The pros and cons of tort auto insurance

Tort Auto Insurance System

One of the often cited flaws in the fault system is delay in delivering benefits in the severe case, and an undue emphasis on all-at-one-time payments. Going back to the Oregon program, this defect has been solved by offering short-term economic benefits on a no-fault basis, later deducted from any lump-sum jury award or settlement based on fault. Again, this illustrates the fundamental compatibility of fault and no-fault. Find SR22 insurance policies in your state.

Thus far, the legal and judicial sides of the issue have been under fire. Now we must look at the role of insurance in a system of law. To now, the mission of the law has been to identify and enforce legal rights and responsibilities. Insurance has served the function of providing indemnity for what the law was willing to compensate. With the introduction of no-fault principles, will the tail now be wagging the dog? We are asked to abandon fundamental ideas of fault and individual responsibility for a legal system more compatible with a decrease in the price of insurance. The question is raised as to whether what is in the best interest of the insurance industry will be ultimately best for the public.

Most of the complaints about the fault system have been generated by conditions spawned by the insurance industry.

The industry has allowed the quality of its service to decline to a point where it is no longer able to cope with accident volume. For years, companies demonstrated a devotion to outmoded claim-handling techniques as well as a lack of imagination in devising better ways to serve the public. For example, the industry did not use the telephone for investigation of automobile personal injury claims until well into the 1960’s, when Liberty Mutual pioneered the end of the cumbersome method of personal contact insisted upon by claims departments.

Settlement discussions were frequently conducted in a hostile way, which led to public condemnation of not only the insurance companies but the negligence system itself.

The record is replete with examples of underwriting blackouts in high-risk areas, insurance company bankruptcies, arbitrary cancellations, deceptive advertising practices, poor and dilatory claim handling, and take-it-or-leave-it settlement tactics. No-fault can do nothing to alter these factors if the industry itself is not willing to change. Changing the law of negligence will not result in any better performance unless a closer scrutiny by the licensing authorities results in effective changes.

The state agencies must insist on action. The habitually poor performance of the insurers has become so intertwined with the public’s general understanding of this system as to threaten the existence of the law of negligence. The tort system has been made the scapegoat of unfair practices, far beyond the scope and control of the law.

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