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Show Family Weekly/ Aprit 5, 1970 Should We Stop Fixing th That's the idea behind a newpersonal-injury insuran says this U.S. Senator—but a lot By Sen. PHILIP A. HART of Michigan With Charles and Bonnie Remsberg F YOU ARE INJURED in an auto accident, whether or not you get a settlement may depend on yourlooks, An adjustment manual issued by one of the nation’s largest car in- surers warns claims men not to pay until they note whether the accident victim possesses such characteristics as “squinty eyes, a big Adam’s apple, a pock-marked face, yellow teeth, dirty fingernails,or a morose, shy, or brusk manner.” The reason is simple and shrewd. Present laws in all states require that before you are entitled te compensation from liability insurance for injuries or economic losses aristng from an auto accident, you must prove that the other driver was at fault. It is from his insurance com- pany, not your own, that you must collect. Getting this proof is often extremely difficult, but even if you nail it down, his insurers still do not have to pay you until a court ordersit. Insurance companies know from long experience that persons with the physical characteristics outiined in the manual are generally unappealing to juries. Thus if youfit this pattern and the other driver's company refuses you a settlement, their chances of a court victory are improved. You may wind up with no compensation whatever for someone else’s carelessness, or at the very least, you maybe delayed for years. This is just one of many inequities of the “fault system” for settling auto-injury claims. On the surface, making the person to blame pay for the consequences of his errors seems like good old-fashioned American fair play. But in practice this concept has grotesquely backfired. In seeking deserved liability payments, accident victims are commonly subjected to maddening legal snarls, delays in therapy, senseless frustrations because of whimsical company policies, and, even after they have used every weapon at their command, possibly unfair rewards because of the high-risk gamble of Family Weekly, April 5, 1970 going to court, where emotional factors rather than evidence can influence the outcome. In short, the necessity to pinpoint blame often does more to punish the victims of accidents than the drivers who cause them. If you have already innocently been involved in collision, you may have learned this grim lesson firsthand. If not, you may learn it tomorrow. As chairman of the Senate antitrust and monopoly subcommittee, whichstarted investigating the autoinsurance industry in 1965, I have heard mounting demands from traffic experts, drivers, even insurance executives themselves, that the fault system be abolished entirely. By replacing it with “imaginative insurance plans,” these witnesses argue, you and other drivers would be guaranteed prompt reimbursement for justices of the fault system begin to show themselves. To avoid expensive litigation, especially if you look as if you might make a good witness in your own be- half, insurance companies tend to settle minor claims for several times their actual worth. Various studies have revealed, however, that as the seriousness of injuries increases, the portion of the victim’s costs recovered directly from insurance companies decreases. In other words, the present fault system results in claimants being overpaid, underpaid, or not paid—and only rarely being fairly paid. If the insurance company decides to fight the matter out in court, as it often does with sizable claims, the situation gets even worse. Long delays are common. In coun- ties with more than 750,000 popula- injury-caused expenses and income tion, the average delay in a personal- loss, and your auto-liability insurance injury trial is nearly three years. In Chicago, it is 70 months; in Philadelphia, 51. In Michigan, even of the miner cases that reach the courts, only oneout of four is settled within a year. This wait can inflict economic hardship on victims whose medical expenses have skyrocketed and whose income has been cut or wiped out because of an accident. Statistics make the risks of the fault system painfully clear. In a recent Unversity of Michigan study of persons suffering economic losses rates could be cut. Now that sounds very appealing and many of these pians have great merit. But the problem, as we shall see, is that all of them create new problems for the motorist as they eliminate the old ones. Of course, it is becoming increasingly difficult to say for certain who is legally to blame in a great many auto mishaps. Traffic experts have calculated that with today’s congestion and proliferating distractions drivers are called upon to make an average of 200 observations and 20 decisions in every mile. With this kind of responsibility involved, it is hardly surprising that both drivers are partly at fault in about one out of five accidents. In most states, unless you can gather the physical evidence and witnesses to prove that you are free from any blame, your chances of ne- gotiating successfully with the other driver's insurance company are slim indeed. With solid evidence on your side, you'll likely get the most favorable consideration from an adversary insurance company if your claim is small. This is where the grave in- from injury in auto accidents, only 837 percent received any payment from liability claim. Of thoseseriously injured, almost one-half got nothing. Often the settlements that were paid did not begin to meet the actual loss. In myopinion, based on evidence heard so far by our subcommittee, it is high time we explored alternatives to the fault system. Many bold new plans have been proposed, and some already are at work in other coun- tries, including Canada. Two experts working to reform the present system are Professors Jeffrey O’Connell of the University of Illinois and Robert Keeton of Harvard, both authorities in the law of auto accidents. Undertheir plan, if you were injured in a car crash you automatically would be reimbursed fully for the cost of treatment, loss of income and other expenses you suffer, up to $10,000, without any determination of fault being made. You would simply have to prove that the injuries occurred and document your economic loss. You would be paid by your own insurance company, just as you are now under health-insurance policies, and the reimbursement would be made promptly as expenses occur instead of in a lump sum. The $16,000 limit would be a minimum that every driver’s policy would be required to carry. You could also buy additional “catastro* phe”protection, up to $100,000 from your own insurance company. Or, to collect amounts above $10,000, you could sve ihe other driver’s company, as is now possible. Suits for amounts below $10,000, however, would be pronibited The main Connell plan is to eliminate thelitigation, delay, inequity, and much of the cost now involved in settling claims. They say that cuts in investigative and legal work would be so great that auto insurers could lower premiums by about 15 to 25 percent. That looks very promising until we examine it closely. But then we find that the “no-fault” system— despite its appeal—is notitse'f without fault. This system would Jeave the small claimant all alone in the fight for just compensation from the company. The policyholder’s company is still going to be tempted to settle for the smallest possible amount. And if the claim is under $10,C90, the claimaut is unable to threaten court action. So his bargaining position is somewhat eroded. Another plan has been submitted by the American Insurance Association, whose member companies handle about 30 percent of the nation’s auto-insurance business. After studying some 11,000 accidents in |