The Auto Choice Reform Act


Auto insurance reform the right way --
increased choice, lower premiums, better compensation

 

What is it?

Overview
Summary
Supporters
Editorials

 

The Legislation

U.S. Senate Bill in the 108th Congress
S. 2931, bill status and summary
S. 2931, in PDF (via GAO)

U.S. House of Representatives Bill in the 107th Congress
H.R. 1704 bill status and summary
H.R. 1704 in PDF (via GAO)

U.S. Senate and House of Representatives Bills in the 106th Congress
S. 837 bill status and summary  
H.R. 1475 bill status and summary
S. 837 in PDF (via GPO)
H.R. 1475 in PDF (via GPO)

Sponsors' Statements
    
-Senator John Cornyn
     -Senator Mitch McConnell
     -Senator John McCain
     -Senator Joseph I. Lieberman
     -Senator Daniel Patrick
Moynihan

     -Representative Richard K. Armey
     -Representative James P. Moran

Congressional Testimony
     -The Honorable Michael Dukakis*
     -Wellington E. Webb, Mayor, Denver
     -Professor Jeffrey O'Connell, University of Virginia School of Law*
     -Andrew Tobias, author and consumer activist
     -Peter Kinzler, President, Coalition for Auto-Insurance Reform*
     -Robert Lee Maril, "The Impact of Mandatory Auto Insurance Upon Low Income Americans"*
     -Dr. Stephen J. Carroll, RAND Institute for Civil Justice*
     -Michael Horowitz, Senior Fellow, Hudson Institute

*Adobe Acrobat files

Impact on Cost, Compensation and Driving Behavior


 

 

Peter Kinzler, Auto Insurance Reform Options:  How to Change State Tort and No-Fault Laws to Reduce Premiums and Increase Consumer Choice (NAMIC, 2006).  Analyzes the history of auto insurance reform efforts at the state and federal level, finds the "tort versus no-fault" reform paradigm to be a false choice and, instead, offers a series of recommendations to lower premiums and, in some cases, improve compensation and increase choice in both tort and no-fault states.
Peter  Kinzler, "Colorado's New Tort Auto Insurance:  A Bad Deal for Motorists and Emergency Medical Care" (2004)
 
Finds that the average driver will save little from the return to the tort system from Colorado's flawed no-fault system and will sacrifice much in the way of lost compensation.  Recommends an auto choice system to permit drivers to choose between the tort system and a pure no-fault system that would offer greater compensation at a cost lower than that of the tort system.
Joint Economic Committee, "Choice in Auto Insurance:  Updated Savings Estimates for Auto Choice" (2003)  Estimates total potential savings from adoption of the Auto Choice Reform Act at nearly $48 billion in 2003, with an average savings of $189 per vehicle.  Low-income drivers would enjoy average savings of 37 percent.
Jeffrey O'Connell, Peter Kinzler and Hunter Bates, "A Federal Bill, with Commentary, To Allow Choice in Auto Insurance" (2001)  A section-by-section analysis, with detailed analysis of the implications, of H.R. 1704, the Auto Choice Reform Act of 2001.
RAND Institute for Civil Justice, "The Effect of No-Fault Insurance on Driver Behavior and Automobile Accidents in the United States" (2001)
  The report examines trends in automobile accident rates and rates of driver negligence in the United States between 1967 and 1989 and finds no evidence that the adoption of 16 state no-fault auto insurance laws in the 1970s increased fatal accident rates in those states.  It also finds no correlation between the presence of no-fault auto insurance and a state's overall accident rate or rate of driver negligence
Peter Kinzler and Jeffrey O'Connell, "More for Less Under Auto Choice:  Fewer Dollars for Lawyers, Fraud, Pain and Suffering and Insurance Companies Mean Lower Premiums and Better Compensation for Motorists" (2001)  Identifies how all of the options under the federal auto choice legislation would provide, on average, both better compensation for serious injuries and lower premiums.  This article is an updated version of a chapter that appears in Lascher and Powers, "The Economics and Politics of Choice No-Fault (2001).
New England Journal of Medicine, "Effect  of Eliminating Compensation for Pain and Suffering on the Outcome of Insurance Claims for Whiplash Injury" (2000)  Finds fewer whiplash claims and speedier recoveries  when people injured in auto crashes are assured compensation for their medical bills but not for pain and suffering claims (based on experience in Saskatchewan, Canada)
Committee for Economic Development, "Breaking the Litigation Habit:  Economic Incentives for Legal Reform" (2000) Cites the benefits to both motorists and businesses from a system that compensates injured people for their medical bills and lost wages without litigation.
RAND Institute for Civil Justice, "The Effects of a Choice Automobile Insurance Plan on Insurance Costs and Compensation: An Analysis Based on 1997 Data" (1999)
 
Updates cost savings estimates under the new personal injury protection insurance option of Auto Choice at an average of 56 percent on bodily injury premiums or a 23 percent reduction in total auto insurance premiums.

Impact on Cities, the Poor, Businesses, Consumers and Choice


Joint Economic Committee, "Auto Choice:  Impact on Cities and the Poor" (1998)
Joint Economic Committee, "Auto Choice:  Relief for Businesses & Consumers" (1998)
RAND Institute for Civil Justice, "Choosing an Alternative to Tort" (1995)
RAND Institute for Civil Justice, "How Big Is the Price Tag for Excess Auto Injury Claims?" (1996)
National Center for Policy Analysis (Michael Horowitz), "Putting Drivers in the Driver's Seat" (1998)
Citizens for a Sound Economy, "Auto Insurance and the Urban Poor" (1999)
Freedom Works, "In Defense of Auto Choice Insurance Reform" (1998)
Freedom Works, "Escaping the Tort-Based Auto Accident Compensation System:  The Federal Auto Choice Reform Act of 1997" (1997)

 

 

 

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