COMMITTEE ON THE DISTRICT OF COLUMBIA DANIEL K. INOUYE, Hawaii CHARLES MCC. MATHIAS, JR., Maryland ROBERT HARRIS, Staff Director and Counsel GENE E. GODLEY, General Counsel SUBCOMMITTEE ON BUSINESS, COMMERCE, AND JUDICIARY JOHN V. TUNNEY, California CHARLES MCC. MATHIAS, JR., Maryland (11) Clark, Howard B., senior insurance research specialist, Office of Policy Eckhardt, Congressman Robert, a U.S. Representative from the State of Mundle, Winfred R., chairman, No-Fault Insurance Legislation Commit- Goodwin, John, Missouri Bar Association_ Hahn, Gilbert, Jr., Chairman, District of Columbia City Council__ Jones, T. Lawrence, president, American Insurance Association.. Maisonpierre, Andre, vice president, American Mutual Insurance Alliance_ Mikva, Congressman Abner J., a U.S. Representative from the State of Murphy, C. Francis, corporation counsel, District of Columbia. Patterson, Frank J., president, Metropolitan Washington Association of 465 Patterson, Robert S., Washington, D.C.- 134 Richardson, Orville, Missouri Bar Association. 469 Ryan, John, Commissioner of Insurance, State of Massachusetts Shortt, Charles, chairman, No-Fault Committee, Metropolitan Washing- Spangenberg, Craig, chairman, Automobile Reparations Committee, Amer- ican Trial Lawyers' Association__ Stanford, Robert J., past president and vice chairman, Auto Reparations Committee, Association of Plaintiffs Trial Attorneys of Metropolitan Stevenson, Russell B., Jr., associate professor, George Washington Uni- versity Law School; chairman, Washington Council of Lawyers.. Vinson, Fred M., Jr., president, Bar Association of the District of Colum- Watt, Graham W., Deputy Mayor-Commissioner, District of Columbia.. Wender, Harry S., chairman, Federal Tort Law Committee, Federal Bar PREPARED STATEMENTS Association of Plaintiffs Trial Attorneys of Metropolitan Washington, D.C. Maisonpierre, Andre, vice president, American Mutual Insurance Alliance.. Vinson, Fred M., Jr., president, Bar Association of the District of Colum- Page 167 495 220 127 485 Washington Bar Association of Metropolitan Washington, D.C.. 172 186 MATERIAL SUBMITTED American Insurance Association, letter to Senator Stevenson, October 8, 1971, with enclosure.. 491 Association of Plaintiffs Trial Attorneys of Metropolitan Washington, 507 512 507 Consumer Attitudes Toward Auto Insurance- -a study. 335 Dual Protection-a program for improvement of the Automobile Accident 291 Greene, Chief Judge Harold H., Superior Court of the District of Columbia, letter to Milton Heller, September 22, 1971-- 154 Hanses, Joseph J., Bransford, Hanses & Bransford, letter to the chairman, 514 Jewell, John R., secretary, Maryland State Department of Licensing and 156 Mutual Insurance Agents Association of Virginia and the District of 495 National Association of Mutual Insurance Companies, letter with enclosure, September 29, 1971.. 511 O'Connell, Prof. Jeffrey, letter to Congressman Abner Mikva, September 29, 1971, excerpts from... 148 "Public is Critical of No-Fault; Favored by Insurance Men" article from the Hartford Courant, August 19, 1971.. 154 Thompson, J. Roy, Jr., chairman, Insurance Law Committee, memoran- U.S. District Court for the District of Columbia, 1966–70_- APPENDIX American Trial Lawyers Association, proposed Federal Automobile 494 153 510 635 Compensation for Motor Vehicle Accident Losses in the Metropolitan Area of Washington, D.C., automobile insurance and compensation study by the Department of Transportation__ Providing for compulsory personal injury protection for all registered motor vehicles... 605 Relative to the renewal of certain motor vehicle insurance policies... 