 37 percent and government provision of limited-coverage, low-cost policies was backed 69 percent to 26 percent.