Sunday, March 16, 2008


While attention is focused on whether Massachusetts will change the way it regulates auto insurance, a battle over other issues related to the industry may be brewing. Bills that could significantly shape the future of auto tort claims have been reported favorably by the House Committee on Financial Services One bill, House 914, would allow consumers to opt out of the current tort system in exchange for what the bill's sponsor calls a "full no-fault option." Rep. William N. Brownsberger, D-Belmont, says the legislation would "give consumers the choice to have a streamlined recovery, at a lower cost, in return for giving up the right to sue for pain and suffering. They could still [recover] the actual costs of the accident, but they'd get out of the litigation business."

In exchange for giving up their right to sue, consumers could benefit from lower premiums, Brownsberger said "The idea is that people who are not a part of [the tort system] wouldn't have to pay for it," explained Brownsberger, who is a lawyer. But Michael C. Najjar, a Lowell attorney who testified against the bill on behalf of the Massachusetts Academy of Trial Attorneys, said there is no evidence that the bill would save consumers money . Najjar pointed to recent decreases in the state's auto insurance rates and noted that premiums in New Jersey skyrocketed when a similar "choice" bill was made law in that state. He also warned that consumers would sign up for the lower premiums without truly understanding the rights they were giving up, "People will just buy the cheapest insurance, and no one will tell them they can't collect," he said. Asked how such a bill would impact trial attorneys, Najjar said it would probably "decrease the number of personal-injury claims where we're taking a fee out for pain and suffering."

Another bill reported favorably, House 915, would discourage motorists from driving uninsured by limiting their ability to collect pain-and-suffering damages, even if the other party in an accident is at fault.

"This targets a standing problem" said Brownsberger. But Najjar said uninsured drivers already face significant criminal penalties and that the number of uninsured drivers has been shrinking in recent yearsl. A third bill, House 916, was also reported favorably and would create a commission to study increased auto insurance competition. Brownsberger predicted that the bill will be more of an initial priority to legislative leaders than the more dramatic concept of allowing consumers to opt out of the tort system. "You've got the insurance commissioner expressing serious interest in competition. That's where the first move would be. Once people get used to the idea of having a choice, they would start to inquire more about how their insurance works, and you'll get a variety of choices," said Brownsberger.

Noah Schaffer