611 AUTO ACCIDENT REPARATIONS IN THE DISTRICT OF COLUMBIA TUESDAY, SEPTEMBER 28, 1971 U.S. SENATE, SUBCOMMITTEE ON BUSINESS, COMMERCE, AND JUDICIARY, Washington, D.C. The subcommittee met, pursuant to notice, at 10 a.m., in room 6226, New Senate Office Building, Senator Adlai E. Stevenson III (chairman) presiding. Present: Senators Stevenson and Buckley. Staff present: Gene E. Godley, general counsel; and Clarence V. McKee, Jr., minority staff member. Senator STEVENSON. The hearing of this subcommittee will come to order. Today the Subcommittee on Business, Commerce, and Judiciary of the Senate District Committee begins hearings on automobile insurance reform for the District of Columbia. The present system is a shambles-not just in the District but throughout the Nation. The fault system in its present form has no defenders. Even those with most at stake in the system agree that reform of some kind is essential and overdue. These hearings will consider reforms suited to the needs of the people who visit, work, and live in the District of Columbia. Auto insurance reform is a difficult and complex undertaking, an undertaking which raises many issues on which reasonable men can differ. I hope that the 19 witnesses who will appear before this subcommittee in the next 2 days will air their differences, so that both sides of every major issue will be presented and discussed fully. This is not a subject for doctrinaire solutions or uncompromising positions. Only the simplistic will think they know all the answers. On the other hand, there is a growing body of research on auto accident reparations, including the massive study completed earlier this year by the Department of Transportation. This body of research makes it clear that the present system works poorly when it works at all. The outmoded case-by-case approach to determining fault has been condemned by legal scholars because it runs up premium costs, clutters up the courts, and gives some people too much, some people too little, and many victims nothing at all. In one recent year, auto deaths in Metropolitan Washington caused economic loss of nearly $12 million. Automobile insurance paid out only $800,000 in benefits or less than 7 cents in benefits for each dollar of economic loss. In 49 percent of the death cases, auto insurance paid absolutely nothing to the survivors. If we consider all auto injuries nationwide, the system is so inefficient and so misdirected that the motorist has to pay $7 in premiums for each $1 of benefits received for economic loss not otherwise compensated. The people have every right to be fed up with insurance which takes so much and gives so little; which millions of people-including the poor, the elderly, the young, and the black-find hard to get; which encourages malingering and ambulance chasing while discouraging rehabilitation and prompt payment. Worst of all, the present system creates a state of perpetual anxiety and uncertainty, because the motorist and the pedestrian have no way of knowing whether they will be able to recover their economic loss. This problem is especially acute in the District of Columbia where 80,000 uninsured vehicles imperil the well-being tourists, commuters, and residents. It is time for the Congress to act by passing a just and humane no-fault bill for the District. This subcommittee has a no-fault bill before it. The bill would compensate every victim of an auto accident in the District, except persons in out-of-state vehicles, for all their medical costs, from the first dollar to the last. It would also provide up to $54,000 compensation for lost earnings, with optional coverage available for higher amounts. Insurance companies are required by law to make these payments within 30 days of receipt of a properly documented claim." In this way, a substantial proportion of auto accident cases will be taken out of the courts, assuring prompt and full payment for the victim and smoother functioning of our courts. The law also requires the companies to provide coverage to all licensed motorists and prohibits cancellation except for loss of license or nonpayment of premiums. Because a no-fault system is more efficient than the fault system, there will be a substantial reduction in bodily injury premium rates as well. The purpose of these hearings is to consider the present bill and ways of improving on it. I am not fixed upon every phrase and provision of the bill, but I am determined to reform the system so that victims of auto accidents are fairly compensated-at minimum expense and inconvenience. At this time I place in the record copies of S. 2322 and S. 1364, the bills under consideration today. (S. 2322 and S. 1364 follow:) |