Ask the Scholar
Document scope · 1 page
Scholar
Ask about this object, its catalog metadata, its source description, or the page inventory.
For page-specific OCR and visual context, open one of the page chats.
Scholar Source Context
Document identity
localId
1515889
label
No Fault Insurance (3)
core
doc
dtoType
document
citationUrl
pageCount
1
Source metadata
id
1515889
sourceUrl
contentType
document
title
No Fault Insurance (3)
citationUrl
collections
James M. Cannon Files (Ford Administration)
James Cannon's Issues Files
subjects
Insurance
Legislation
iiifBase
thumbnailUrl
largeImageUrl
imageCount
1
hasImages
yes
source
import
hasTranscription
no
Source extras
naId
1515889
coverageEndDate
logicalDate
1976-09-30
month
9
year
1976
coverageStartDate
logicalDate
1975-05-01
month
5
year
1975
levelOfDescription
fileUnit
recordType
description
ocrSource
nara-archive
Single page context
seq
1
pageIndex
0
type
document
url
mediaId
6991494c3d630c26
ocrText
The original documents are located in Box 24, folder "No Fault Insurance (3)" of the James
M. Cannon Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
HE WHITE HOUSE
WASHINGTON
TO:
JIM CANNON
FROM:
MIKE DUVAL
For your information
FORD i LIBRARY GERA
Comments:
Re: No-Fault
Attached is a copy of the state
activity summary I prepared and
the back-up material.
The summary will be in the Presi-
dent's decision memo. I am
sending this detailed package
to you in response to your
comments this morning.
Digitized from Box 24 of the James M. Cannon Files Who
at the Gerald R. Ford Presidential Library
Status of State Action on No-Fault Auto Insurance
Sixteen states, plus Puerto Rico, have enacted no-fault
automobile insurance laws that meet the tough definition
adopted by the Department of Transportation.
To qualify under the Department's definition of no-fault,
the state law must have two essential elements: (1) the
substitution (not simply the addition of) "first party,
no-fault" insurance for third party liability insurance;
(2) some significant degree of restriction on tort recovery.
The following have such a law:
Puerto Rico
(1969)
Massachusetts
(1970)
Florida
(1971)
New Jersey
(1972)
Michigan
(1972)
Connecticut
(1972)
New York
(1973)
Utah
(1973)
Kansas
(1973)
Nevada
(1973)
Hawaii
(1973)
Colorado
(1973)
Georgia
(1974)
Minnesota
(1974)
Kentucky
(1974)
Pennsylvania
(1974)
North Dakota
(1975)
There are, however, vast differences among the laws adopted
in the above states in terms of benefit levels, tort threshold
and other factors.
These laws cover over 42% of all licensed drivers and will rise
to well over 50% if California passes a no-fault law. However,
only the Michigan law (covering 5.7% of drivers) conforms with
all the standards in the DOT proposed federal law.
Nine other states have adopted auto insurance reform, which are
sometimes called "no-fault". In some cases, these plans require
that first party insurance be carried by drivers in addition to
"First party" means that there should be a contractual relation-
ship between the victim and his insurer as to the kind and amount
of benefits to be received. "No-fault" means that the loss is
not to be shifted by inter-insurer subrogation according to the
existing loss transfer rules of tort liability.
2
liability insurance and in other cases the law simply provides
that no-fault be offered to the driver at his option. None of
the plans restrict the right to sue and in most cases there is
no restriction against the victim collecting from both his own
first party insurance and the party at fault by suing in court.
The following states fall into this category:
Delaware
(1971)
Oregon
(1971)
South Dakota
(1971)
Maryland
(1972)
Virginia
(1972)
Wisconsin
(1972)
Arkansas
(1973)
Texas
(1973)
South Carolina
(1974)
Outlook
Every State legislature has had no-fault reform before it at
least once. Illinois enacted a no-fault law in 1971, but that
was later declared unconstitutional. A no-fault law was passed
by the legislature in New Hampshire but was vetoed by the Governor.
Most states not having no-fault will consider proposals during this
year's legislative session. Maine and North Carolina may pass no-
fault laws this year but it is not likely that they will meet the
DOT standards.
California is the key state in terms of the number of licensed
drivers covered and there is likelihood that action by California
would set a trend. Many other western states would be likely to
follow California's lead if action is taken. Due to a change in
the leadership in the California legislature the no-fault bills
are moving slowly but nevertheless there is movement and consider-
able behind the scenes activity. No one can predict when Califor-
nia will act but the prospects for action this year are good.
OF
DEPARTMENT
DEPARTATION
OFFICE OF THE SECRETARY OF TRANSPORTATION
*
*
WASHINGTON, D.C. 20590
UNITED STATES OF AMERICA
April 30, 1975
MEMORANDUM FOR MICHAEL RAOUL-DUVAL
Associate Director, Domestic Council
The White House
SUBJECT: No-Fault Insurance
Pursuant to your inquiry earlier today about the proportion of
drivers covered within the 16 States having some form of true
first party no-fault plan, I thought the attached detail might be
helpful to you. The point of the categorization in the table is to
highlight the fact that many of the States which do have such
plans fall woefully short of what the Administration was looking
for when it made its recommendations in 1971.
D.Dc.W.
Richard F. Walsh
Acting Director
Office of Transportation Policy Development
Attachment:
as noted above
CC: William T. Coleman, Jr.
John W. Barnum
Analysis of No-Fault Auto Coverage by State
and By Percent of All U.S. Drivers Covered
Percent of All
U.S. Drivers
Covered (%)
States Meeting DOT Standards
Michigan
5. 7%
Other States With Relatively High Benefit
Levels (i.e., more than $10,000 per person)
Colorado
1.0%
Hawaii
.4
Minneapolis
1.9
Nevada
.3
$
New Jersey
4.1
New York
9.2
Pennsylvania
6.0
Subtotal*
22.6%
States With Low Benefit Levels (i.e., $10,000
or less per person)
Florida
4.3%
Kansas
1.0
North Dakota
.3
Utah
.4
Connecticut
1.6
Georgia
2.2
Massachusetts
2.9
Kentucky
1.2
Subtotal*
13.7%
Grand Total
42.0%
*Note: Detail may not add to totals due to rounding.
TPI-30
4/30/75
F.C.&S. BULLETINS
Auto (Casualty)
NO-FAULT AUTOMOBILE INSURANCE
Casualty & Surety Section
Nof-1
September, 1974
NO-FAULT AUTOMOBILE INSURANCE
(1)
State-By-State Analysis
Originally appearing as a controversial theory to correct the inequities of
the traditional automobile reparations system, no-fault Automobile insurance,
in one form or another, has become law in 23 states. The impetus for such
legislation originated at the Federal level, with recommendations that the
individual states enact their own laws. Massachusetts, the pioneer state,
enacted the first such law in January, 1971 and, ever since, the concept has
dominated insurance conversation and served as a chief subject of state
legislation. But in spite of the sustained momentum, today, fewer than half*
the states have passed no-fault Automobile insurance laws. As a consequence,
attention is once again focused on Congress where Federal Bill S. 354 -
which imposes Federal guidelines on the states and requires that no-fault
legislation be enacted which complies with these guidelines - recently cleared
the Senate. If ultimately signed into law, this Bill will give the states four
years from the date of its enactment to pass complying no-fault legislation.
Though some still question the advantages no-fault Automobile insurance has
over the traditional fault system, both insurers and consumers are responding
favorably to the partial elimination of the "adversary relationship," which is
achieved in most no-fault laws. Proponents of the no-fault system believe it to
be far superior than the traditional reparations system in the fairness and speed
in which it compensates the automobile accident victim - on a first-party basis
rather than on a third-party basis.
The following pages represent an effort to analyze these laws on a state-by-state
basis. Initially, the presentation of a state-by-state chart provides a quick, general
reference to the various laws but additional pages will soon be presented for a more
in-depth study of this insurance.
In view of the ever-changing nature of the insurance business - to which
no-fault is no exception - - a major effort will be made to keep the discussion
up to date with timely and necessary revisions as they are warranted. Finally,
a section on court decisions affecting no-fault insurance will be included to
round out the discussion and signal any particular trends in court interpreta-
tion which may be developing.
In the following pages, two analysis charts are presented. The first concentrates
on the 15 states which have enacted what are considered modified no-fault laws in
that they partially eliminate the right to sue, but do not completely abrogate it. The
second chart is comprised of the states which provide what is more accurately de-
scribed as expanded Medical Payments and Disability Benefits plans. No-fault
benefits are made available as additional first-party coverage, but there are no
restrictions on the right to sue.
*Though fewer than half the states have enacted no-fault laws, the percentage of the popula-
tion affected is estimated to Lc slightly above 50%.
(Continued on next page.)
GERRLD FORD LIBRARY
Auto (Casualty)
NO-FAULT AUTOMOBILE INSURANCE
F.C.& S. BULLETINS
Nof-2
Beptember, 1974
State-By-State Modified No-Fault Laws
State
Effective Date
Vehicles Included
Basic Coverage
Colorado
4/1/74
All except vehicles owned by the
$25,000 medical; $25,000 rehabili-
Federal government or state of
tation; 100% of first $125 gross
Colorado; fire fighting vehicles,
income up to one year; $15 a day
police ambulances and certain farm
for essential services up to one
and construction machinery and
year; no coverage for funeral ex-
equipment. Additionally, motor-
penses but survivors' benefits of
cycles, motorscooters, minibikes
$1,000 are covered. Income bene-
and snowmobiles are not consid-
fits are not paid in the event of
ered motor vehicles and thus not
death. (Options for higher cov-
subject to the law.
erage and a $100 deductible are
available.) No provision for Prop-
erty Damage coverage.
Connecticut
1/1/73
Private passenger vehicles.
$5,000 aggregate, inclusive of med-
ical and hospital expenses; 85%
loss of income up to $200 a week;
essential services coverage with no
particular limitation other than the
$5,000 aggregate; $2,000 funeral
expenses; survivors' benefits. (Op-
tions for higher coverage are avail-
able.) No provision for Property
Damage coverage.
F. C. & S. BULLETINS
Auto (Casualty)
NO-FAULT AUTOMOBILE INSURANCE
Casualty & Surety Section
Nof-3
September, 1974
Modified No-Fault Laws
Limitation on Right to Sue
Remarks
Suit barred unless injury results in death, dismember-
Benefits recoverable under no-fault coverage are re-
ment, permanent disability or permanent disfigurement
duced by benefits payable under Workmen's Com-
or unless expenses for medical and rehabilitation serv-
pensation insurance.
ices exceed a reasonable value of $500 or if lost earn-
No-fault benefits are primary over Health insurance.
ings exceed one year. If expenses for any of the
No-fault benefits follow an insured wherever be
specific first party coverages exceed the benefits pro-
drives in United States or Canada and nonresidents
vided by law, the injured person may sue for the
driving in Colorado must have coverage at least as
excess. Additionally, suit may be brought against the
extensive as the minimum provided by the Colorado
owner of a vehicle not subject to the law (motorcycle)
law. Most insurance policies will provide this COT-
or against a motorist who has failed to insure his
erage for nonresidents.*
vehicle. Finally, suit may be brought against a person
who intentionally causes injury or against a manufac-
turer, distributor, etc., when an automobile accident
arises out of a product defect for which they are
responsible.
Suit barred unless injury results in death, permanent
Benefits recoverable under no-fault coverage are re-
injury, fracture of a bone, permanent loss of a signifi-
duced by benefits payable under Workmen's Compen-
cant body function, loss of a body member or unless
sation insurance.
medical, rehabilitation or funeral expenses exceed $400.
Law substituted comparative negligence for contribu-
tory negligence. Nonresidents driving in Connecticut
automatically have the coverage of the Connecticut
law.
*Whether nonresidents-who are injured while driving outside their home state-are covered under the other state's no-fault
law is an issue which many states have resolved. This is accomplished by requiring that all insurers authorized to write insur-
ance in the no-fault state, stipulate that every policy the insurer writes regardless of where it is issued provide the coverage
required by the no-fault state when a nonresident vehicle is in that state.
(Continued on next page.)
Auto (Casualty)
NO-FAULT AUTOMOBILE INSURANCE
F.C. & S. BULLETINS
Nof-4
September, 1974
State-By-State Modified No-Fault Laws
State
Effective Date
Vehicles Included
Basic Coverage
Florida*
1/1/72
Private passenger vehicles.
$5,000 maximum for medical ex-
pense; 85% loss of income; essen-
tial services reimbursement; $1,000
funeral expenses. (Optional de-
ductibles available.) Property Dam-
age provision declared unconstitu-
tional in July, 1973.
Georgia
3/1/75
All motor vehicles except motor-
$5,000 aggregate including $2,500
cycles.
medical; 85% loss of income up to
$200 a week; essential services
coverage not to exceed $20 a day;
$1,500 maximum (subject to the
$5,000 aggregate) for funeral ex-
penses. (Options for higher cov-
erage available.) No provision for
Property Damage coverage.
*Florida's supreme court recently upheld the constitutionality of the Bodily Injury section of the law and at the same time
strengthened its bar against tort liability actions. The court erased a provision in the law which allowed suit if an accident re-
sulted in permanent disfigurement, permanent injury, fracture of a weight bearing bone, loss of body function or death. Now,
only if injury results in death or if medical expenses exceed $1,000 can the injured person resort to the use of tort liability.
F.C.&S. BULLETINS
Auto (Casualty)
NO-FAULT AUTOMOBILE INSURANCE
Casualty & Surety Section
Nof-5
September, 1974
Modified No-Fault Laws
Limitation on Right to Sue
Remarks
Suit barred unless injury results in death, or if medical
No-fault benefits are excess over any amount paid
expenses exceed $1,000.
under Workmen's Compensation insurance.
No-fault coverage follows an insured wherever he
drives. Nonresidents, unless passengers in an in-
sured vehicle, are not provided coverage, unless their
insurers provide automatic no-fault coverage when
vehicle is in a no-fault state. (Otherwise, after 90
days, motorist must obtain coverage.)
Suit barred unless injury results in death, disfigure-
No-fault benefits are not reduced by any Workmen's
ment, permanent disability, dismemberment, any bone
Compensation, Disability, hospitalization or wage loss
fracture or unless medical expenses exceed $500 or
benefits the insured is entitled to receive. Medical
temporary disability exceeds 10 consecutive days.
Payments and Uninsured Motorists coverages are
excess over no-fault coverage.
FORD
(Continued on next page.)
Auto (Casualty)
Nof-6
NO-FAULT AUTOMOBILE INSURANCE
F. C. & S. BULLETINS
September, 1974
State-By-State Modified No-Fault Laws
State
Effective Date
Vehicles Included
Basic Coverage
Hawaii
9/1/74
All motor vehicles including
$15,000 aggregate including med-
motorcycles.
ical and rehabilitation expenses; up
to $800 a month for loss of income;
up to $800 a month for essential
services and survivors' loss; $1,500
funeral expense. (Optional de-
ductibles available.) No provision
for Property Damage coverage.
Kansas*
1/1/74
Private passenger vehicles and
$2,000 medical expense; $2,000 re-
commercial vehicles which do not
habilitation expense; 100% loss of
have a K.C.C. permit. Motorcy-
income up to $650 a month (85%
cles are optional.
if not subject to Federal income
tax) subject to a one year time
limit; $12 a day for essential serv-
ices incurred during the lifetime of
the injured person but not to ex-
ceed 365 days after the date of the
first expense; survivors' benefits
not to exceed $650 a month for one
year less the number of months
the decedent received work loss
benefits prior to death; $1,000
funeral expenses. (Options for
higher coverage available.) No
provision for Property Damage
coverage.
*The original Kansas no-fault law was declared unconstitutional, but shortly afterward, a new law was introduced. On
appeal, the Kansas supreme court declared both laws constitutional but cited the new law as the better one.
F.C.&S. BULLETINS
Auto (Casualiy)
NO-FAULT AUTOMOBILE INSURANCE
Casualty & Surety Section
Nof-7
September, 1974
Modified No-Fault Laws
Limitation on Right to Sue
Remarks
Suit barred unless injury results in death, significant,
No-fault benefits primary over Health insurance
permanent loss of a body part or function, permanent,
benefits.
serious disfigurement, or if expenses exceed the med-
ical-rehabilitative limit or if maximum first party
benefits are exhausted. Also, if medical expenses ex-
ceed $1,500, the injured party may sue. The threshold
will be in effect for one year, after which time it will
be reviewed.
Suit barred unless injury results in death, permanent
No-fault benefits follow an insure wherever he drives
disfigurement, fracture of a weight bearing bone, com-
in the United States or Canada and nonresidents
pound, comminuted, displaced or compressed fracture,
driving in Kansas must have insurance which meets
loss of a body member, permanent loss of a body func-
the requirements of the Kansas law. (Companies
tion or unless medical expenses reach or exceed a rea-
authorized to write insurance in the state must auto-
sonable value of $500.
matically provide that all policies, wherever issued,
comply with the Kansas law when the vehicle is in
that state.) Benefits received under no-fault are re-
duced by benefits payable under Workmen's Com-
pensation insurance.
