Thank you for the support you gave to SB 941, the no-fault auto insurance reform bill. The measure was defeated in the Senate Judiciary Committee on May 28 by a vote of 5 to 5 with one abstention. Six votes were needed to pass the bill.
The case we made was straightforward:
* Auto insurance rates are high and headed higher even with Proposition 103 in effect.
* While there are many causes for rising rates (fraud, medical costs, repair shop billing practices, fragile auto bodies), the most explosive costs are associated with lawsuits for pain and suffering.
* To drive down the cost of insurance, lawsuits should be limited to serious injuries and accident victims should be paid quickly for out-of-pocket costs (medical bills and wage loss).
This proposal guaranteed a basic policy for $220 per year. The Department of Insurance's actuary costed out the reforms for people who would buy greater coverage and found most would save money--a lot of money in urban areas.