The Massachusetts legislature is getting ready for another battle over Harvard Law professor Robert H. Keeton's proposal for sweeping auto-insurance reform in the state.
Keeeton's proposal-passed by the House but rejected by the Senate in 1967 and again in 1968-this week was introduced for the fourth straight year. The bill is aimed at reducing auto-insurance rates and eliminating lengthy litigation over minor accidents.
Under Keeton's "Basic Protection Plan," an accident victim would receive compensation from his own insurance company, regardless of who was at fault in the accident. At present, the insurance company of the negligent driver pays all claims.
Keeton said yesterday he feels that this time the bill has a much better chance of approval by the legislature. More pressure for auto-insurance reform now exists in Massachusetts because it is generally recognized that the state's three-year freeze on auto insurance rates cannot continue much longer. he said.
Bye Bye Belli
"Basic Protection" would eliminate court actions to determine fault in cases where damages are less than $10,000. Keeton says the bill will relieve insurance inefficiency in two ways:
The basic protection plan would cut insurance premiums, Keeton claims. At present 23 cents of every premium dollar goes to court costs and attorney's fees. For example, the average settlement in cases under $100 ultimately costs the insurance company more than seven times that amount due to lengthy and complicated court proceedings. The Keeton plan, which settles cases without regard to fault. would largely eliminate that expense, he said.
The basic protection plan would greatly speed up the claims process, he said. because claims could be settled by direct dealings with the insurance companies without long delays caused by court actions.
Although individuals would no longer be responsible for negligence under this plan. Keeton said he feels this will not decrease the incentive to avoid accidents.In fact, the individual is not now personally responsible in most cases, he said, since more than 99 per cent of all compensation is paid by corporate insurance companies.
The idea of basic protection was first formulated by Keeton and professor Jeffrey O'Connell of the University of Illinois in their 1965 book Basic Protection for the Traffic Victim. The two have also published a less technical book, When Cars Crash, to explain the plan to the layman.
Representative Michael S. Dukakis, who will be guiding the bill through the House, said he expects it to be passed by Memorial Day. 1970.
Chief opposition to the bill will come from trial lawyers, who get much of their income from the type of court proceedings that the basic protection plan would claimant. Keeton said.
The insurance companies themselves are divided on the issue. Many are urging at least some changes toward the goal of ending negligence in minor cases, he said.