(Continued on next page.)
conn
Auto (Casualty)
NO-FAULT AUTOMOBILE INSURANCE
F.C.& S. BULLETINS
Nof-8
September, 1974
State-By-State Modified No-Fault Laws
State
Effective Date
Vehicles Included
Basic Coverage
Kentucky*
7/1/75
Private passenger and commercial
$10,000 aggregate including med-
vehicles.
ical expense; loss of income not to
exceed $200 a week; essential serv-
ices; survivors' benefits; $1,000
funeral expenses. (Optional de-
ductibles and higher coverage avail-
able.) No provision for Property
Damage coverage.
Massachusetts
1/1/71
All motor vehicles.
$2,000 aggregate for medical, hos-
pital and funeral expenses; up to
75% loss of income; essential serv-
ices expense.
*Kentucky's no-fault law is optional in that it can be rejected, in which case, the motorist would resort to the traditional
fault system for recovery of medical expenses. In addition, the motorist could take the no-fault coverage without relinquishing
the right to sue.
F.C.&S. BULLETINS
Auto (Casualty)
NO-FAULT AUTOMOBILE INSURANCE
Casualty & Surety Section
Nof-9
September, 1974
Modified No-Fault Laws
Limitation on Right to Sue
Remarks
Suit barred unless injury results in death, disfigure-
ment, dismemberment, permanent disability, serious
bone fracture or unless medical expenses exceed $1,000.
Kentucky's law is optional and insured may purchase
basic no-fault benefits and still retain first dollar right
to sue.
Suit barred unless injury results in death, disfigure-
Law provides for three Physical Damage options
ment, loss of sight or hearing, fracture or unless med-
under Property Protection insurance: rejection of
ical expenses exceed $500.
coverage; all risks coverage which is comparable to
standard Collision coverage; restricted coverage,
payable only when the other driver is considered
primarily negligent. An amendment to Property
Protection insurance, effective January 1, 1974, re-
quires that an insured who elects either the all risks
or restricted coverage has the option of recovering
full payment without regard to comparative negli-
gence or any deductible, provided that the insured's
negligence is 50% or less.
Persons entitled to Workmen's Compensation bene-
fits are not entitled to no-fault benefits. Medical Pay-
ments and Uninsured Motorists coverage provide
protection for out-of-state accidents.
(Continued on next page.)
Auto (Casualty)
NO-FAULT AUTOMOBILE INSURANCE
F. C. & S. BULLETINS
Nof-10
September, 1974
State-By-State Modified No-Fault Laws
State
Effective Date
Vehicles Included
Basic Coverage
Michigan*
10/1/73
All motor vehicles except two-
Unlimited medical and rehabilita-
wheeled motorcycles.
tion expenses; 85% loss of income
not to exceed $1,000 a month for
three years; $20 a day for up to
three years for essential services;
survivors' benefits not to exceed
$1,000 a month for up to three
years; $1,000 funeral expenses.
Combined benefits for income loss,
essential services and survivors'
benefits are limited to $36,000 and
three years. (Optional deductible
available.)
Minnesota
1/1/75
All motor vehicles. Motorcycles
$20,000 medical expenses; $10,000
are exempt but basic coverage
for other economic loss including;
must be offered to the owners of
85% loss of income not to exceed
motorcycles.
$200 a week; $15 a day for essen-
tial services; $1,250 for death bene-
fits. (Optional deductibles avail-
able.) No provision for Property
Damage coverage.
*A Michigan circuit court recently rendered an opinion that the no-fault law's basic Personal Injury Protection coverage is
constitutional. The court did, however, declare six areas of the law unconstitutional, including the property damage section.
The opinion is not binding and a judgment on this matter is expected soon.
F.C.&S. BULLETINS
Auto (Casualty)
NO-FAULT AUTOMOBILE INSURANCE
Casualty & Surely Section
Nof-11
September, 1974
Modified No-Fault Laws
Limitation on Right to Sue
Remarks
Suit barred unless injury results in death, serious im-
Property Protection insurance provides a $1,000,000
pairment or body function, permanent serious disfigure-
limit for damage to a properly parked vehicle or
ment or when actual economic loss exceeds the benefits
fixed property such as a building. This provision
provided by the law. (If expenses exceed $1,000 a
eliminates fault recovery for damage to a vehicle un-
month, injured person can sue to recover the excess.)
less it is properly parked. Two variations of stand-
There is no dollar-amount threshold which is one of the
ard Collision coverage are offered; a broadened form
reasons Michigan's law is the most liberal to date.
and a limited form, the latter form applying only
when the other driver is at fault. (The Property
Damage provision is one of the six areas of the law
which is believed to be unconstitutional. See foot-
note.) Benefits payable by Federal or state laws
such as Social Security or Workmen's Compensation
insurance are primary and are subtracted from bene-
fits recoverable under the no-fault coverage.
Presently, the insured has the option of making his
Health insurance primary but duplication of benefits
is also permitted. Benefits follow an insured wher-
ever he drives in the United States or Canada and
nonresidents driving in Michigan are covered if their
insurers have certified that their policies comply with
the Michigan law.
Suit barred unless injury results in death, permanent
injury or disfigurement, disability of more than 60 days
or unless medical expenses exceed $2,000.
(Continued on next page)
FORD
Auto (Casualty)
NO-FAULT AUTOMOBILE INSURANCE
F. C. & S. BULLETINS
Nof-12
September, 1974
State-By-State Modified No-Fault Laws
State
Effective Date
Vehicles Included
Basic Coverage
Nevada
2/1/74
All motor vehicles except motor-
$10,000 aggregate for medical and
cycles, government vehicles and
rehabilitation expenses; 85% loss
vehicles subject to the licensing
of income not to exceed $175 a
requirements of the Interstate
week; $18 a day for up to 104
Highway User Act which are not
weeks for essential services (not
based in the state. Vehicles owned
recoverable if injured person col-
by persons eligible for Medicare
lects loss of income benefits); sur-
are exempt but basic coverage
vivors' benefits of $5,000 or the
must be offered to them.
amount the insured would have re-
covered for income loss benefits for
one year had he survived, which-
ever is greater; $1,000 funeral ex-
penses. (Optional higher coverage
and deductibles available.) No pro-
vision for Property Damage cov-
erage.
New Jersey
1/1/73
Private passenger vehicles includ-
Unlimited medical and hospital ex-
ing pick-up, delivery sedan or
penses; $100 a week loss of income
panel truck type vehicles owned
with a maximum of $5,200; $12 a
by an individual and not custo-
day essential services with a max-
marily used in the business, pro-
imum of $4,380, performed by an
fession or occupation of the in-
injured non-wage earner; $1,000
sured, except in farming opera-
funeral expenses. (Optional high-
tions.
er coverage is available.) No pro-
vision for Property Damage cov-
erage.
F.C.&S. BULLETINS
Auto (Casualty)
NO-FAULT AUTOMOBILE INSURANCE
Casualty & Surety Section
Nof-13
September, 1974
Modified No-Fault Laws
Limitation on Right to Sue
Remarks
Suit barred unless injury results in death, chronic or
No-fault benefits are reduced by benefits payable un-
permanent injury, permanent partial or permanent
der Social Security or Workmen's Compensation in-
total disability, disfigurement, more than 1S0 days of
surance.
inability to work, fracture of a major bone, dismember-
Coverage follows the insured wherever he drives in
ment, permanent loss of a body function or unless
the United States, Canada or Mexico. Nonresidents
medical expenses exceed $750. Also, when expenses
driving in Nevada are entitled to no-fault benefits if
for any one of the benefits provided by the law exceed
they have a complying policy in effect.
the individual benefit limit, the injured person may sue
for the excess. For example, if an injured person's
income loss exceeds the $175 weekly maximum pro-
vided by the law, he can sue for that portion which is
not recovered.
Suit barred unless injury results in death, permanent,
Benefits received under Workmen's Compensation
significant disfigurement, permanent loss of any body
laws, Disability Benefits statutes or Medicare are de-
function, loss of a body member or unless medical ex-
ducted from no-fault recoveries.
penses - for actual treatment only - exceed $200
Benefits follow the insurer wherever he drives in the
(exclusive of hospital expenses, x-rays and other
United States or Canada but nonresidents driving in
diagnostic expenses).
New Jersey are not entitled to no-fault benefits under
the New Jersey law.
(Continued on next paga)
Auto (Casualty)
NO-FAULT AUTOMOBILE INSURANCE
F. C. & S. BULLETINS
Nof-14
September, 1974
State-By-State Modified No-Fault Laws
State
Effective Date
Vehicles Included
Basic Coverage
New York
2/1/74
All motor vehicles, including fire
$50,000 aggregate for medical, hos-
and police vehicles but excluding
pital and rehabilitation expenses
motorcycles.
(funeral expenses not included);
up to $1,000 a month loss of income
for as long as three years; after
a 20% reduction to reflect income
tax, the most an injured person can
collect is $800 a month; $25 a day
for one year for essential services.
(Options for higher coverage, in-
cluding funeral expenses, out-of-
state coverage and a family deducti-
ble are available.) No provision
for Property Damage coverage.
Pennsylvania
7/19/75
All motor vehicles. Owners of
Unlimited medical expenses;
motorcycles required to carry
$15,000 loss of income. No provi-
Automobile Liability insurance
sion for Property Damage cover-
and contribute to assigned claims
agè.
plan. No-fault benefits do not ap-
&
ply, but motorcycle owner retains
first-dollar right to sue.
Utah
1/1/74
All motor vehicles except motor-
$2,000 medical expenses; 85% of
cycles.
loss of income not to exceed $150 a
week for as long as 52 weeks (pay-
ments subject to a three day wait-
ing period unless inability to work
exceeds 14 days at which time the
waiting period is eliminated); $12
a day for essential services; $1,000
funeral expenses; $2,000 survivors'
benefits. (Options for higher cov-
erage and deductibles are avail-
ablc.) No provision for Property
Damage coverage.
FORD
Auto (Casualty)
NO-FAULT AUTOMOBILE INSURANCE
F. C. & S. BULLETINS
Nof-14
September, 1974
State-By-State Modified No-Fault Laws
State
Effective Date
Vehicles Included
Basic Coverage
New York
2/1/74
All motor vehicles, including fire
$50,000 aggregate for medical, hos-
and police vehicles but excluding
pital and rehabilitation expenses
motorcycles.
(funeral expenses not included);
up to $1,000 a month loss of income
for as long as three years; after
a 20% reduction to reflect income
tax, the most an injured person can
collect is $800 a month; $25 a day
for one year for essential services.
(Options for higher coverage, in-
cluding funeral expenses, out-of-
state coverage and a family deducti-
ble are available.) No provision
for Property Damage coverage.
Pennsylvania
7/19/75
All motor vehicles. Owners of
Unlimited medical expenses;
motorcycles required to carry
$15,000 loss of income. No provi-
Automobile Liability insurance
sion for Property Damage cover-
and contribute to assigned claims
age.
plan. No-fault benefits do not ap-
&
ply, but motorcycle owner retains
first-dollar right to sue.
Utah
1/1/74
All motor vehicles except motor-
$2,000 medical expenses; 85% of
cycles.
loss of income not to exceed $150 a
week for as long as 52 weeks (pay-
ments subject to a three day wait-
ing period unless inability to work
exceeds 14 days at which time the
waiting period is eliminated); $12
a day for essential services; $1,000
funeral expenses; $2,000 survivors'
benefits. (Options for higher cov-
erage and deductibles are avail-
able.) No provision for Property
Damage coverage.
Auto (Casualty)
Nof-14
NO-FAULT AUTOMOBILE INSURANCE
F. C. & S. BULLETINS
September, 1974
State-By-State Modified No-Fault Laws
State
Effective Date
Vehicles Included
Basic Coverage
New York
2/1/74
All motor vehicles, including fire
$50,000 aggregate for medical, hos-
and police vehicles but excluding
pital and rehabilitation expenses
motorcycles.
(funeral expenses not included);
up to $1,000 a month loss of income
for as long as three years; after
a 20% reduction to reflect income
tax, the most an injured person can
collect is $800 a month; $25 a day
for one year for essential services.
(Options for higher coverage, in-
cluding funeral expenses, out-of-
state coverage and a family deducti-
ble are available.) No provision
for Property Damage coverage.
Pennsylvania
7/19/75
All motor vehicles. Owners of
Unlimited medical expenses;
motorcycles required to carry
$15,000 loss of income. No provi-
Automobile Liability insurance
sion for Property Damage cover-
and contribute to assigned claims
agè.
plan. No-fault benefits do not ap-
ply, but motorcycle owner retains
first-dollar right to sue.
Utah
1/1/74
All motor vehicles except motor-
$2,000 medical expenses; 85% of
cycles.
loss of income not to exceed $150 a
week for as long as 52 weeks (pay-
ments subject to a three day wait-
ing period unless inability to work
exceeds 14 days at which time the
waiting period is eliminated); $12
a day for essential services; $1,000
funeral expenses; $2,000 survivors'
benefits. (Options for higher cov-
erage and deductibles are avail-
able.) No provision for Property
Damage coverage.
F.C.&S. BULLETINS
Auto (Casualty)
NO-FAULT AUTOMOBILE INSURANCE
Casualty & Surety Section
Nof-15
September, 1974
Modified No-Fault Laws
Limitation on Right to Sue
Remarks
Suit barred unless injury is serious. Serious injury is
Benefits received under Workmen's Compensation or
defined as personal injury which results in death, dis-
Social Security laws are deducted from no-fault
memberment, significant disfigurement, a compound or
benefits. Medical Payments coverage is excess over
comminuted fracture, permanent loss of use of a body
no-fault coverage.
organ, member, function or system or where medical
Out-of-state coverage is not automatic but is avail-
expenses exceed $500. Additionally, when the com-
able as an option. Nonresidents driving in New York
bination of medical expenses, lost earnings and other
are required to have the basic no-fault protection pro-
expenses exceed the $50,000 maximum provided by
vided under the New York law and automatically
the law, or when actual lost earnings, before the 20%
have this coverage if their insurers are authorized to
reduction, exceed $1,000 a month or where other ex-
write insurance in New York.
penses exceed $25 a day, the injured person may sue
for the excess.
Suit barred unless injury results in death, serious and
Automobile Liability insurance with limits of
permanent injury, 60 days of continuous disability and
$15,000/30,000 Bodily Injury and $5,000 Property
permanent, severe and irreparable cosmetic disfigure-
Damage is now mandatory.
ment, or unless medical expenses exceed $750.
Pennsylvania motorists have the no-fault benefits
anywhere in the United States. If nonresidents are
without no-fault benefits through their own policies,
they are entitled to benefits under Pennsylvania's law.
No-fault benefits reduced by benefits recoverable
under Workmen's Compensation insurance. Insured
has option of making Health benefits or no-fault
benefits primary with a reduction in premium for the
coverage not chosen.
Uninsured injured person entitled to recover under
assigned claims plan - subject to $500 deductible for
each year uninsured.
Suit barred unless injury results in death, dismember-
Benefits received under Workmen's Compensation
ment or fracture, permanent disability, permanent
insurance are deducted from benefits recoverable
disfigurement or unless medical expenses exceed $500.
under no-fault insurance.
Out-of-state coverage is available as an option. Non-
residents driving in Utah must secure insurance pro-
viding the benefits of the law if the vehicle is present
in the state for more than 90 days.
F.C.&S. BULLETINS
Auto (Casualty)
NO-FAULT AUTOMOBILE INSURANCE
Casualty & Surety Section
Nofa-1
September, 1974
Expanded Medical Payments And Disability Benefits Plans
Since these plans provide no-fault benefits in the form of additional first-party
coverage, but do not in any way restrict the right to sue, they are often referred to
as Add-On No-Fault laws. The fact remains that the use of tort liability is not
impaired, and hence, the laws, for purposes of this discussion, are classed as Ex-
panded Medical Payments and Disability Benefits plans rather than Modified No-
Fault plans. The Modified No-Fault plans are discussed on Nof-1 and following.
The Add-On plans of Arkansas, South Dakota, Texas and Virginia are volun-
tary programs where the insured can reject no-fault benefits, but must do so in
writing. Oregon's plan is voluntary, but no-fault benefits must be provided in
liability policies covering private passenger vehicles.
(Continued on next page.)
FORD
Auto (Casualty)
NO-FAULT AUTOMOBILE INSURANCE
F.C.&S. BULLETINS
Nofa-2
September, 1974
C
Expanded Medical Payments And Disability Benefits Plans
State
Effective Date
Vehicles Included
Basic Coverage
Arkansas
7/1/74
Private passenger vehicles.
