No-Faul Auto Insurance
In the early 1930's, a group of academics examining the nations auto insurance system suggested an alternative approach, based on the workers' compensation system developed earlier in the century. Their goal was to achieve rapid and full compensation of auto accident claims without litigation. They suggested that we steer away from the American tradition of resolving disputes through litigation, to a system in which the insured insurance company pays the claim. This proposal won little attention until professors Robert Keeton and Jeffrey O'Connell refined it in 1965. They proposed a limited no-fault system, exclusively for minor accidents. Anyone injured in an accident would receive compensation for medical bills, loss wages, regardless of fault. Only those meeting the threshold of $5000 would have access to the tort system. At first this no-fault system seemed like an efficient way to receive compensation for accidents, and many states jumped on the bandwagon. At its peak, 24 states adopted some form of no-fault. Currently there are 10 mandatory no-fault
I'm not saying that insurance companies are crooked, but they are out to make money, "aren't we all" and I think that we, the insured should have the choice of which system we choose. From 1989-1995 premiums for no-fault states rose nearly 25% greater than in non no-fault states. They favor the no-fault system because it cost more to pay for both the wrongdoer and the innocent, thus increasing premiums in the long run. By eliminating fault, effectively treats good and bad drivers the same. Since then, PA, NJ, and CT have repealed their mandatory systems, however, no-fault remains optional in PA and NJ. Insurance industry's P-R people believe consumer choice sounds better than no-fault, but the term is a misnomer, and the proposal a fraud. If we were under the tort system, maybe drivers would be more careful, because if it were there fault they would be the ones paying. I know that there is a chance that I could eventually became a victim or instigator of an accident, but I'm also pretty sure I would be the victim and I would want to make sure that I can receive as much benefit as possible if this were to happen. I have yet to be in an accident of any sort. I understand that insurance companies will then go after the guilty party and try to recover damages, but this certainly does not benefit us, only the insurance company. This in turn would decrease the number of accidents and if the number of accidents go down, so will insurance rates, that is if the suits aren't for a ridiculous amount. Of the ten states with the highest premiums in 1989, eight were no-fault. No-fault systems explicitly contradict the principle of American justice that wrongdoers are held responsible for the harm they cause. Litigation over property damage for which the vast majority of car accident claims are filed continuos under no-fault, because no-fault systems typically retain the liability system for property claims.
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Acceptance Essays
