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• Flexible Choice:   Under the Auto Choice Reform Act, drivers could choose the form of auto insurance they believe is best for them and their families. One route would be for drivers to choose a policy similar to that now available in their state, either fault or no-fault insurance. Another route would be to choose the new PIP option.

• Prompt Payment:  The new PIP choice would pay the injured person within 30 days for medical bills and lost wages, regardless of fault. The victim could also recover compensation from the at-fault driver for any additional medical bills and lost wages above the victim’s policy limits.

• Better Compensation for Serious Injuries:  Irrespective of the option selected under Auto Choice, an auto accident victim could make a claim against an at-fault driver for medical bills and lost wages in excess of the victim’s own insurance. Because injured persons could recover from both their own coverage and the at-fault driver’s coverage, even people who elect the minimum permissible coverage would receive more compensation for serious injuries than they do today.   PIP motorists could purchase approximately $200,000 of guaranteed economic loss benefits for each member of their family for the same premium they are paying today for bodily injury coverage.  Additionally, drivers – irrespective of their choice of insurance – would be able to seek both economic damages and pain and suffering from drivers who operate a vehicle while under the influence of alcohol or illegal drugs, or who engage in intentional misconduct.

• Less Fraud, Fewer Lawsuits and a More Civil Society:  Because people choosing the new PIP option could neither sue nor be sued for pain and suffering, most of the liability insurance system’s incentives for fraud would disappear, along with the need to file so many lawsuits. By eliminating the incentives of the current system for fraud, Auto Choice would promote respect for the law.

• Savings and Jobs:  According to a 2003 JEC study, Auto Choice could produce savings of about 21 percent on average for drivers who elect the PIP option. This translates into nearly $400 per year for the typical American family. The JEC also found that low-income drivers would see even higher savings – about 37 percent on their overall premiums. The dramatically lower premiums will enable more low income workers to afford to own cars to get to better-paying jobs and to move from welfare to work.  If all motorists elected the PIP option, the aggregate annual savings would be approximately $48 billion.

• Preservation of States’ Rights:   States would retain the final word on whether to offer the choice of PIP. States could prevent Auto Choice from going into effect if the insurance commissioner determined that the PIP option would not reduce bodily injury premiums by at least 30 percent.  States also could "opt-out" of the Auto Choice system at any time through their own legislation. In all cases, regulation of insurance would remain in the hands of the states.

If you have questions about the Auto Choice Reform Act, please contact
pkinzler@cox.net