$2,000 for medical and hospital ex-
penses up to 24 months (hospital
room charge limited to semi-private
rate); 70% of income loss not to
exceed $140 a week for up to one
year, subject to an eight day wait-
ing period; $70 a week to non-
income earner for essential services
for up to one year, also subject to
eight day waiting period; $5,000
death benefit. (Optional higher
coverage available.)
C
Delaware
1/1/72
All motor vehicles.
$10,000 per person, $20,000 aggre-
gate for medical and hospital ex-
penses, income loss and essential
services expense; $2,000 funeral
expenses and $5,000 for damage to
property other than a motor vehicle.
(Options for deductibles and higher
coverage available.)
C
C
FORD
F.C.&S. BULLETINS
Auto (Casualty)
NO-FAULT AUTOMOBILE INSURANCE
Casualty & Surety Section
Nofa-3
September, 1974
Add-On Plans
Limitation on Right to Sue
Remarks
No restriction, but in the event of a liability recovery
Coverage applies to occupants of the insured vehicle
by the insured, the insurer paying no-fault benefits is
and to pedestrians struck by the insured vehicle, pro-
entitled to reimbursement- - to the extent of these
vided they are not covered as insureds under their
benefits - from the proceeds of the liability settlement.
own policy.
Intentional injury and injury sustained while com-
mitting a felony or while fleeing lawful apprehension
or arrest are excluded.
No restriction, but no-fault insurer has right of subro-
Coverage applies to occupants of the insured vehicle.
gation against negligent party.
Pedestrians are covered by the insurer of the vehicle
which strikes them. If the vehicle is uninsured, COV-
erage provided under their own Uninsured Motorists
insurance. Coverage for property damage, including
loss of use, also is provided under the Uninsured
Motorists provision. The Property Damage coverage
is subject to a deductible of at least $250. Intentional
injury or injury sustained through participation in a
racing or speed contest is excluded.
(Continued on next page.)
Auto (Casualty)
NO-FAULT AUTOMOBILE INSURANCE
F.C. & S. BULLETINS
Nofa-4
September, 1974
C
Expanded Medical Payments And Disability Benefits Plans
State
Effective Date
Vehicles Included
Basic Coverage
C
Maryland
1/1/73
All motor vehicles, optional for
$2,500 aggregate for medical, hos-
motorcycles.
pital and funeral expenses; loss of
income; and loss of services which
are incurred within three years of
the date of accident. Insured has
the option of purchasing equivalent
benefits from a non-profit health
service plan. (Options for higher
coverage available.)
C
&
Oregon
1/1/72
Private passenger vehicles; motor-
$3,000 for medical and hospital ex-
cycles excluded.
penses (deductibles up to maxi-
mum of $250 available but only
apply to named insured and resi-
dent relatives); 70% of income
loss subject to a 14 day waiting
period and maximum of $500; loss
of services of $12 a day for persons
not employed who incur expenses.
C
C
F.C.&S. BULLETINS
Auto (Casualty)
NO-FAULT AUTOMOBILE INSURANCE
Casualty & Surety Section
Nofa-5
September, 1974
Add-On Plans
Limitation on Right to Sue
Remarks
No restriction.
Coverage applies to occupants of the insured vehicle.
Pedestrians recover from the vehicle owner's policy
- unless no-fault benefits are not in effect, in which
case the injured party recovers from his own policy.
No reduction for benefits received from any other
source, except Workmen's Compensation insurance.
Insurer has no right of subrogation. Intentional in-
jury, injury sustained while using a stolen vehicle
or while committing a felony are excluded.
No restriction, but any liability recovery is subject to
Coverage applies to named insured and resident rela-
reduction by amount of no-fault benefits paid.
tives and also to occupants of the insured vehicle and
to pedestrians struck by it. Intentional injury or
injury sustained while participating in racing or speed
contests are excluded.
No-fault benefits reduced by benefits payable under
Workmen's Compensation insurance. Coverage of
guest passengers and pedestrians is excess over any
other collateral benefits
Comparative negligence substituted for contributory
negligence.
(Continued on next page)
FORD
Auto (Casualty)
Nofa-6
NO-FAULT AUTOMOBILE INSURANCE
F.C.&S. BULLETINS
September, 1974
C
Expanded Medical Payments And Disability Benefits Plans
State
Effective Date
Vehicles Included
Basic Coverage
South Carolina
10/1/74
All motor vehicles.
$1,000 aggregate for medical ex-
penses, disability and economic loss.
(Optional higher limits available.)
C
South Dakota
1/1/72
All motor vehicles except motor-
$2,000 medical and funeral ex-
cycles.
penses; minimum of $60 a week
for loss of income for up to one
year, subject to a 50% reduction if
insured is unemployed; $10,000
accidental death benefits.
(
FORD
F.C. & S. BULLETINS
Auto (Casualty)
NO-FAULT AUTOMOBILE INSURANCE
Casualty & Surety Section
Nofa-7
September, 1974
Add-On Plans
Limitation on Right to Sue
Remarks
No restriction, but in the event of a tort liability re-
A reinsurance facility - which provides coverage
covery, insurer is entitled to reimbursement for the
equal to that of the voluntary market, including Un-
amount of no-fault benefits paid.
insured Motorists coverage- - replaces the Assigned
Risk plan.
Automobile Liability insurance is mandatory with
limits of $15,000/30,000 Bodily Injury and $5,000
Property Damage.
There is also a provision for an assigned claims plan.
No-fault benefits are reduced by benefits payable
under Workmen's Compensation insurance.
No restriction.
Duplicate payments from other sources permitted.
(Continued on next page.)
Auto (Casualty)
NO-FAULT AUTOMOBILE INSURANCE
F.C. & S. BULLETINS
Nofa-8
September, 1974
Expanded Medical Payments And Disability Benefits Plans
State
Effective Date
Vehicles Included
Basic Coverage
Texas
8/27/73
All motor vehicles.
$2,500 aggregate including medical,
hospital and funeral expenses in-
curred within three years of date
of accident; 80% of income loss;
loss of services with no limitation
other than the limit of the policy.
(Options for higher coverage up to
$10,000 available.)
Virginia
1/1/72
All motor vehicles.
$2,000 for medical and funeral ex-
penses; up to $100 a week for loss
of income for one year.
FORD
F.C.&S. BULLETINS
Auto (Casualty)
NO-FAULT AUTOMOBILE INSURANCE
Casualty & Surety Section
Nofa-9
September, 1974
Add-On Plans
Limitation on Right to Sue
Remarks
No restriction, but an insurer which has paid no-fault
Coverage applies to the named insured, resident rela-
benefits to an occupant of the insured vehicle is entitled
tives and occupants of the insured vehicle.
to an offset against any liability recovery by such
Insurer has no right of subrogation. No reduction
occupant, to the extent of no-fault benefits paid.
for benefits payable under Workmen's Compensation
insurance or any other source of medical, hospital or
wage continuation benefits; but recovery under
Bodily Injury Liability or Uninsured Motorists cov-
erage is reduced by benefits received under no-fault
Automobile coverage. Intentionally caused injury or
injury sustained while committing a felony or while
fleeing lawful apprehension or arrest is excluded.
No restriction.
FUND
(2)
AUTOMOBILE INSURANCE PRICES
UNDER THE NO-FAULT SYSTEM
A Report to Governor Hugh L. Carey and
the New York State Legislature
January 15, 1975
NEW YORK INSURANCE DEPARTMENT
Two World Trade Center
324 State Street
New York, New York 10047
Albany, New York 12210
AUTOMOBILE INSURANCE PRICES UNDER THE NO-FAULT SYSTEM
New York's no-fault automobile insurance law, which was
enacted in February, 1973, became applicable on February 1, 1974, to
motor vehicle accidents occurring in New York.
The two basic features of the law are that:
-- each automobile insurance policy is required
to provide benefits of up to $50,000 in medi-
cal expenses and wage losses for any person
injured by the auto regardless of fault; and
-- an injured person, in exchange for the guaran-
teed payment of basic losses, loses his right
to sue for "pain and suffering" unless he suf-
fers a serious injury.
The law contained many other provisions, which further defined
these basic features, expressed other related no-fault purposes, and re-
quired the Insurance Department to take various administrative actions to
fully implement the new no-fault system.
On October 10, 1974, the Insurance Department issued a report
entitled, "Implementation of the No-Fault Automobile Insurance Law."
That report concluded that no-fault was performing "the way its sponsors
(including the Insurance Department) said it would," and that "the initial
implementation of the no-fault law was accomplished with remarkably few
problems, and no major unanticipated problems have arisen during the first
eight months of its operation."
2.
This report 1s the second of three annual reports on the
price of automobile insurance under no-fault. It is submitted
pursuant to Section 677(3) of the Insurance Law, which requires the
Department, on or before January 15, 1974, 1975 and 1976, to report
to the Governor and the Legislature on the prices insurance companies
charge for automobile personal injury insurance coverages.
One of the objectives of the no-fault law was to bring about
substantial savings in the prices paid by New Yorkers for automobile
personal injury insurance. To accomplish this objective, the law re-
quired, among other things, that (i) certain reductions in rates be
made at the inception of the no-fault system, (ii) rates be filed with
and approved by the Insurance Department, and (iii) three annual reports
on prices and personal injury insurance be made to the Governor and the
Legislature.
The second no-fault price report follows.
Legislation Enacted in 1974 Affecting Auto Insurance Rates
On January 29, 1974, the Insurance Department issued a report
entitled, the "Impact of the Energy Crisis on Automobile Insurance Rates."
In that report, the Department recommended the enactment of legislation to
assure that automobile insurance policyholders, rather than insurance
companies, would benefit from any lower loss experience that may result
from the energy crisis.
Legislation recommended by the Department became law on May 20,
1974. Among other things, the new "energy crisis" legislation provided
that:
3.
-- Insurance Department prior approval will not
be required for any rate change which would
result in rate levels lower than those in ef-
fect on February 1, 1974; and
-- the Insurance Department would not approve any
increase in rate levels above those in effect
on February 1 to take effect prior to September
1, 1974.
In other words, automobile insurance rate increases were
prohibited by the new law until September 1, 1974. In addition, the law
also encouraged insurance companies to lower their rates voluntarily, by
permitting reductions from February 1, 1974 rate levels without Insurance
Department approval, and by allowing a subsequent restoration of such de-
creases (but no increase beyond February 1, 1974 levels) without prior
approval.
Department Rate Revision Policy Since September 1, 1974
After September 1, 1974, all rate increases became subject to
the Department's prior approval, although under the "energy crisis" law
rate decreases can be instituted without Department action.
Since September 1, 1974, the Department has received and ap-
proved a number of rate increases for automobile physical damage coverages,
where the increase was properly supported by credible experience. Because
the no-fault law does not apply to property damage, loss experience prior
to the no-fault law can be used for supporting these rate changes.
4.
The Department has not approved, however, any rate
increases for bodily injury liability and no-fault insurance cover-
ages and will not approve any until meaningful and fully supported
no-fault experience is available. Pre-no-fault experience cannot be
relied upon to support rate changes for these coverages, because the
underlying system has been radically changed by no-fault.
Initial Rates and Savings
On October 17, 1973, the Department issued regulations estab-
lishing general rules applicable to rates for basic and optional no-fault
coverages.' Thereafter, the Department received and processed rate filings
from all companies. On January 15, 1974, as required by law, the Depart-
ment filed with the Governor and the Legislature a report on "Price Re-
ductions Resulting from Enactment of No-Fault Insurance".
The results, comparing rates for personal injury insurance in
effect on January 1, 1973 with those in effect on February 1, 1974, were
as follows:
-- for basic personal injury insurance, where the
statute required a 15% reduction, the actual
reduction averaged more than 19%;
-- for all kinds of personal injury insurance,
including optional as well as basic coverage,
the average actual reduction was about 13%;
-- in dollar terms, New Yorkers would save about
$100 million annually based on the actual
no-fault rates; and
5.
-- the "average" driver would save about $15
annually on each vehicle.
The report pointed out that the annual savings for a
particular individual would range widely from this "average", de-
pending on where he lived, the company he was insured with, the kind
of coverage he bought and many other factors. The report contained a
pre-and post-no-fault listing of premiums charged by the 15 largest
companies and the automobile assigned risk plan for "typical" drivers
purchasing various combinations of insurance and residing in different
parts of the State. A total of 1,536 actual comparisons were shown.
The annual $100 million savings achieved under no-fault in-
clude the cost of optional coverages. If no optional coverages were
purchased, the annual savings on a statewide basis would have been $130
million, about $30 million more than the Insurance Department had pre-
dicted at the time of the law's enactment. The actual savings are $100
million because New Yorkers have elected to spend a total of $30 million
for extra coverages.
Refunds
In addition to savings on policy renewals, some policyholders
received refunds on existing policies. Policyholders who had purchased
auto insurance prior to February 1, 1974 were entitled to receive a re-
fund or credit in the amount of the difference between what they had al-
ready paid for the post-February 1 period and what they would have paid
for such period based on the lower rates which took effect February 1.
6.
The law provided that these refunds had to be made no
later than the next renewal date of the policy. By Department regu-
lation, they were required by the earliest of:
-- a policyholder's specific request,
-- June 1, 1974 for refunds greater than $5, or
-- the next renewal date of the policy.
New York policyholders have received approximately $45 million
in cash refunds or credits on auto policies in effect on February 1, 1974.
Although larger premium savings than expected resulted from
the law, there has been some consumer confusion because many have failed
to distinguish between annual savings, and refunds or credits on policies
in existence at the time no-fault went into effect.
This distinction can be illustrated by considering the example
of a policyholder who purchased a policy for a one-year period beginning
May 1, 1973 for a premium of $100. Based on one company's no-fault rates,
his renewal premium on May 1, 1974 was $84, an annual savings of $16.
This policyholder also received a refund, since he had paid for
the quarter-year period from February 1, to May 1, 1974 at the old, pre-
no-fault rate of $100. The refund was one-fourth of the annual $16 savings,
or $4. This example illustrates that, in cases where policies expired
shortly after February 1 or were issued on a semi-annual or quarterly basis,
refunds may have been small, even though annual savings are substantial.
No-Fault Rate Changes Since February 1
As noted earlier, no-fault insurance rates have not increased
since no-fault's advent in February 1974.
7.
However, there have been auditional rate reductions, with
15 automobile carriers having reduced personal injury insurance premiums
for some or all of their policyholders. These downward rate revisions
had an approximate 1/2% effect on the total statewide rate level. Put
another way, New York policyholders will realize a further annual premium
savings of some $3,000,000 in addition to the savings resulting from the
initial no-fault rate reductions. The private passenger auto insurance
reductions made by these 15 insurance companies are as follows:
Company's Share
Effective
Rate Level
of Market
Date
Reduction
5.0%
Aetna C & S
2/1/74*
3.0%
1.5%
Allcity Insurance
4/1/74
4.3%
-
City Insurance Co.
4/1/74
2.0%
2.4%
Empire Mutual
4/1/74
3.5%
1.7%
Utica Mutual
4/1/74
2.2%
.7%
Country-Wide
5/1/74
4.5%
2.3%
Liberty Mutual Fire
6/1/74
1.2%
-
N.Y. Central Mutual
6/15/74
15.0%
5.4%
Hartford A & I
8/1/74
.5%
.9%
Unigard Jamestown
8/26/74
.7%
.5%
Public Service
9/1/74
7.5%
2.1%
Royal Globe Companies
9/1/74
1.1%
1.2%
General Accident
9/24/74
.6%
.9%
Reliance Insurance
10/1/74
2.8%
.8%
Aetna Insurance Co.
12/31/74
1.7%
*
This "car-pool" rate reduction, was initiated by the company subsequent
to its "go-in" no-fault rate application, and was put into effect along
with the initial no-fault rate reduction.
8.
Although the noted reductions are expressed as a per-
centage of the companies' total personal injury premiums, most of
these rate changes affected only some of the policyholders of these
companies. Only five companies - Hartford and Utica Mutual (the 2nd
and 12th largest auto insurers in the State), and the Aetna Insurance
Company, Public Service Mutual and Reliance Insurance Company - have
instituted general rate reductions affecting most or all of their
policyholders. The remaining reductions consist of changes in rating
rules and classifications which generally do not affect most policy-
holders. Among the reasons for these adjustments are favorable loss
experience before the no-fault law became effective and some antici-
pated savings due to reduced driving caused by the energy crisis. No
insurer has yet reduced its personal injury rates because of realized
favorable no-fault results. Normally, reliable insurance statistics
usable for rate making purposes do not become available for six months
after the close of the calendar year.
Related No-Fault Savings
The no-fault law provides that no-fault benefits are payable
regardless of the existence of other insurance or benefits -- such as
Blue Cross or Blue Shield, major medical insurance, disability income
insurance, or sick pay or sick leave granted by an employer.
The only exceptions are Social Security disability benefits
(the federal program that provides a disability benefit six months after
a disability occurs) and workmen's compensation. No-fault benefits will
be paid only for what is not covered by workmen's compensation or Social
Security disability benefits.
