Newspaper article St Louis Post-Dispatch (MO)

Dole's Auto Insurance Plan Debated as Boon, Liability

Newspaper article St Louis Post-Dispatch (MO)

Dole's Auto Insurance Plan Debated as Boon, Liability

Article excerpt

While Bob Dole's across-the-board, 15 percent tax cut has gotten all the attention, buried within his economic proposal is a plan to remake the nation's auto insurance system, which could be worth billions of dollars to drivers.

And it would not require painful spending cuts or increase the budget deficit.

"Auto choice," as it has been dubbed by its backers, would give car owners the option of buying less-expensive injury coverage solely for medical bills and lost wages, letting them save hundreds of dollars a year by opting not to carry liability insurance against "pain and suffering."

The plan has already aroused organized opposition from trial lawyers, who have a big stake in the current system and a lot of influence among Democrats in Congress, and from consumer groups with very different agendas for changing auto insurance.

But the potential saving - as much as $40 billion a year by one estimate - could make it a sleeper issue in Dole's attempts to stimulate his presidential campaign. The Rand Institute for Civil Justice found that a nationwide auto choice program could reduce the average automobile liability insurance premium by 28 percent, for a saving of $221 a car.

The first two years of Dole's tax-cut plan would save Americans an e stimated $70 billion; the auto choice program could be worth as much as $80 billion in the same period.

"Think of us as alchemists," said Michael Horowitz, a legal scholar at the Hudson Institute in Indianapolis, who, with Jeffrey O'Connell of the University of Virginia Law School, persuaded Dole to propose the radical change. "We're transforming dry legal reforms into a consumer cause - broccoli into ice cream."

That's not the way opponents see it.

"The so-called auto choice plan offers a phony choice," said Howard Twiggs, president of the Association of Trial Lawyers of America. "The high cost of buying extra insurance to maintain your constitutional right to the courthouse would mean choice is of, by and for the insurance industry, not the people."

Under state laws, drivers buy insurance against their own negligence. If a motorist runs a stop light and injures someone in another car, he can generally count on being sued, leaving his insurer either to settle the claim or fight the case in court on his behalf. …

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