Why car insurance is so high Law suits: System encourages excessive litigation, raises premiums $130 to $150 a year.


WANT TO LOWER your car-insurance premiums? It could happen -- if legislators in Annapolis stop catering to powerful special interests. More than 60 percent of your premium covers liability. Of that amount, 19 percent could be saved if excessive litigation and fraudulent claims were eliminated.

Sadly, state legislators yawned at the problem when a gubernatorial commission sought reforms this year. Too many of them want to please trial lawyers and doctors who vigorously fight for the status quo. These special interests know that lower insurance premiums would come out of their pockets.

Even more depressing, Gov. Parris Glendening says he has no intention of pushing auto-insurance reform again. Though the problem is apparent to anyone buying car insurance, our political leaders refuse to make sensible changes. Doctors and lawyers, after all, are prime supporters of election campaigns.

That's a shame. If Maryland had a no-fault insurance law, as do a number of other states, savings could be considerable. It would unclog courts, narrow hospitals' losses from treating accident victims, reduce business costs and make payments fast and uncomplicated.

As it is, someone involved in a car accident might wait years to collect if the matter goes to court. And there is no guarantee of winning.

Yet 69 percent of Maryland motorists in accidents hire lawyers -- the nation's third-highest rate. Many are seeking compensation for "sprains" and "strains" of dubious validity.

No-fault insurance would change that. Anyone truly hurt would be paid lost wages and medical expenses -- without having to prove fault, hire a lawyer or wait years for a roll of the dice in court. Compensation would be certain.

But the outlook for reform is bleak. Lawmakers and the governor don't seem to care about saving car owners 15 percent or more on their insurance premiums. They're just happy to see their campaign coffers fill up from those who want to keep things just the way they are.

Pub Date: 12/23/96

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