9.
Most New Yorkers have health insurance coverages which
duplicate benefits provided by no-fault. If this duplication were
entirely eliminated, New Yorkers' health insurance premiums would
be reduced by approximately $75 million a year. (This, of course,
would be in addition to the savings already realized on automobile
insurance.)
To help realize this potential, the Department has notified
all insurers licensed to write accident, health and disability insurance
that non-duplication of health insurance and no-fault insurance benefits
should be encouraged, and had prepared for their use a standard exclusion
clause. The exclusion of no-fault benefits must be accompanied by either
a rate reduction or a commensurate increase in other benefits.
The Department has also required non-profit health carriers
(such as Blue Cross and Blue Shield plans) to exclude duplication of
no-fault automobile insurance benefits from their community-rated health
insurance contracts by February 1, 1975, except where duplication is
specifically requested by the policyholder. The elimination of this bene-
fit duplication should reduce health insurance premiums charged by these
carriers by about 2.5%.
Rate Comparisons
As in last year's report, this report shows the premiums charged
in actual dollars for personal injury insurance on private passenger auto-
mobiles by the fifteen largest automobile insurance companies and the auto-
mobile assigned risk plan in selected geographical areas; for two types of
drivers (the adult pleasure driver without accidents and the 20 year old
male with one chargeable accident); and for drivers who purchase different
10.
levels of coverage. Comparisons are made between rates charged as of
January 1, 1975 and those charged on January 1, 1973 for different
levels of coverage as follows:
-- minimum personal injury insurance.
This driver purchased the minimum compulsory
limits of bodily injury liability insurance
($10,000 per person and $20,000 per accident)
on January 1, 1973, and will purchase only
10/20 bodily injury and compulsory no-fault
1 with a $200 family deductible on January 1,
1975.
-- medium amount of insurance.
This driver purchased 25/50 bodily injury plus
$1,000 medical payments coverage on January 1,
1973, and will purchase 25/50 bodily injury
plus $1,000 excess medical payments plus
compulsory no-fault without a deductible on
January 1, 1975.
-- higher amount of insurance.
This driver purchased 100/300 bodily injury plus
$5,000 medical payments on January 1, 1973, and
will purchase 100/300 bodily injury plus $100,000
no-fault with work-loss benefits of up to $2,000
per month for in-state and out-of-state driving
on January 1, 1975.
The dollar prices and comparisons, which may be of interest to consumers
who wish to compare prices charged by various companies, are contained on
the following pages.
11.
ANNUAL PERSONAL INJURY AUTOMOBILE INSURANCE PREMIUMS
OF 15 LEADING INSURERS AND ASSIGNED RISK PLAN
UNDER NO-FAULT (1/1/75) AND PRIOR TO NO-FAULT (1/1/73)
BRONX COUNTY NORTH
Minimum Coverage
Medium Coverage
Higher Coverage
Company
1/1/75
1/1/73
1/1/75
1/1/73
1/1/75
1/1/73
Adult-Preferred Risk
Allstate
$ 80
$111
$102
$139
$122
$160
Hartford
97
112
123
146
157
175
Aetna Casualty
91
110
118
141
152
170
Government Employees
65
72
81
95
103
112
Travelers
94
114
117
144
148
171
State Farm Mutual
88
101
105
129
125
151
Empire Mutual*
81
102
99
132
126
154
Liberty Mutual Fire
78
99
99
124
127
145
Nationwide Mutual
84
96
104
124
126
144
Merchants Mutual
72
85
90
106
114
124
Ins. Co. of North America
90
111
112
139
142
163
Lumbermens Mutual Casualty
102
117
126
148
154
173
Utica Mutual*
77
114
93
142
119
167
General Accident
82
96
101
121
129
141
Boston Old Colony
84
101
105
126
132
148
Assigned Risk
79
89
103
121
126
133
Unmarried Male-Age 20-One Chargeable Accident
Allstate
$223
$329
$277
$390
$328
$444
Hartford
244
281
310
368
378
442
Aetna Casualty
229
276
297
355
366
429
Government Employees
141
162
176
208
212
242
Travelers
324
399
398
491
480
573
State Farm Mutual
340
398
404
491
450
573
Empire Mutual*
191
283
236
349
282
406
Liberty Mutual Fire*
201
330
252
416
303
479
Nationwide Mutual
244
287
300
356
351
414
Merchants Mutual
239
279
294
346
350
402
Ins. Co. of North America
239
307
298
377
360
438
Lumbermens Mutual Casualty
272
322
335
395
396
458
Utica Mutual*
193
330
234
414
282
487
General Accident
242
287
297
355
360
413
Boston Old Colony
211
253
264
317
316
373
Assigned Risk
228
266
299
352
344
389
*The January 1, 1975 rates for these companies are lower than the no-fault
"go-in" rates they charged on February 1, 1974. For the remaining companies,
12.
ANNUAL PERSONAL INJURY AUTOMOBILE INSURANCE PREMIUMS
OF 15 LEADING INSURERS AND ASSIGNED RISK PLAN
UNDER NO-FAULT (1/1/75) AND PRIOR TO NO-FAULT (1/1/73)
BRONX COUNTY SOUTH
Minimum Coverage
Medium Coverage
Higher Coverage
Company
1/1/75
1/1/73
1/1/75
1/1/73
1/1/75
1/1/73
Adult-Preferred Risk
Allstate
$ 97
$144
$123
$177
$147
$203
Hartford
137
161
173
206
217
246
Aetna Casualty
103
124
134
159
170
191
Government Employees
77
85
96
112
120
132
Travelers
121
148
149
185
186
218
State Farm Mutual
110
127
131
160
153
187
Empire Mutual*
97
124
119
157
149
184
Liberty Mutual Fire
91
114
115
142
146
166
Nationwide Mutual
107
122
132
155
157
181
Merchants Mutual
91
107
113
132
141
156
Ins. Co. of North America
117
130
143
163
178
189
Lumbermens Mutual Casualty
137
159
169
199
204
232
Utica Mutual*
97
137
119
169
149
199
General Accident
104
122
127
153
160
178
Boston Old Colony
107
128
133
159
165
187
Assigned Risk
102
118
135
159
162
175
Unmarried Male-Age 20-One Chargeable Accident
Allstate
$277
$431
$343
$504
$406
$574
Hartford
346
406
437
520
530
623
Aetna Casualty
259
312
336
401
413
482
Government Employees
164
192
204
243
245
282
Travelers
421
521
513
639
616
742
State Farm Mutual
426
502
505
614
560
716
Empire Mutual*
202
295
248
364
296
423
Liberty Mutual Fire*
217
304
272
378
327
437
Nationwide Mutual
308
368
380
452
442
522
Merchants Mutual
265
310
327
384
389
445
Ins. Co. of North America
313
359
381
439
458
508
Lumbermens Mutual Casualty
308
368
381
448
450
519
Utica Mutual*
244
345
300
426
358
503
General Accident
310
368
379
452
456
522
Boston Old Colony
270
322
335
401
398
472
Assigned Risk
300
356
394
464
450
514
*The January 1, 1975 rates for these companies are lower than the no-fault
"go-in" rates they charged on February 1, 1974. For the remaining companies,
January 1, 1975 rates are identical with the February 1, 1974 "go-in" rates.
13.
ANNUAL PERSONAL INJURY AUTOMOBILE INSURANCE PREMIUMS
OF 15 LEADING INSURERS AND ASSIGNED RISK PLAN
UNDER NO-FAULT (1/1/75) AND PRIOR TO NO-FAULT (1/1/73)
BROOKLYN
Minimum Coverage
Medium Coverage
Higher Coverage
Company
1/1/75
1/1/73
1/1/75
1/1/73
1/1/75
1/1/73
Adult-Preferred Risk
Allstate
$104
$141
$131
$174
$156
$200
Hartford
138
162
175
207
218
247
Aetna Casualty
116
140
150
179
190
214
Government Employees
87
98
108
128
135
150
Travelers
132
163
164
204
204
239
State Farm Mutual
108
124
129
156
151
183
Empire Mutual*
97
125
119
158
149
185
Liberty Mutual Fire
98
123
123
153
156
178
Nationwide Mutual
113
130
140
165
167
193
Merchants Mutual
90
105
111
130
139
152
Ins. Co. of North America
125
167
152
206
189
231
Lumbermens Mutual Casualty
126
146
155
183
188
214
Utica Mutual*
105
138
129
171
160
200
General Accident
111
130
137
163
171
189
Boston Old Colony
114
138
142
171
175
200
Assigned Risk
103
119
137
160
163
176
Unmarried Male-Age 20-One Chargeable Accident
Allstate
$296
$421
$366
$492
$433
$561
Hartford
341
408
441
523
535
625
Aetna Casualty
293
352
378
452
463
541
Government Employees
188
222
234
278
279
322
Travelers
460
571
561
700
674
813
State Farm Mutual
418
495
495
662
549
772
Empire Mutual*
198
290
244
358
291
416
Liberty Mutual Fire*
234
328
292
407
351
470
Nationwide Mutual
327
392
403
479
469
555
Merchants Mutual
259
305
320
376
381
427
Ins. Co. of North America
335
464
407
560
488
648
Lumbermens Mutual Casualty
289
345
356
422
421
490
Utica Mutual*
265
347
326
431
386
506
General Accident
329
392
403
479
485
556
Boston Old Colony
288
347
358
431
426
506
Assigned Risk
302
359
397
469
454
519
*The January 1, 1975 rates for these companies are lower than the no-fault
"go-in" rates they charged on February 1, 1974. For the remaining companies,
January 1, 1975 rates are identical with the February 1, 1974 "go-in" rates.
14.
ANNUAL PERSONAL INJURY AUTOMOBILE INSURANCE PREMIUMS
OF 15 LEADING INSURERS AND ASSIGNED RISK PLAN
UNDER NO-FAULT (1/1/75) AND PRIOR TO NO-FAULT (1/1/73)
MANHATTAN
Minimum Coverage
Medium Coverage
Higher Coverage
Company
1/1/75
1/1/73
1/1/75
1/1/73
1/1/75
1/1/73
Adult-Preferred Risk
Allstate
$ 85
$134
$108
$165
$129
$190
Hartford
112
130
141
168
178
201
Aetna Casualty
88
106
113
137
146
164
Government Employees
72
80
90
105
114
124
Travelers
108
133
134
167
168
197
State Farm Mutual
105
120
125
151
147
176
Empire Mutual*
94
119
115
152
144
178
Liberty Mutual Fire
90
106
114
132
145
155
Nationwide Mutual
.94
104
115
134
139
157
Merchants Mutual
80
94
98
116
124
136
Ins. Co. of North America
99
121
123
152
154
177
Lumbermens Mutual Casualty
131
150
159
187
192
218
Utica Mutual*
88
132
108
164
137
192
General Accident
90
104
110
132
140
155
Boston Old Colony
91
109
112
135
141
159
Assigned Risk
94
107
123
145
148
160
Unmarried Male-Age 20-One Chargeable Accident
Allstate
$239
$401
$296
$470
$351
$534
Hartford
282
327
356
424
433
507
Aetna Casualty
221
266
284
345
349
414
Government Employees
155
180
193
229
231
266
Travelers
376
465
460
571
554
664
State Farm Mutual
404
476
480
641
533
744
Empire Mutual*
194
284
239
351
286
408
Liberty Mutual Fire*
216
281
270
351
325
406
Nationwide Mutual
265
313
326
387
380
449
Merchants Mutual
232
273
285
336
341
391
Ins. Co. of North America
264
334
325
409
392
474
Lumbermens Mutual Casualty
294
351
364
429
430
496
Utica Mutual*
221
332
272
414
328
485
General Accident
264
313
323
385
391
446
Boston Old Colony
229
273
282
340
338
401
Assigned Risk
273
323
360
424
412
469
*The January 1, 1975 rates for these companies are lower than the no-fault
"go-in" rates they charged on February 1, 1974. For the remaining companies,
January 1, 1975 rates are identical with the February 1, 1974 "go-in" rates.
15.
ANNUAL PERSONAL INJURY AUTOMOBILE INSURANCE PREMIUMS
OF 15 LEADING INSURERS AND ASSIGNED RISK PLAN
UNDER NO-FAULT (1/1/75) AND PRIOR TO NO-FAULT (1/1/73)
QUEENS SUBURBAN
Minimum Coverage
Medium Coverage
Higher Coverage
Company
1/1/75
1/1/73
1/1/75
1/1/73
1/1/75
1/1/73
Adult-Preferred Risk
Allstate
$ 81
$ 96
$103
$121
$123
$140
Hartford
81
93
102
121
132
146
Aetna Casualty
81
95
103
123
134
149
Government Employees
70
78
88
103
111
122
Travelers
89
104
109
134
139
159
State Farm Mutual
84
95
100
122
119
142
Empire Mutual*
76
93
93
121
118
141
Liberty Mutual Fire
76
95
96
120
124
140
Nationwide Mutual
78
86
96
112
117
131
Merchants Mutual
77
88
95
111
120
130
Ins. Co. of North America
90
103
111
129
140
151
Lumbermens Mutual Casualty
98
112
122
143
149
168
Utica Mutual*
72
97
86
123
111
145
General Accident
76
86
93
111
119
131
Boston Old Colony
80
93
99
118
125
140
Assigned Risk
88
99
115
135
140
149
Unmarried Male-Age 20-One Chargeable Accident
Allstate
$261
$314
$324
$371
$383
$424
Hartford
239
273
301
357
367
432
Aetna Casualty
239
279
303
363
373
441
Government Employees
165
193
205
244
246
284
Travelers
382
454
464
562
556
651
State Farm Mutual
318
373
377
461
421
537
Empire Mutual*
170
251
210
312
252
362
Liberty Mutual Fire*
230
316
286
401
343
462
Nationwide Mutual
245
291
301
358
352
416
Merchants Mutual
254
291
312
366
371
424
Ins. Co. of North America
279
314
342
384
410
445
Lumbermens Mutual Casualty
264
314
326
385
387
446
Utica Mutual*
212
280
254
357
305
422
General Accident
247
290
301
358
365
417
Boston Old Colony
236
273
291
348
347
414
Assigned Risk
255
302
336
397
386
438
*The January 1, 1975 rates for these companies are lower than the no-fault
"go-in" rates they charged on February 1, 1974. For the remaining companies,
January 1, 1975 rates are identical with the February 1, 1974 "go-in" rates.
16.
ANNUAL PERSONAL INJURY AUTOMOBILE INSURANCE PREMIUMS
OF 15 LEADING INSURERS AND ASSIGNED RISK PLAN
UNDER NO-FAULT (1/1/75) AND PRIOR TO NO-FAULT (1/1/73)
STATEN ISLAND
Minimum Coverage
Medium Coverage
Higher Coverage
Company
1/1/75
1/1/73
1/1/75
1/1/73
1/1/75
1/1/73
Adult-Preferred Risk
Allstate
$ 60
$ 65
$ 77
$ 83
$ 93
$ 98
Hartford
64
74
82
97
108
118
Aetna Casualty
61
74
79
97
105
118
Government Employees
53
58
66
78
86
93
Travelers
61
70
76
93
99
112
State Farm Mutual
61
67
73
88
90
104
Empire Mutual*
54
64
66
86
88
101
Liberty Mutual Fire
52
61
67
79
90
94
Nationwide Mutual
61
66
75
87
92
102
Merchants Mutual
57
64
70
82
91
97
Ins. Co. of North America
59
65
76
83
99
99
Lumbermens Mutual Casualty
71
78
87
101
108
119
Utica Mutual*
52
68
64
87
85
104
General Accident
58
66
72
86
95
102
Boston Old Colony
56
65
69
83
90
99
Assigned Risk
63
71
83
98
104
107
Unmarried Male-Age 20-One Chargeable Accident
Allstate
$190
$269
$237
$321
$281
$366
Hartford
188
216
240
285
295
348
Aetna Casualty
179
216
232
285
287
348
Government Employees
157
182
195
232
234
269
Travelers
257
303
316
378
381
443
State Farm Mutual
230
264
274
331
309
388
Empire Mutual*
170
246
210
306
252
355
Liberty Mutual Fire*
158
202
197
264
239
305
Nationwide Mutual
232
277
287
340
335
396
Merchants Mutual
184
211
226
267
271
308
Ins. Co. of North America
182
249
232
306
281
355
Lumbermens Mutual Casualty
253
300
312
368
370
427
Utica Mutual*
152
195
188
251
227
301
General Accident
234
277
288
343
348
399
Boston Old Colony
164
189
201
243
243
291
Assigned Risk
251
296
332
389
381
430
*The January 1, 1975 rates for these companies are lower than the no-fault
"go-in" rates they charged on February 1, 1974. For the remaining companies,
January 1, 1975 rates are identical with the February 1, 1974 "go-in" rates.
17.
