Cancel free rides with no-fault insurance initiative
California’s law-abiding citizens should not pay for uninsured
motorists’ damages, injuries
By Edmond Banayan
According to a recent study conducted by the state’s Department
of Insurance, approximately 5 million California motorists drive
without automobile insurance. This is 28 percent of our state’s
population who apparently believe one of three things:
1) California’s public policy rules and regulations were drafted
for everyone else but them
2) The current system rewards and protects you regardless of
your contributions and individual responsibilities
3) The current automobile insurance system is clearly inadequate
to respond to and fulfill the public’s needs.
Currently, state law requires motorists to purchase automobile
insurance policies with the following features as a basic minimum:
A minimum of $15,000 coverage protecting other parties injured in
an auto accident; up to $30,000 of coverage if more than one victim
is injured in a collision; and an additional $5,000 coverage for
property damages.
Under the current personal-injury liability system, the 5
million uninsured motorists are protected and eligible to file
lawsuits, report damage claims against an insured motorist, and
attend arbitration to determine the degree of compensation
appropriate for their pain, suffering and/or damages. This fact is
of grave importance to our state’s mission to balance the budget,
build our economy and re-establish Los Angeles as the "Capital of
the Third World."
Consider the following case: Two parties are involved in an
automobile accident, with Party X at fault and Party Y subsequently
filing a claim to receive compensation for pain, suffering and
damages. To our delight, Party Y has no automobile insurance and
will receive a hefty monetary compensation from the compiled
physician, psychological and laboratory assessments drafted in
favor of the plaintiff’s litigation process.
Let’s assume the parties have exchanged positions. That is,
Party Y, according to the police report, is now determined at fault
and must pay for damages suffered by Party X. Oh, and one more
fact: Party Y has no insurance coverage. What happens now is a
transformation process contributing to the $1 billion bill we, the
responsible, law-abiding members of society, have to pay. We pay
for this bill indirectly through higher premiums on insurance
policies purchased.
In essence, there is a "free rider" problem whereby those
without liability insurance force Californians to pay more than
their fair share for automobile insurance. It is truly an injustice
and an inefficient way to promote public values, standards and
economic growth. It costs us millions of dollars that would be
better served in other areas, like a retirement fund, investment in
our children, health care coverage, or recreational spending at the
local theater or shopping mall.
Proposition 200, the proposed no-fault insurance system on the
March 26 ballot, would eliminate cases involving litigation of
death or injuries. It would mandate showing proof of auto insurance
to register a vehicle. Regardless of which party is at fault, this
proposed initiative eliminates the majority of litigation cases
presently flowing through the system. Only accidents involving road
hazard conditions, criminal nature and vehicle design will receive
consideration for litigation.
In short, the responsible, law-abid ing members of society would
benefit in many ways. They pay less in premiums and receive the
luxury of saving more money for other payments, investment
opportunities, or setting up and/or building their retirement
funds.
Under the no-fault initiative, drivers buy automobile insurance
to protect themselves and their passengers in exchange for lower
premiums and surrendering the right to sue for injuries. However,
comparably, we will receive a higher level of services and benefits
for insurance premiums paid. Clearly, California’s decision will
entail considering trade-offs where the benefits can outweigh the
costs, or the opposite.
Supporters and opponents greatly disagree on the impact of the
no-fault initiative versus the personal-injury liability system. On
March 26, 1996, the UCLA community and all other Californians will
have the opportunity to vote on a ballot measure that can
dramatically change the design and influence of the automobile
insurance industry.
There will be much discussion and numerous debates in the
upcoming days, weeks and months surrounding Proposition 200. I
encourage you to take part and evaluate the pros and cons of this
proposed ballot initiative. It can greatly affect your day-to-day
activities, finances and preference.
Banayan is a 1994 UCLA alumnus and a lifetime member of the UCLA
Alumni Association.Comments to [email protected]