Insurance Information

Possible ways for Legislators to Reduce Insurance Costs to the Consumer

In order to help reduce the costs now associated with auto insurance and also in order make insurance more available, there are presently a number of ways that legislators and policymakers can consider.

-The No Pay/No Play option

This is the method that provides consumers with an incentive to purchase insurance. It is quite simple. It states that if a motorist does not purchase automobile liability insurance coverage he/she loses the right to sue for non-economic damages. This is the approach that is often referred to as “No Pay/No Play.” When these laws are in place those who have been injured in an automobile accident, do not carry auto liability insurance themselves lose the right to sue for damages. These laws block the recovery of non-economic damages for such individuals. In other words, if a person is not at fault but he or she is uninsured he/she cannot sue for pain and suffering. The rising behind this is that they would not have been able to provide the same benefits to others had they been the driver that was at fault. States that carry on their books statutes that are based on this concept of no pay/no play include the states of Alaska, Oregon, California, Iowa, Louisiana, New Jersey, North Dakota and Michigan.

-Mandatory Fines for for those Driving without Insurance

There are several states in which a judge can lower the fines for driving without insurance. Although in nearly every state, auto liability insurance coverage is mandatory, a report by the Insurance Research Council states that uninsured motorists still make up anywhere from 1 to 29 percent of all drivers, taking into consideration which state. Precious resources are expended each year by state and local governments as well as auto insurers acting to enforce these laws with the result being that they are only ignored or disregard.

-More Proficient Enforcement

Because the use of uninsured motorist verification database systems can be problematic in that they too frequently can misidentify insured drivers, the Property Casualty Insurers Association of America (PCI), rather supports measures for enforcement that concentrates on drivers who are most likely to drive uninsured. Such drivers could be 'Red Flagged' and would then show up so in verification checks including drivers whose licenses or registrations have been previously suspended or revoked. They could also indicate those who have been previously convicted of insurance violations, or have acquired multiple traffic law convictions. Additionally it could include those who have been repeatedly involved in accidents. In such a system, those who are repeat offenders would be obliged to file proof of financial responsibility with their local department of motor vehicles.
PCI is made up of in access of 1,000 member companies. These companies reflect the broadest possible cross-section of insurers as compared with any national trade association today. As a group, PCI members record over $198 billion in annual premium. This represents fully 40.5 percent of the nation’s property casualty insurance. All of the member companies together have written 51.6 percent of the United States automobile insurance market, as well as 39.7 percent of the homeowners market, in addition to 33.2 percent of the commercial property and liability market, as well as 38.7 percent of the private workers compensation market.