ANNUAL PERSONAL INJURY AUTOMOBILE INSURANCE PREMIUMS
OF 15 LEADING INSURERS AND ASSIGNED RISK PLAN
UNDER NO-FAULT (1/1/75) AND PRIOR TO NO-FAULT (1/1/73)
HEMPSTEAD TOWNSHIP
Minimum Coverage
Medium Coverage
Higher Coverage
Company
1/1/75
1/1/73
1/1/75
1/1/73
1/1/75
1/1/73
Adult-Preferred Risk
Allstate
$ 68
$ 79
$ 88
$100
$105
$118
Hartford
67
77
85
101
112
122
Aetna Casualty
68
82
88
107
115
129
Government Employees
52
56
65
76
85
91
Travelers
70
80
86
105
111
126
State Farm Mutual
71
79
85
104
103
123
Empire Mutual*
58
72
72
95
94
111
Liberty Mutual Fire
62
74
79
94
104
112
Nationwide Mutual
67
75
83
99
102
115
Merchants Mutual
64
73
79
93
102
110
Ins. Co. of North America
73
82
92
104
117
122
Lumbermens Mutual Casualty
71
78
87
102
108
121
Utica Mutual*
58
75
71
96
94
113
General Accident
66
75
82
98
107
116
Boston Old Colony
65
76
80
97
104
115
Assigned Risk
69
76
89
105
110
116
Unmarried Male-Age 20-One Chargeable Accident
Allstate
$216
$299
$268
$355
$317
$404
Hartford
197
225
250
297
307
360
Aetna Casualty
200
240
257
315
317
381
Government Employees
144
165
179
212
216
246
Travelers
296
346
360
422
433
490
State Farm Mutual
271
314
322
392
361
460
Empire Mutual*
160
231
197
288
238
334
Liberty Mutual Fire*
187
246
234
315
281
364
Nationwide Mutual
231
275
285
339
333
396
Merchants Mutual
209
239
257
300
307
342
Ins. Co. of North America
225
291
281
356
339
413
Lumbermens Mutual Casualty
239
281
295
344
350
400
Utica Mutual*
170
215
209
278
254
327
General Accident
234
275
287
338
347
392
Boston Old Colony
191
222
235
285
283
339
Assigned Risk
244
287
321
379
368
418
*The January 1, 1975 rates for these companies are lower than the no-fault
"go-in" rates they charged on February 1, 1974. For the remaining companies,
January 1. 1975 rates are identical with the Februarv 1. 1974 "go-in" rates.
18.
ANNUAL PERSONAL INJURY AUTOMOBILE INSURANCE PREMIUMS
OF 15 LEADING INSURERS AND ASSIGNED RISK PLAN
UNDER NO-FAULT (1/1/75) AND PRIOR TO NO-FAULT (1/1/73)
SUFFOLK COUNTY EAST
Minimum Coverage
Medium Coverage
Higher Coverage
Company
1/1/75
1/1/73
1/1/75
1/1/73
1/1/75
1/1/73
Adult-Preferred Risk
Allstate
$ 64
$ 67
$ 83
$ 86
$ 99
$101
Hartford
65
75
83
99
109
120
Aetna Casualty
52
65
69
86
93
104
Government Employees
47
51
59
69
78
82
Travelers
65
75
81
100
104
119
State Farm Mutual
61
67
73
88
90
104
Empire Mutual*
56
67
69
90
91
106
Liberty Mutual Fire
56
67
70
86
94
115
Nationwide Mutual
63
69
78
90
95
106
Merchants Mutual
59
68
73
87
95
103
Ins. Co. of North America
59
62
76
80
99
95
Lumbermens Mutual Casualty
64
71
78
92
98
111
Utica Mutual*
54
73
66
93
88
111
General Accident
61
69
76
90
99
107
Boston Old Colony
60
69
75
89
97
105
Assigned Risk
66
74
87
102
108
112
Unmarried Male-Age 20-One Chargeable Accident
Allstate
$201
$277
$250
$329
$296
$375
Hartford
191
219
244
291
299
354
Aetna Casualty
152
189
201
252
250
306
Government Employees
140
159
173
205
209
238
Travelers
277
322
338
401
406
458
State Farm Mutual
228
261
271
320
305
375
Empire Mutual*
172
252
212
313
254
363
Liberty Mutual Fire*
187
254
232
328
279
432
Nationwide Mutual
242
287
298
353
348
411
Merchants Mutual
207
236
253
299
302
347
Ins. Co. of North America
182
240
232
294
281
342
Lumbermens Mutual Casualty
231
271
280
333
337
387
Utica Mutual*
158
227
194
291
236
349
General Accident
244
287
299
351
362
408
Boston Old Colony
176
201
218
261
262
309
Assigned Risk
255
302
336
397
385
438
*The January 1, 1975 rates for these companies are lower than the no-fault
"go-in" rates they charged on February 1, 1974. For the remaining companies,
January 1, 1975 rates are identical with the February 1, 1974 "go-in" rates.
19.
ANNUAL PERSONAL INJURY AUTOMOBILE INSURANCE PREMIUMS
OF 15 LEADING INSURERS AND ASSIGNED RISK PLAN
UNDER NO-FAULT (1/1/75) AND PRIOR TO NO-FAULT (1/1/73)
NORTH HEMPSTEAD
Minimum Coverage
Medium Coverage
Higher Coverage
Company
1/1/75
1/1/73
1/1/75
1/1/73
1/1/75
1/1/73
Adult-Preferred Risk
Allstate
$ 58
$ 69
$ 74
$ 88
$ 90
$103
Hartford
57
66
72
87
96
106
Aetna Casualty
61
74
78
97
105
118
Government Employees
46
50
57
68
77
81
Travelers
63
72
77
95
102
114
State Farm Mutual
66
73
78
96
97
113
Empire Mutual*
54
64
66
86
88
101
Liberty Mutual Fire
44
62
57
80
79
94
Nationwide Mutual
58
63
71
84
89
98
Merchants Mutual
55
62
66
79
88
94
Ins. Co. of North America
60
69
76
89
100
106
Lumbermens Mutual Casualty
63
70
76
93
97
110
Utica Mutual*
50
71
61
91
81
108
General Accident
56
63
69
84
92
100
Boston Old Colony
57
66
69
84
91
100
Assigned Risk
64
71
83
98
105
108
Unmarried Male-Age 20-One Chargeable Accident
Allstate
$182
$283
$226
$336
$269
$384
Hartford
167
192
211
255
261
312
Aetna Casualty
179
216
231
285
287
348
Government Employees
137
156
169
201
205
234
Travelers
267
312
325
389
392
455
State Farm Mutual
250
288
295
362
333
322
Empire Mutual*
143
207
176
261
202
302
Liberty Mutual Fire*
132
206
168
266
203
307
Nationwide Mutual
218
259
268
320
315
372
Merchants Mutual
177
202
217
257
262
299
Ins. Co. of North America
185
264
234
324
285
376
Lumbermens Mutual Casualty
214
252
265
311
316
361
Utica Mutual*
146
204
179
263
215
312
General Accident
221
259
269
318
328
368
Boston Old Colony
167
192
203
246
246
294
Assigned Risk
237
279
310
368
356
407
*The January 1, 1975 rates for these companies are lower than the no-fault
"go-in" rates they charged on February 1, 1974. For the remaining companies,
19.
ANNUAL PERSONAL INJURY AUTOMOBILE INSURANCE PREMIUMS
OF 15 LEADING INSURERS AND ASSIGNED RISK PLAN
UNDER NO-FAULT (1/1/75) AND PRIOR TO NO-FAULT (1/1/73)
NORTH HEMPSTEAD
Minimum Coverage
Medium Coverage
Higher Coverage
Company
1/1/75
1/1/73
1/1/75
1/1/73
1/1/75
1/1/73
Adult-Preferred Risk
Allstate
$ 58
$ 69
$ 74
$ 88
$ 90
$103
Hartford
57
66
72
87
96
106
Aetna Casualty
61
74
78
97
105
118
Government Employees
46
50
57
68
77
81
Travelers
63
72
77
95
102
114
State Farm Mutual
66
73
78
96
97
113
Empire Mutual*
54
64
66
86
88
101
Liberty Mutual Fire
44
62
57
80
79
94
Nationwide Mutual
58
63
71
84
89
98
Merchants Mutual
55
62
66
79
88
94
Ins. Co. of North America
60
69
76
89
100
106
Lumbermens Mutual Casualty
63
70
76
93
97
110
Utica Mutual*
50
71
61
91
81
108
General Accident
56
63
69
84
92
100
Boston Old Colony
57
66
69
84
91
100
Assigned Risk
64
71
83
98
105
108
Unmarried Male-Age 20-One Chargeable Accident
Allstate
$182
$283
$226
$336
$269
$384
Hartford
167
192
211
255
261
312
Aetna Casualty
179
216
231
285
287
348
Government Employees
137
156
169
201
205
234
Travelers
267
312
325
389
392
455
State Farm Mutual
250
288
295
362
333
322
Empire Mutual*
143
207
176
261
202
302
Liberty Mutual Fire*
132
206
168
266
203
307
Nationwide Mutual
218
259
268
320
315
372
Merchants Mutual
177
202
217
257
262
299
Ins. Co. of North America
185
264
234
324
285
376
Lumbermens Mutual Casualty
214
252
265
311
316
361
Utica Mutual*
146
204
179
263
215
312
General Accident
221
259
269
318
328
368
Boston Old Colony
167
192
203
246
246
294
Assigned Risk
237
279
310
368
356
407
*The January 1, 1975 rates for these companies are lower than the no-fault
"go-in" rates they charged on February 1, 1974. For the remaining companies,
January 1, 1975 rates are identical with the February 1, 1974 "go-in" rates.
20.
ANNUAL PERSONAL INJURY AUTOMOBILE INSURANCE PREMIUMS
OF 15 LEADING INSURERS AND ASSIGNED RISK PLAN
UNDER NO-FAULT (1/1/75) AND PRIOR TO NO-FAULT (1/1/73)
OYSTER BAY
Minimum Coverage
Medium Coverage
Higher Coverage
Company
1/1/75
1/1/73
1/1/75
1/1/73
1/1/75
1/1/73
Adult-Preferred Risk
Allstate
$ 64
$ 68
$ 82
$ 87
$ 99
$102
Hartford
62
72
78
94
104
114
Aetna Casualty
59
71
75
93
101
113
Government Employees
50
54
62
73
82
87
Travelers
61
70
75
93
99
112
State Farm Mutual
64
71
75
94
93
110
Empire Mutual*
52
63
63
84
84
98
Liberty Mutual Fire
54
64
68
83
92
97
Nationwide Mutual
62
67
75
88
94
104
Merchants Mutual
57
64
69
82
91
97
Ins. Co. of North America
58
63
74
81
98
96
Lumbermens Mutual Casualty
62
68
75
90
96
107
Utica Mutual*
51
68
62
87
83
104
General Accident
60
68
73
89
97
106
Boston Old Colony
57
67
70
85
93
102
Assigned Risk
60
67
78
93
99
102
Unmarried Male-Age 20-One Chargeable Accident
Allstate
$199
$281
$247
$334
$293
$380
Hartford
182
210
229
276
283
336
Aetna Casualty
173
207
220
273
275
333
Government Employees
147
169
181
217
220
251
Travelers
257
303
315
379
381
443
State Farm Mutual
242
278
286
350
323
410
Empire Mutual*
142
204
175
257
212
298
Liberty Mutual Fire*
162
213
203
276
244
319
Nationwide Mutual
229
271
280
334
329
388
Merchants Mutual
184
211
225
267
271
311
Ins. Co. of North America
179
243
228
299
278
347
Lumbermens Mutual Casualty
210
245
259
303
309
351
Utica Mutual*
149
195
182
251
221
301
General Accident
230
271
280
333
341
386
Boston Old Colony
167
195
206
249
250
300
Assigned Risk
239
280
313
369
359
408
*The January 1, 1975 rates for these companies are lower than the no-fault
"go-in" rates they charged on February 1, 1974. For the remaining companies,
January 1, 1975 rates are identical with the February 1, 1974 "go-in" rates.
21.
ANNUAL PERSONAL INJURY AUTOMOBILE INSURANCE PREMIUMS
OF 15 LEADING INSURERS AND ASSIGNED RISK PLAN
UNDER NO-FAULT (1/1/75) AND PRIOR TO NO-FAULT (1/1/73)
CENTRAL WESTCHESTER
Minimum Coverage
Medium Coverage
Higher Coverage
Company
1/1/75
1/1/73
1/1/75
1/1/73
1/1/75
1/1/73
Adult-Preferred Risk
Allstate
$ 50
$ 55
$ 65
$ 72
$ 79
$ 84
Hartford
50
57
64
76
86
93
Aetna Casualty
43
52
56
69
77
85
Government Employees
45
49
57
66
76
80
Travelers
50
56
62
76
82
93
State Farm Mutual
55
62
66
80
82
95
Empire Mutual*
44
53
55
72
75
85
Liberty Mutual Fire
43
58
56
76
77
89
Nationwide Mutual
47
51
58
69
73
81
Merchants Mutual
46
51
56
65
75
78
Ins. Co. of North America
48
60
63
77
84
92
Lumbermens Mutual Casualty
51
54
62
72
80
85
Utica Mutual*
40
57
49
73
68
87
General Accident
47
51
57
69
77
82
Boston Old Colony
49
53
61
68
81
82
Assigned Risk
52
57
69
81
87
89
Unmarried Male-Age 20-One Chargeable Accident
Allstate
$151
$227
$189
$272
$224
$310
Hartford
146
165
186
222
230
273
Aetna Casualty
125
150
162
201
204
249
Government Employees
135
153
168
198
203
230
Travelers
208
238
254
300
307
352
State Farm Mutual
210
241
249
302
281
353
Empire Mutual*
119
170
146
215
180
250
Liberty Mutual Fire*
129
192
164
253
200
292
Nationwide Mutual
180
209
221
262
260
304
Merchants Mutual
145
164
177
209
215
243
Ins. Co. of North America
147
229
192
282
234
328
Lumbermens Mutual Casualty
176
203
217
256
259
296
Utica Mutual*
116
162
143
210
176
250
General Accident
178
209
219
261
267
302
Boston Old Colony
143
153
176
198
214
240
Assigned Risk
204
237
268
315
310
348
*The January 1, 1975 rates for these companies are lower than the no-fault
"go-in" rates they charged on February 1, 1974. For the remaining companies,
January 1, 1975 rates are identical with the February 1, 1974 "go-in" rates.
22.
ANNUAL PERSONAL INJURY AUTOMOBILE INSURANCE PREMIUMS
OF 15 LEADING INSURERS AND ASSIGNED RISK PLAN
UNDER NO-FAULT (1/1/75) AND PRIOR TO NO-FAULT (1/1/73)
ALBANY
Minimum Coverage
Medium Coverage
Higher Coverage
Company
1/1/75
1/1/73
1/1/75
1/1/73
1/1/75
1/1/73
Adult-Preferred Risk
Allstate
$ 74
$ 81
$ 95
$103
$114
$120
Hartford
78
90
99
118
128
142
Aetna Casualty
72
87
94
113
122
136
Government Employees
53
57
66
77
86
91
Travelers
78
92
97
119
124
142
State Farm Mutual
77
86
92
111
111
129
Empire Mutual*
64
79
79
103
102
120
Liberty Mutual Fire
63
76
81
97
106
114
Nationwide Mutual
67
74
83
98
102
115
Merchants Mutual
68
78
84
99
107
117
Ins. Co. of North America
79
81
98
103
125
121
Lumbermens Mutual Casualty
73
80
89
105
111
122
Utica Mutual*
67
93
82
118
106
140
General Accident
67
76
84
99
108
117
Boston Old Colony
73
85
90
108
114
128
Assigned Risk
93
105
122
142
147
156
Unmarried Male-Age 20-One Chargeable Accident
Allstate
$233
$296
$290
$350
$343
$400
Hartford
230
264
290
348
355
420
Aetna Casualty
212
255
275
333
339
402
Government Employees
130
148
162
191
196
222
Travelers
335
401
410
495
492
578
State Farm Mutual
291
339
346
421
387
492
Empire Mutual*
173
254
213
315
256
365
Liberty Mutual Fire*
190
254
240
324
290
374
Nationwide Mutual
224
262
276
326
324
379
Merchants Mutual
226
256
276
322
329
368
Ins. Co. of North America
245
275
303
337
364
390
Lumbermens Mutual Casualty
224
264
277
327
329
379
Utica Mutual*
197
269
242
342
290
407
General Accident
223
262
273
322
331
373
Boston Old Colony
215
249
263
318
315
378
Assigned Risk
266
315
351
413
402
457
*The January 1, 1975 rates for these companies are lower than the no-fault
"go-in" rates they charged on February 1, 1974. For the remaining companies,
January 1, 1975 rates are identical with the February 1, 1974 "go-in" rates.
23.
ANNUAL PERSONAL INJURY AUTOMOBILE INSURANCE PREMIUMS
OF 15 LEADING INSURERS AND ASSIGNED RISK PLAN
UNDER NO-FAULT (1/1/75) AND PRIOR TO NO-FAULT (1/1/73)
BINGHAMTON
Minimum Coverage
Medium Coverage
Higher Coverage
Company
1/1/75
1/1/73
1/1/75
1/1/73
1/1/75
1/1/73
Adult-Preferred Risk
Allstate
$ 48
$ 53
$ 63
$ 70
$ 76
$ 83
Hartford
51
58
65
77
87
95
Aetna Casualty
42
51
55
68
76
84
Government Employees
34
36
43
50
60
61
Travelers
49
55
61
75
81
91
State Farm Mutual
48
51
57
68
73
80
Empire Mutual*
42
50
52
68
71
81
Liberty Mutual Fire
43
49
55
64
76
76
Nationwide Mutual
47
50
58
67
73
79
Merchants Mutual
43
49
54
63
72
74
Ins. Co. of North America
42
48
56
63
76
76
Lumbermens Mutual Casualty
46
49
56
66
73
78
Utica Mutual*
40
58
49
75
68
90
General Accident
47
50
57
67
77
80
Boston Old Colony
44
51
55
66
74
79
Assigned Risk
52
57
69
81
87
89
Unmarried Male-Age 20-One Chargeable Accident
Allstate
$147
$219
$184
$263
$219
$300
Hartford
149
168
190
225
234
279
Aetna Casualty
122
147
159
198
201
246
Government Employees
97
110
121
143
149
167
Travelers
204
234
250
294
303
346
State Farm Mutual
177
200
211
255
240
299
Empire Mutual*
130
184
160
233
195
271
Liberty Mutual Fire*
143
182
180
242
218
279
Nationwide Mutual
177
206
218
257
256
299
Merchants Mutual
147
169
182
214
221
249
Ins. Co. of North America
128
182
172
225
211
263
Lumbermens Mutual Casualty
161
186
199
230
239
267
Utica Mutual*
116
179
143
234
176
282
General Accident
176
206
215
257
263
300
Boston Old Colony
128
147
159
192
193
231
Assigned Risk
204
237
268
315
310
348
*The January 1, 1975 rates for these companies are lower than the no-fault
"go-in" rates they charged on February 1, 1974. For the remaining companies,
January 1, 1975 rates are identical with the February 1, 1974 "go-in" rates.
24.
ANNUAL PERSONAL INJURY AUTOMOBILE INSURANCE PREMIUMS
OF 15 LEADING INSURERS AND ASSIGNED RISK PLAN
UNDER NO-FAULT (1/1/75) AND PRIOR TO NO-FAULT (1/1/73)
BUFFALO AND LACKAWANNA
Minimum Coverage
Medium Coverage
Higher Coverage
Company
1/1/75
1/1/73
1/1/75
1/1/73
1/1/75
1/1/73
Adult-Preferred Risk
Allstate
$ 96
$ 89
$123
$113
$145
$130
Hartford*
98
123
123
158
158
189
Aetna Casualty
91
120
119
154
153
185
Government Employees
58
63
73
85
94
100
Travelers
95
113
118
146
148
172
State Farm Mutual
74
82
89
107
107
125
Empire Mutual*
78
96
96
125
121
146
Liberty Mutual Fire
76
92
97
115
125
135
Nationwide Mutual
80
90
99
118
120
137
Merchants Mutual
86
98
105
125
132
146
Ins. Co. of North America
104
103
127
129
158
151
Lumbermens Mutual Casualty
90
101
110
129
135
151
Utica Mutual*
92
106
113
134
142
158
General Accident
91
103
111
132
141
155
Boston Old Colony
88
103
109
131
137
154
Assigned Risk
104
120
137
162
163
178
Unmarried Male-Age 20-One Chargeable Accident
Allstate
$309
$314
$383
$371
$452
$424
Hartford
290
363
365
468
446
561
Aetna Casualty
269
354
352
456
431
549
Government Employees
128
146
160
189
194
220
Travelers
408
493
498
609
597
708
State Farm Mutual
282
325
334
405
374
472
Empire Mutual*
183
268
225
332
270
384
Liberty Mutual Fire*
230
305
287
384
345
443
Nationwide Mutual
260
309
320
380
374
441
Merchants Mutual
284
326
347
411
411
475
Ins. Co. of North America
323
337
392
411
468
476
Lumbermens Mutual Casualty
251
297
309
365
366
423
Utica Mutual*
272
307
335
389
398
460
General Accident
272
320
333
395
402
459
Boston Old Colony
260
303
322
387
382
456
Assigned Risk
304
362
400
471
457
521
*The January 1, 1975 rates for these companies are lower than the no-fault
"go-in" rates they charged on February 1, 1974. For the remaining companies,
January 1, 1975 rates are identical with the February 1, 1974 "go-in" rates.
25.
ANNUAL PERSONAL INJURY AUTOMOBILE INSURANCE PREMIUMS
OF 15 LEADING INSURERS AND ASSIGNED RISK PLAN
UNDER NO-FAULT (1/1/75) AND PRIOR TO NO-FAULT (1/1/73)
JAMESTOWN
Minimum Coverage
Medium Coverage
Higher Coverage
Company
1/1/75
1/1/73
1/1/75
1/1/73
1/1/75
1/1/73
Adult-Preferred Risk
Allstate
$ 50
$ 49
$ 65
$ 64
$ 79
$ 76
Hartford
48
55
62
74
83
90
Aetna Casualty
45
56
59
75
81
92
Government Employees
33
34
42
48
59
59
Travelers
54
60
67
81
88
98
State Farm Mutual
51
56
61
75
77
87
Empire Mutual*
38
45
46
61
65
73
Liberty Mutual Fire
37
45
49
59
69
70
Nationwide Mutual
46
47
57
65
72
77
Merchants Mutual
43
49
54
62
72
74
Ins. Co. of North America
49
57
64
74
85
88
Lumbermens Mutual Casualty
45
48
55
66
72
79
Utica Mutual*
41
55
49
70
68
85
General Accident
46
49
56
65
76
78
Boston Old Colony
47
54
58
69
78
83
Assigned Risk
46
50
60
71
78
78
Unmarried Male-Age 20-One Chargeable Accident
Allstate
$153
$181
$191
$218
$227
$251
Hartford
140
159
179
216
222
264
Aetna Casualty
131
162
172
219
216
270
Government Employees
84
94
105
124
131
145
Travelers
228
258
277
323
335
378
State Farm Mutual
189
216
225
277
255
320
Empire Mutual*
105
150
130
192
160
223
Liberty Mutual Fire*
126
168
160
222
196
257
Nationwide Mutual
159
183
196
231
231
269
Merchants Mutual
147
169
182
214
221
246
Ins. Co. of North America
150
198
195
244
238
286
Lumbermens Mutual Casualty
144
166
178
208
214
242
Utica Mutual*
119
169
143
217
176
265
General Accident
158
183
194
230
238
268
Boston Old Colony
137
156
169
201
205
243
Assigned Risk
162
187
211
250
246
275
*The January 1, 1975 rates for these companies are lower than the no-fault
"go-in" rates they charged on February 1, 1974. For the remaining companies,
January 1, 1975 rates are identical with the February 1, 1974 "go-in" rates.
26.
ANNUAL PERSONAL INJURY AUTOMOBILE INSURANCE PREMIUMS
OF 15 LEADING INSURERS AND ASSIGNED RISK PLAN
UNDER NO-FAULT (1/1/75) AND PRIOR TO NO-FAULT (1/1/73)
ROCHESTER SUBURBAN
Minimum Coverage
Medium Coverage
Higher Coverage
Company
1/1/75
1/1/73
1/1/75
1/1/73
1/1/75
1/1/73
Adult-Preferred Risk
Allstate
$ 51
$ 62
$ 66
$ 80
$ 80
$ 94
Hartford
57
66
73
87
96
106
Aetna Casualty
51
62
66
82
90
100
Government Employees
43
45
53
62
72
74
Travelers
56
65
70
87
92
105
State Farm Mutual
57
63
69
84
86
98
Empire Mutual*
48
57
59
77
79
91
Liberty Mutual Fire
46
65
59
84
81
99
Nationwide Mutual
50
53
63
73
78
86
Merchants Mutual
46
52
56
67
75
80
Ins. Co. of North America
50
72
65
92
87
109
Lumbermens Mutual Casualty
51
55
64
73
82
87
Utica Mutual*
42
65
51
83
71
99
General Accident
54
61
68
79
89
94
Boston Old Colony
49
57
61
73
81
87
Assigned Risk
57
63
76
89
95
97
Unmarried Male-Age 20-One Chargeable Accident
Allstate
$158
$253
$197
$303
$234
$345
Hartford
167
192
212
255
261
312
Aetna Casualty
149
180
193
240
241
294
Government Employees
123
140
153
181
186
211
Travelers
238
277
294
348
354
437
State Farm Mutual
216
246
257
310
290
365
Empire Mutual*
150
215
184
270
222
313
Liberty Mutual Fire*
154
245
194
320
234
368
Nationwide Mutual
189
221
232
276
273
322
Merchants Mutual
158
181
194
229
235
267
Ins. Co. of North America
154
278
201
341
245
396
Lumbermens Mutual Casualty
181
211
224
265
267
308
Utica Mutual*
122
201
149
259
185
311
General Accident
214
253
262
314
319
368
Boston Old Colony
143
165
176
213
214
255
Assigned Risk
227
265
297
350
342
387
*The January 1, 1975 rates for these companies are lower than the no-fault
"go-in" rates they charged on February 1, 1974. For the remaining companies,
January 1, 1975 rates are identical with the February 1, 1974 "go-in" rates.
27.
ANNUAL PERSONAL INJURY AUTOMOBILE INSURANCE PREMIUMS
OF 15 LEADING INSURERS AND ASSIGNED RISK PLAN
UNDER NO-FAULT (1/1/75) AND PRIOR TO NO-FAULT (1/1/73)
ROCHESTER
Minimum Coverage
Medium Coverage
Higher Coverage
Company
1/1/75
1/1/73
1/1/75
1/1/73
1/1/75
1/1/73
Adult-Preferred Risk
Allstate
$ 74
$ 76
$ 95
$ 98
$114
$114
Hartford*
74
90
93
118
122
142
Aetna Casualty
65
80
85
105
112
127
Government Employees
48
51
60
69
79
82
Travelers
75
88
93
115
119
137
State Farm Mutual
62
68
74
90
91
105
Empire Mutual*
56
68
69
91
91
107
Liberty Mutual Fire
64
77
81
98
105
115
Nationwide Mutual
66
73
82
96
100
113
Merchants Mutual
65
74
81
94
104
111
Ins. Co. of North America
75
76
94
97
120
115
Lumbermens Mutual Casualty
64
71
78
95
98
112
Utica Mutual*
60
82
75
105
98
124
General Accident
69
78
86
102
110
121
Boston Old Colony
68
79
85
101
108
120
Assigned Risk
85
96
111
131
134
144
Unmarried Male-Age 20-One Chargeable Accident
Allstate
$233
$286
$290
$339
$343
$386
Hartford*
218
264
275
348
338
420
Aetna Casualty
191
234
250
309
308
375
Government Employees
125
142
155
183
188
213
Travelers
320
381
392
473
471
552
State Farm Mutual
230
266
274
335
309
392
Enpire Mutual*
157
227
193
283
233
329
Liberty Mutual Fire*
178
257
224
326
268
343
Nationwide Mutual
229
272
281
336
329
390
Merchants Mutual
213
245
261
309
312
358
Ins. Co. of North America
232
266
289
326
347
378
Lumbermens Mutual Casualty
204
238
253
296
301
343
Utica Mutual*
176
236
221
304
264
360
General Accident
250
293
305
359
369
417
Boston Old Colony
200
231
248
297
297
354
Assigned Risk
263
310
347
407
398
450
*The January 1, 1975 rates for these companies are lower than the no-fault
"go-in" rates they charged on February 1, 1974. For the remaining companies,
January 1, 1975 rates are identical with the February 1, 1974 "go-in" rates.
28.
ANNUAL PERSONAL INJURY AUTOMOBILE INSURANCE PREMIUMS
OF 15 LEADING INSURERS AND ASSIGNED RISK PLAN
UNDER NO-FAULT (1/1/75) AND PRIOR TO NO-FAULT (1/1/73)
SYRACUSE
Minimum Coverage
Medium Coverage
Higher Coverage
Company
1/1/75
1/1/73
1/1/75
1/1/73
1/1/75
1/1/73
Adult-Preferred Risk
Allstate
$ 61
$ 67
$ 79
$ 86
$ 95
$101
Hartford
57
66
73
87
96
106
Aetna Casualty
60
73
78
96
1.04
117
Government Employees
47
51
59
69
78
72
Travelers
66
77
82
103
106
122
State Farm Mutual
56
61
68
81
85
96
Empire Mutual*
52
62
63
82
84
97
Liberty Mutual Fire
52
64
67
82
90
97
Nationwide Mutual
51
54
64
74
79
88
Merchants Mutual
57
64
70
82
91
97
Ins. Co. of North America
64
77
81
97
105
115
Lumbermens Mutual Casualty
60
65
73
86
92
101
Utica Mutual*
52
76
64
97
85
115
General Accident
56
63
70
83
92
98
Boston Old Colony
57
67
71
85
93
102
Assigned Risk
66
73
87
101
107
111
Unmarried Male-Age 20-One Chargeable Accident
Allstate
$192
$251
$239
$300
$284
$341
Hartford
167
192
212
255
261
312
Aetna Casualty
176
213
229
282
284
345
Government Employees
128
145
159
188
192
218
Travelers
281
332
342
414
412
483
State Farm Mutual
212
241
251
302
284
357
Empire Mutual*
144
210
179
264
217
306
Liberty Mutual Fire*
154
210
196
272
237
314
Nationwide Mutual
191
223
235
279
276
326
Merchants Mutual
184
211
226
267
271
311
Ins. Co. of North America
197
269
249
330
301
382
Lumbermens Mutual Casualty
195
227
240
281
286
329
Utica Mutual*
152
218
188
281
227
333
General Accident
204
241
250
299
304
348
Boston Old Colony
167
195
207
249
250
300
Assigned Risk
237
279
312
368
358
407
*The January 1, 1975 rates for these companies are lower than the no-fault
"go-in" rates they charged on February 1, 1974. For the remaining companies,
January 1, 1975 rates are identical with the February 1, 1974 "go-in" rates.
29.
ANNUAL PERSONAL INJURY AUTOMOBILE INSURANCE PREMIUMS
OF 15 LEADING INSURERS AND ASSIGNED RISK PLAN
UNDER NO-FAULT (1/1/75) AND PRIOR TO NO-FAULT (1/1/73)
WATERTOWN
Minimum Coverage
Medium Coverage
Higher Coverage
Company
1/1/75 1/1/73
1/1/75
1/1/73
1/1/75
1/1/73
Adult-Preferred Risk
Allstate
$ 35
$ 39
$ 46
$ 54
$ 58
$ 65
Hartford
38
43
49
59
68
72
Aetna Casualty
28
36
38
50
56
63
Government Employees
33
34
42
48
59
59
Travelers
41
43
50
60
68
75
State Farm Mutual
42
45
51
63
66
72
Empire Mutual*
31
35
38
50
55
60
Liberty Mutual Fire
28
38
38
52
56
62
Nationwide Mutual
36
37
45
52
58
62
Merchants Mutual
33
36
41
46
57
55
Ins. Co. of North America
33
42
46
55
64
67
Lumbermens Mutual Casualty
37
38
45
54
60
65
Utica Mutual*
30
40
35
52
52
64
General Accident
36
37
45
51
62
62
Boston Old Colony
35
40
43
52
60
64
Assigned Risk
35
39
46
58
63
63
Unmarried Male-Age 20-One Chargeable Accident
Allstate
$108
$157
$135
$191
$162
$218
Hartford
110
123
140
171
175
210
Aetna Casualty
80
102
109
144
140
183
Government Employees
92
104
115
136
142
159
Travelers
166
179
201
228
244
271
State Farm Mutual
156
172
185
221
212
261
Empire Mutual*
91
128
112
165
140
192
Liberty Mutual Fire*
97
143
125
197
154
227
Nationwide Mutual
131
148
162
191
193
223
Merchants Mutual
109
124
134
157
165
185
Ins. Co. of North America
99
157
137
194
170
229
Lumbermens Mutual Casualty
126
143
154
181
186
212
Utica Mutual*
86
125
101
165
128
204
General Accident
129
152
159
193
197
226
Boston Old Colony
101
114
124
150
153
186
Assigned Risk
139
159
182
214
213
236
*The January 1, 1975 rates for these companies are lower than the no-fault
"go-in" rates they charged on February 1, 1974. For the remaining companies,
January 1, 1975 rates are identical with the February 1, 1974 "go-in" rates.
30.
ANNUAL PERSONAL INJURY AUTOMOBILE INSURANCE PREMIUMS
OF 15 LEADING INSURERS AND ASSIGNED RISK PLAN
UNDER NO-FAULT (1/1/75) AND PRIOR TO NO-FAULT (1/1/73)
SUFFOLK COUNTY WEST
Minimum Coverage
Medium Coverage
Higher Coverage
Company
1/1/75
1/1/73
1/1/75
1/1/73
1/1/75
1/1/73
Adult-Preferred Risk
Allstate
$ 64
$ 77
$ 82
$ 99
$ 99
$115
Hartford
71
82
89
107
118
129
Aetna Casualty
59
71
75
93
101
113
Government Employees
52
56
64
75
85
90
Travelers
65
76
80
101
104
121
State Farm Mutual
70
78
83
103
102
120
Empire Mutual*
58
72
72
95
95
111
Liberty Mutual Fire
59
73
75
94
99
110
Nationwide Mutual
63
69
77
92
95
107
Merchants Mutual
60
68
73
87
96
103
Ins. Co. of North America
66
77
83
98
108
116
Lumbermens Mutual Casualty
64
71
78
94
99
111
Utica Mutual*
53
76
64
97
86
115
General Accident
61
69
75
91
99
107
Boston Old Colony
57
66
69
84
91
100
Assigned Risk
71
78
91
108
113
119
Unmarried Male-Age 20-One Chargeable Accident
Allstate
$201
$308
$249
$365
$296
$415
Hartford
209
240
264
315
325
381
Aetna Casualty
173
207
220
273
275
333
Government Employees
152
175
187
224
226
259
Travelers
277
326
337
407
406
475
State Farm Mutual
263
306
312
386
351
450
Empire Mutual*
175
255
215
316
258
367
Liberty Mutual Fire*
199
275
249
355
297
409
Nationwide Mutual
232
277
286
342
335
397
Merchants Mutual
209
238
256
302
307
350
Ins. Co. of North America
203
287
255
351
309
408
Lumbermens Mutual Casualty
234
275
287
338
342
391
Utica Mutual*
155
237
188
304
230
362
General Accident
235
277
287
340
349
394
Boston Old Colony
167
192
203
246
246
294
Assigned Risk
247
291
325
383
373
423
*The January 1, 1975 rates for these companies are lower than the no-fault
"go-in" rates they charged on February 1, 1974. For the remaining companies,
January 1, 1975 rates are identical with the February 1, 1974 "go-in" rates.
31.
NOTES
Assigned Risk premiums based on $50,000/$100,000 maximum bodily
injury liability and residual liability and $1,000 medical payments.
Premiums for Allstate, State Farm Mutual and Travelers for preferred
adults based on annual mileage over 7,500.
Government Employees and State Farm Mutual include minimum $5,000
residual medical payments.
Premiums for Liberty Mutual Fire and State Farm Mutual are estimated.
Liberty Mutual's package policy includes single limit BI and PD liability,
medical expenses and death benefits. State Farm's policy offers BI and
PD at a single premium.
(2)
ANALYSIS OF FIRST-YEAR EXPERIENCE WITH
THE MICHIGAN NO-FAULT AUTO INSURANCE LAW
AND RECOMMENDATIONS FOR ITS IMPROVEMENT
Presented to:
Special No-Fault Study Committee,
Michigan House of Representatives
By:
Michigan Association of Insurance Companies
November 12, 1974
FORD is LIBRARY BERALD
TO: Honorable Matthew McNecly, Chairman; Dan Angel, William Hayward,
Kirby Holmes, John Engler, John Kelsey, George Edwards,
Casmer Ogonowski
Gentle men:
The Michigan insurance companies were among the first to call for a
no-fault law so that the auto insurance dollar could be concentrated on paying
the expenses of the injured instead of those of the legal system.
But we expressed serious concern about some aspects of the law as it
finally was adopted.
We feared that the revolutionary change which it made would create pro-
longed constitutionality issues, which would leave the insurance system operating
under a cloud of uncertainty and make it impossible to determine the cost effect
of the change.
We had grave doubts whether the nature of the law's restriction on injury
fault claims and lawsuits would be adequate to support unlimited no-fault bene-
fits without creating additional insurance cost for motorists.
And we questioned whether people would accept the elimination of their
right to collect from an at-fault driver for damage to their vehicles.
Regardless of those reservations, we assured you and your colleagues that,
as professional administrators of the insurance system, we would conscient-
iously provide the people of Michigan with the best possible protection at the least
possible cost which the conditions would allow.
We have done that, and because the Michigan companies insure approxi-
mately half of the motor vehicles in the state we have had a very broad exposure
to the practical application of the new law.
Briefly, this is what has happened:
RA4D FORD CIBRARY
1. Your decision to provide unlimited no-fault medical and rehab-
ilitation benefits and very substantial income loss compensation has
created near-ideal economic protection for accident injury victims, and
especially for the seriously injured. It is a dramatic improvement over
the fault system.
2. The law's removal of fault system recovery for damage to motor
vehicles has brought angry reaction from the motorist who does not have
collision coverage and cannot collect from a negligent driver who
smashes his car, or who has a form of collision coverage under which he
does not get his deductible when another driver is at fault. This has
created a distorted impression of public dissatisfaction with the entire no-
fault concept because there are many more instances of vehicle damage
than of injury, and the injured who are benefitting from no-fault have not
been heard from.
3. Some segments of the law obviously need clarifying amendments.
There is a question whether school districts were intended to insure the
children on their buses. There is an almost certainly unintended pro-
vision for companies to recover no-fault benefits out of pain and suffering
awards to their insureds. Mandatory liability limits should be stated
in the act itself.
And the right of a motorist to voluntarily coordinate
his no-fault coverage with some other injury benefits is in doubt.
4. As we feared, the insurance system has been forced to operate
without answers to whether the law will be upheld and, if so, in what
form. The lack of those answers also has deferred the legal cases which
will determine whether the law's provision which is intended to sharply
cut the fault system expenses will work. As a result it has been impossible
to détermine the effect of the law on the cost of auto insurance, and the
delay has created a multi-million-dollar possibility of double injury
payments.
5. Michigan motorists have had considerable auto insurance cost
savings during the first year of no-fault, even through the actual cost
effect of the law could not be established. This resulted from company
decisions to hold the line or decrease their premium levels until no-fault
experience could be established, despite the uncertainties of the law and
the impact of soaring inflation on the cost of everything auto insurance pays
for.
As we advised you when this committee was created, we appreciate your
decision to review the performance of the no-fault law and to consider the pos-
sibilities for its improvement, and we offer our fullest cooperation.
We believe the following elaboration upon the highlights of our experience
with it should be a practical and important contribution to your considerations.
In addition, we would be pleased to answer any questions which you may have,
and to consult with you at any time.
MEDICAL, REHABILITATION, AND INCOME LOSS BENEFITS:
Without question, this law is abundantly fulfilling the primary objective of
the no-fault principle, which to guarantee pronipt, sure, adequate recovery
of injury costs for all accident victims.
In the first year of no-fault, more than 135, 000 persons were injured in
Michigan auto accidents and nearly 1, 800 were killed. Among the injured and
the dependents of the fatally hurt who were insured by the Michigan companies the
no-fault protection was universally well-received, and this undoubtedly was true
of all others.
BERALD FORD LIBRARY
Page 3.
Companies have stressed prompt payment and in most instances it has
been made within a few days of the receipt of proof of doctor and hospital bills.
income loss, and replacement of services which an injured person would have
done for himself. Dependency benefits, which are geared to the maximum
$1, 000 a month for three years income loss benefits, have been quickly estab-
lished and paid. Under the fault system payment could have been made only if
another driver was legally liable and after the total amount of the loss was
established, both of which often had to be determined by lawsuit.
In all of these injuries and deaths no-fault has paid all medical and
hospital costs, plus income loss or dependency benefits when applicable, except
to the extent that workmen's compensation, social security or coordination with
health benefits was involved. It has paid regardless of who was at fault or
whether anyone was at fault. Under the fault system only about half of those
injured would have been able to collect from someone else.
The no-fault benefits have been particularly important for those who have
many thousands of dollars of hospital-medical costs which, under the old system,
would not have been met by modest auto insurance medical coverage or health
insurance, and for those who have extended work loss for which they have little
or no other coverage.
The most dramatic effect of the change has been the creation of a new
dimension in the role of auto insurance with the critically injured whose only
hope for a future with any enjoyment of life, instead of as a helpless bed patient,
lies in timely, comprehensive rehabilitation.
Under the fault system, auto insurance could do little to meet their treat-
ment needs. Unless someone else was legally at fault for the injury, auto insur-
ance had no role beyond the possibility of medical payments by the injured
person's company, usually not more than $5, 000. Ii the injury involved a fault
claim, the role of auto insurance was for the other motorist's company to defend
its insured and, if he was legally liable, to ultimately pay the determined award.
Now the critically injured are assured immediate access to all necessary
treatment and rehabilitation, with all of the costs guaranteed directly by their
own auto insurer. A number of such cases alrèady are either in or scheduled
to go to the best rehabilitation centers in the country, with their initial treat-
ment and lifetime care costs reserved by their insurers at from $100, 000 to
$250, 000 each.
In cooperation with Chairman McNeely, we have asked a few of those who
have experienced the no-fault benefits, or their close relatives, and some of
the specialists in rehabilitation treatment to give you at your hearings a first-
hand picture of how the law is working.
GERIALO FORD. FIBRARY
RESULTS OF NO-FAULT VEHICLE DAMAGE CONCEPT:
When the Legislature decided to extend the no-fault principle to include
damage to motor vehicles it removed a. form of protection which motorists
long have accepted and relied upon and about which they generally have strong
moral convictions.
Taking away the right to recover from an at-fault driver created a total
void in vehicle damage recovery for those without collision insurance and a partial
one for those with that coverage.' The motorist with an old car with too little
value to insure, one who feels he cannot or does not want to pay for collision
insurance, and those who ignore collision coverage because they are convinced
that any damage would be another driver's fault are accustomed to expect pay-
ment when someone else is at fault. Now that right to collect is gone. The
great majority, who buy collision insurance, also expect to recover their deduct-
ible along with the rest of the damage if another is at fault. That right also was
removed.
This condition has been remedied for most motorists by the offering of two
new forms of collision insurance. One, called limited collision, pays for vehicle
damage only if another is at fault. The other, called broadened collision, pays
the deductible along with the rest of the damage if another is at fault.
When the no-fault law became effective, companies applied limited colli-
sion without charge to the policies of those without collision coverage, and
broadened collision without charge to those with collision coverage. At the first
policy renewal, the new coverages and their rates were explained and motorists
were given the option of buying either of these or regular collision coverage with
a deductible. Limited collision rates were the lowest of the three. Broadened
collision rates were slightly higher than those for standard deductible collision.
In addition, some companies provided limited collision with a deductible to give
the motorist a lower rate.
The response among motorists differed by company, but in general about
70 to 80 per cent took either regular or broadened collision, 15 to 20 per cent
took limited, and 5 to 15 per cent elected to have no collision coverage.
This still leaves those who have no collision insurance unable to collect
for any damage to their vehicles, and those who have regular collision or limited
collision with a deductible unable to collect the amount of the deductible, and
many in this group have been expressing great dissatisfaction.
There are three alternatives for resolving this matter. One is to leave the
law as it now is and attempt to educate those who are complaining that, like all
others, they received a rate reduction from the elimination of proparty damage
liability and if they want the substitute protection they must pay for it. Another
is to restore property damage liability. The third is to make limited collision
coverage, without a deductible, a mandatory part of the no-fault law.
FORD
If there is a change, it also should involve consideration of the status of
the present residual property damage liability coverage and the property pro-
tection insurance provision, both of which are part of the overall rates for
vehicle damage coverages.
Among the companies, there are differences of opinion as to which might
be the better course. We believe it would be helpful to you to hear the different
views about this and the reasons for them as you consider this question.
SITUATIONS WHICH NEED CLARIFYING:
The question of school bus coverage already is before you in bill form.
Those involving subrogation against pain and suffering awards, the liability limit,
and coordination of benefits undoubtedly are drafting oversights requiring tech-
nical corrections. We would be happy to discuss these with you when you are
ready to review the law after your hearings.
EFFECT OF THE CLIMATE OF LEGAL UNCERTAINTY:
What has happened on the question of whether the no-fault law is constitu-
tional has become an example of the long-delayed court decisions which were one
of the motivations for creating a no-fault system.
Shortly after the law was adopted in October, 1972, the Supreme Court
was asked to resolve this issue. It ruled only that the Legislature had acted
properly in creating the law. Subsequently, two lawsuits in circuit courts have
produced decisions which have clouded the law's status, Now, after more than
two years, the issue again must go before the Supreme Court and apparently
there is little likelihood that it may act for many more months.
If the law should then be thrown out insurers would be faced with the
possibility of fault system claims, on top of the no-fault benefits already paid,
in injury cases dating back to the October 1, 1973, effective date of no-fault.
For the first year, that double payment potential is estimated at 250 million
dollars. By the time there is a decision it could nearly double.
With the constitutionality question unanswered, the other serious legal
uncertainty in the law also has been left in limbo. This is the question of whether
the provision allowing legal action for pain and suffering damages in instances of
"serious impairment of body function" will sharply reduce the fault expenses in
the insurance system or whether it may open a floodgate of fault claims and law-
suits.
There has been a sharp drop in injury liability claims the past year, but
that does not answer the question. Because of the prospect that the courts might
restore the fault system, and with a three-year period in which to file suits, many
law firms are known to be "stockpiling" suits rather than testing the language of
the new law. In recent months, however, companies have begun to receive claims
involving the "serious impairment" question.
FORD is LIBRARY GERALD
How the intent of this language is interpreted by the injured and the courts
will be a major factor in how the no-fault law will affect the price of auto
insurance. If all manner of minor and temporary disabilities are construed to
justify pain and suffering damages the fault system will be largely reimposed
upon the no-fault system. This would make financing the DEW costs of unlimited
care for all of the injured out of reduced fault costs obviously impossible.
PRESENT COST EFFECT OF NO-FAULT AND THE PROSPECTS:
When no-fault became effective companies adjusted their rates between the
new and old coverages to reflect the expected changes in loss exposure. This
decreased premiums for those who bought only the mandatory no-fault coverages.
It maintained or slightly decreased the former premium for those who also have
collision coverage.
In addition, there were larger premium decreases for young drivers, those
with low incomes, and retirees, to reflect the fact that they had smaller or less
likely exposure to income loss. Retirees are charged only for the risk of services
replacement for themselves or an uninsured passenger or pedestrian, or income
loss for the latter.
Also, those who have elected to coordinate their no-fault auto insurance
with their health insurance have received additional rate reductions.
As a result, the price of Michigan auto insurance, unlike that of almost
any other commodity or service, has remained stable or decreased. In most
companies rates have not increased since early 1973, for many not since 1971,
and some have decreased rates during that period.
The present rates are based on loss experience under the fault system,
adjusted to the probable effect of no-fault in the best judgment of the companies,
pending the acquiring of adequate actual no-fault experience.
During the past year loss experience generally has improved, but this has
had little to do with no-fault. Primarily it has resulted from the sustained
decrease in accidents, injuries and deaths produced by the changed driving habits
inspired by the energy problem.
Now the effect of the accident decrease is being offset by the sharpest
inflation in recent times in the cost of everything which auto insurance pays for.
Two graphs depicting the relationship of auto insurance price to those costs are
attached. They are based on national figures but are essertially true of Michigan.
In the period since last July, where these conclude, doctor's fees have jumped
FORD
to an annual rate of increase of 19 per cent and hospital charges to an 18 per cent
rate. The cost of car repair parts has soared 28 per cent and new car price
increases have raised replacement costs some $500 on 1974 models and a like
amount for 1975s.
Because of the conflicting factors in the basic cost trend and the threat of
staggering double payments and a flood of pain and suffering suits, it is impos-
sible for insurers to predict at this time what the effect may be on the future of
auto insurance price. The loss improvement of the past year could easily be
removed quickly by the inflation trend alone, and would be wiped out many times
over by an adverse answer to either of the legal uncertainties.
TRENDS IN COSTS OF AUTO INSURANCE PREMIUMS
Page 7.
AND OF MAJOR ITEMS FOR WHICH
AUTO INSURANCE PAYS
# 1967-1974 -
0
INDEX
210
200
OVERALL COST OF LIVING INDEX HAS
RISEN 48.3 PER CENT DURING THIS PERIOD
130
180
170
HOSPITAL SERVICE CHARGES
160
150
AUTO REPAIRS 3 MANITENANCE
140
130
AUTO INSURANCE PREMIUMS
MEDICAL CARE ITEMS
120
110
GERALD
100
?
FORD
1967
1968
1969
1970
1971
1972
1973
1974
1975
LIBRARY
JULY
SOURCE: CONSUMER PRICE INDEX. U.S. BUREAU OF LABOR STATISTICS
PREPARED BY INSURANCE INFORMATION INSTITUTE
TRENDS IN COSTS OF AUTO INSURANCE PREMIUMS
AND OF MAJOR ITEMS FOR WHICH
AUTO INSURANCE PAYS
PER CENT
DECEMBER 1973-JULY 1974
CHANGE
10
0
+87%
+82%
+7.6%
+7.1%
?
OVERALL COST OF LIVING
INDEX HAS RISEN 73 PER CENT
o:
DURING THIS PERIOD
4
a
!
40.7%
GERALD
C
AUTO
AUTO
MEDICAL
HOSPITAL
PHYSICIANS'
FORD
INSURANCE
REPAIRS à
CARE
SERVICE
FEES
LIBRARY
PREMIUMS MAINTENANCE
ITEMS
CHARGES
SOURCE CONSUMER PICCE INDEX, U.S. BUREAU OF LACOR STATISTICS
PREPARED BY INSURANCE INFORMATION INSTITUTE
CONCLUSIONS:
The improvement which the no-fault principle has created in compen-
sating the injured overshadows the conditions which ASC 143 it and deserves
to be protected by resolving them.
The property damage liability situation should be carefully reviewed to
determine how best to relieve those whom it has distressed and to prevent the
erosion of confidence in the no-fault principle.
There is nothing you can do, of course, about the constitutionality question,
but it is important that you be aware of and understand the threat which it poses
to the economics of no-fault protection.
If the "serious impairment" language does become an open invitation to
frivolous lawsuits instead of 2 protection against them we strongly believe that
you should reconsider this section of the law.
The people of Michigan now have a tremendously broader and more effective
auto injury loss protection at no greater price than the former system and at
lesser price for many. Under the conditions it to not possible to predict whether
the economica of this change will improve or worsen. If there are savings, the
Michigan companies and others are pledged to pass them on to their insured
motorists. If the costs increase, we will have no choice but to pass them on also.
Respectfully submitted,
Million
William P. Jumieson, President
Michigan Association of
Insurance Companies
WPJ:fs
Atts. 2.
FORD i LIBRARY. GERALD
NO-FAULT
CAR
INSURANCE
GERALD R. FORD
12-B
Friday, Nov. 15. '74
DETROIT FREE PRESS
IF YOU JUDGE IT
We've all lived with
In one classic example here at AAA, we had a little
No-Fault car
girl whose spinal cord was damaged in a car accident.
ON BROKEN PEOPLE
insurance for
She has spent the better part of the last year in four
a little over
IT'S BEEN A BOON.
different hospitals. And she will need a live-in therapist when
a year now.
she finally comes home.
In certain ways it has proven to be one of the greatest
Every pill, every crutch, every time a doctor exercises
innovations since the Salk vaccine, and in other ways, one of
her legs-all medical expenses caused by the accident - will be
the worst since the Edsel.
paid for the rest of her life, thanks to No-Fault.
Thanks to No-Fault, every motorist, passenger and
The key point is that her benefits were immediate and
in
medical
benefits
unlimited without ever having to go into court over who was at
tauon
for
me,
11
necessary,
Ponder the magnitude of that statement.
system of car insurance.
LIBRARY
FORD
is
SERVID
IF YOU JUDGE IT
Eight out of every
Florida, too, had a system for handling car damages
ten car
under No-Fault until their courts declared it unconstitutional.
ON BROKEN FENDERS
accidents,
Today, only one other state besides Michigan (out of
IT'S BEEN A BUST.
however,
the nation's 23 No-Fault states) treats payments for collision
are the
damages similar to the way we do under No-Fault.
crumpled fender kind, as opposed to the personal injury type.
The Exchange at AAA was against including provi-
And this is where No-Fault breaks down.
sions for handling property damages under the No-Fault law
The classic case here is that of the motorist waiting at
before it was passed by the Michigan legislature over a year ago.
an intersection for the light to change. And whammo, someone
But we said, "We'll try to make it fly."
piles into the rear of his car.
Well, it has flown alright, but not nearly as well as it
The Michigan No-Fault law says that he must pay for
could or should.
his own car damages unless, of course, he bought collision insur-
No-Fault has been a tremendous success when it
ance-a hardship purchase, we might add, for a person with a
comes to the repair of broken people, and a disappointing failure
limited income and an older car.
when it comes to the repair of broken fenders.
But even if his collision damages are covered, he may
And we think it's high time that our legislators correct
have to pay a deductible even though he was not at fault in
the Michigan No-Fault law by taking property damage provi-
the accident.
sions out of it, so that Michigan will have the best possible
And to us, that part of the No-Fault system just does
system of car insurance available anywhere in the nation.
not make sense.
We want to do more for you.
Detroit Automobile Inter-Insurance Exchange
Michigan
THE WHITE HOUSE
WASHINGTON
ACTION
May 2, 1975
MEMORANDUM FOR:
THE PRESIDENT
FROM:
JIM CANNON
SUBJECT:
NO-FAULT AUTOMOBILE INSURANCE
Secretary Coleman is scheduled to testify on no-fault
automobile insurance on Monday, May 5.
The purpose of this memorandum is to seek your guidance on
this issue.
Background
At the consumer meeting in April, you asked me where we
stood on the no-fault automobile insurance issue.
Jim Lynn has prepared a memo discussing the issue (Tab A).
Issues and Options
Two basic issues are presented:
Issue #1 Should the Federal Government mandate State
Governments to adopt mandatory automobile
insurance coverage using a no-fault system?
Arguments for:
The only way in which the remaining States that
do not now have mandatory coverage and a no-fault
system will adopt such a system is through Federal
mandate.
There are likely to be significant dollar savings
to the consumers through the adoption of a no-
fault system.
- 2 -
The establishment of uniform minimum Federal
standards will ease the administrative burdens
imposed on insurers by virtue of the current
patchwork quilt of differing State laws and
will simplify recoveries by insureds.
Arguments against:
Insurance regulation, automobile and drivers
registration, enforcement of traffic laws and
court adjudication of automobile-related dis-
putes have traditionally been a responsibility
of the States. Federal legislation establishing
minimum standards for no-fault would encroach
upon State responsibility and run counter to your
philosophy relating to the decentralization of
government.
Sixteen States now have a no-fault system
covering 42 percent of all licensed drivers.
Nine other States have adopted "add-on" laws
which provide some form of no-fault coverage.
Most States not now having no-fault will
consider no-fault proposals this year. If
California adopts a no-fault law, over 50
percent of the Nation's licensed drivers will
be covered by no-fault.
The National Governors Conference opposes the
adoption of national no-fault or mandated
standards for automobile insurance.
Options
1. Support Federal minimum no-fault standards.
Those favoring this option include Secretary
Coleman, Secretary Hills, Virginia Knauer and
Jim Lynn.
2. Continue to favor State action and oppose
Federal no-fault legislation.
Those favoring this option include the Attorney
General, Phil Buchen and Jim Cannon.
Bill siseman
- 3 -
Recommendation
I recommend you select option 2.
Decision
Option 1
(Coleman, Hills, Knauer, Lynn)
Option 2
(Attorney General, Buchen, Cannon)
Issue #2 If you decide to support some Federal involvement
in no-fault automobile insurance, what approach do
you favor?
Options
There are essentially two alternatives being actively
considered.
1. Alternative One
The Magnuson-Hart Bill (S.354). This sets
minimum no-fault standards, and each State
must pass laws conforming to these standards.
If the Secretary of DOT determines that the
State does not meet the standards, the Federal
law automatically pre-empts the State insurance
laws.
Arguments for:
This is the bill which passed the Senate last
year. It is the stronger of the two alternatives
and has very strong labor support. (The unions
see no-fault as a future bargaining objective
as part of a package of employer-financed coverage.)
Arguments against:
This involves the most direct Federal involvement
and could well lead to an increased Federal role
in the future (e.g., in setting rates or coverage
requirements). The Attorney General questions
the constitutionality of requiring the States to
administer a Federal insurance law if they fail
to adopt a similar one of their own.
- 4 -
2. Alternative Two
Amended S.354 (Kemper Plan) provides that the
Governor of each State must certify to the
Secretary of DOT that his State law meets the
Federal no-fault standard. If the Secretary
questions the certification, he must submit the
issue to the courts, which would then determine
whether or not the State law conformed with the
Federal standards. If the court determines
that the State law does conform, there would
be no further Federal role. If the court
determines that the State law does not conform,
the Secretary must (no discretion) withhold
Federal highway funds from that State.
Arguments for:
Limits Executive Branch involvement to essentially
a passive role and, therefore, the Federal role
is less likely to increase in the future.
Arguments against:
Will likely be opposed by highway program
advocates. Gives the courts responsibility
for determining whether complex State insurance
laws conform to Federal standards.
Decision (If you decide to support some Federal
no-fault law)
Option 1 Support Magnuson-Hart Bill (S.354).
Those favoring this option include
Secretary Coleman and Virginia Knauer.
Approve
Disapprove
Option 2 Support highway fund cut-off approach.
Those favoring this option include the
Attorney General, Phil Buchen, Jim Lynn,
and Jim Cannon
Approve
Disapprove
THE WHITE HOUSE
WASHINGTON
May 2, 1975
MEMORANDUM FOR THE PRESIDENT
FROM:
PHILIP BUCHEN
RODERICK HILLS
RH.
KENNETH LAZARUS
SUBJECT:
No-Fault Motor Vehicle Insurance Act (S. 354)
Although data is still incomplete, the following observations can
be made about a no-fault system:
(1)
No-fault does deliver a larger part of each
premium dollar to accident victims than does
the more traditional tort system.
(2)
No-fault does distribute dollars more equitably
and faster to accident victims.
(3)
While no-fault does appear to be a better system
on the basis of experience to date, S. 354 pro-
vides for broader coverage than traditional tort
systems. Thus, it is not at all clear that the
premiums under S. 354 would be reduced over
the long run.
(4)
Also, only one state, Michigan, has a no-fault
statute with coverage as broad as that contemplated
by S. 354.
There are several reasons, under the present circumstances, why
S. 354 can be regarded as an unwarranted, or at least a premature,
intrusion of the Federal Government into the affairs of the states:
-2-
(1)
The National Governors Conference strongly
opposes a federal no-fault statute and the
Governors of several states with no-fault have
actually opposed the imposition of federal control.
(2)
Other states (e.g., California) seem to be close
to enacting their own statutes.
(3)
Much of the public support for no-fault is based
on the unwarranted belief that it will reduce
premiums substantially.
(4)
The experience of the states having no-fault is
still sufficiently mixed as to cloud a final
appraisal of what kind of coverage was the "best".
(5)
The Attorney General feels strongly that imposition
of a federal standard of no-fault now would be an
unprecedented intrusion in a traditional state matter.
The Department of Transportation has encouraged states to adopt
no-fault and has provided considerable technical assistance to the
states. One can conclude that that is a better form of federalism
at this time. The Administration can again issue strong support
for no-fault on a state by state basis, and it can consider other
ways to help the states help themselves.
Finally, it should be noted that informal observers expect a
substantial increase in insurance premiums for auto insurance
next year. This fact (if it occurs) together with the fact that the
House has not yet considered the matter in depth may speak for
an Administration position such as that set forth above, i.e.,
Oppose S. 354 at the present time, but
await the development of further facts
in Congressional hearings before taking
a firm position.
THE CHAIRMAN OF THE
COUNCIL OF ECONOMIC ADVISERS
WASHINGTON
May 2, 1975
MEMORANDUM FOR JERRY JONES
RE: Federal No-Fault Motor Vehicle Insurance
Essentially this issue involves matters and choices
about which the Council of Economic Advisers has little
to say. We do see some merit, however, in the Justice
Department's reservations regarding the proper role of
the Federal government in this matter.
Alan R Greenspan
AMERICAN REVOLUTION WENTENNING
1776-1976
THE WHITE HOUSE
WASHINGTON
May 2, 1975
MEMORANDUM FOR JIM LYNN
FROM:
L. WILLIAM SEIDMAN
SUBJECT: Federal No-Fault Motor Vehicle Insurance
The President has a long record of supporting the position
that no-fault motor vehicle insurance is a state issue.
Since, as a general policy, we are attempting to reduce
federal regulation, I see no reason to change or transcend
that policy in this case.
If the citizens of a state wish to adopt or reject no-fault
insurance, they can do it without the help of those of us
in Washington, D.C. All too often, what begins as a good
idea ends up as federal regulation, encrusted with barna-
cles.
RALD. LIBRARY GERALD.R FORD
THE WHITE HOUSE
WASHINGTON
ACTION
May 2, 1975
MEMORANDUM FOR:
THE PRESIDENT
FROM:
SUBJECT:
NO-FAULT JIM CANNON July AUTOMOBILE
INSURANCE
Secretary Coleman is scheduled to testify on no-fault
automobile insurance on Monday, May 5.
The purpose of this memorandum is to seek your guidance on
this issue.
Background
At the consumer meeting in April, you asked me where we
stood on the no-fault automobile insurance issue.
Jim Lynn has prepared a memo discussing the issue (Tab A).
Issues and Options
Two basic issues are presented:
Issue #1 Should the Federal Government mandate State
Governments to adopt mandatory automobile
insurance coverage using a no-fault system?
Arguments for:
The only way in which the remaining States that
do not now have mandatory coverage and a no-fault
system will adopt such a system is through Federal
mandate.
There are likely to be significant dollar savings
to the consumers through the adoption of a no-
fault system.
- 2 -
The establishment of uniform minimum Federal
standards will ease the administrative burdens
imposed on insurers by virtue of the current
patchwork quilt of differing State laws and
will simplify recoveries by insureds.
Arguments against:
Insurance regulation, automobile and drivers
registration, enforcement of traffic laws and
court adjudication of automobile-related dis-
putes have traditionally been a responsibility
of the States. Federal legislation establishing
minimum standards for no-fault would encroach
upon State responsibility and run counter to your
philosophy relating to the decentralization of
government.
Sixteen States now have a no-fault system
covering 42 percent of all licensed drivers.
Nine other States have adopted "add-on" laws
which provide some form of no-fault coverage.
Most States not now having no-fault will
consider no-fault proposals this year. If
California adopts a no-fault law, over 50
percent of the Nation's licensed drivers will
be covered by no-fault.
The National Governors Conference opposes the
adoption of national no-fault or mandated
standards for automobile insurance.
Options
1. Support Federal minimum no-fault standards.
Those favoring this option include Secretary
Coleman, Secretary Hills, Virginia Knauer and
Jim Lynn.
2. Continue to favor State action and oppose
Federal no-fault legislation.
Those favoring this option include the Attorney
General, Phil Buchen and Jim Cannon, and Bill
Seidman.
FORD LIBRARY & GERALD
- 3 -
Recommendation
I recommend you select option 2.
Decision
Option 1
(Coleman, Hills, Knauer, Lynn)
Option 2
(Attorney General, Buchen, Cannon)
Issue #2 If you decide to support some Federal involvement
in no-fault automobile insurance, what approach do
you favor?
Options
There are essentially two alternatives being actively
considered.
1. Alternative One
The Magnuson-Hart Bill (S.354). This sets
minimum no-fault standards, and each State
must pass laws conforming to these standards.
If the Secretary of DOT determines that the
State does not meet the standards, the Federal
law automatically pre-empts the State insurance
laws.
Arguments for:
This is the bill which passed the Senate last
year. It is the stronger of the two alternatives
and has very strong labor support. (The unions
see no-fault as a future bargaining objective
as part of a package of employer-financed coverage.)
Arguments against:
This involves the most direct Federal involvement
and could well lead to an increased Federal role
in the future (e.g., in setting rates or coverage
requirements). The Attorney General questions
the constitutionality of requiring the States to
administer a Federal insurance law if they fail
to adopt a similar one of their own.
FORD is LIBRARY DERALD
- 4 -
2. Alternative Two
Amended S.354 (Kemper Plan) provides that the
Governor of each State must certify to the
Secretary of DOT that his State law meets the
Federal no-fault standard. If the Secretary
questions the certification, he must submit the
issue to the courts, which would then determine
whether or not the State law conformed with the
Federal standards. If the court determines
that the State law does conform, there would
be no further Federal role. If the court
determines that the State law does not conform,
the Secretary must (no discretion) withhold
Federal highway funds from that State.
Arguments for:
Limits Executive Branch involvement to essentially
a passive role and, therefore, the Federal role
is less likely to increase in the future.
Arguments against:
Will likely be opposed by highway program
advocates. Gives the courts responsibility
for determining whether complex State insurance
laws conform to Federal standards.
Decision (If you decide to support some Federal
no-fault law)
Option 1 Support Magnuson-Hart Bill (S.354).
Those favoring this option include
Secretary Coleman and Virginia Knauer.
Approve
Disapprove
Option 2 Support highway fund cut-off approach.
Those favoring this option include the
Attorney General, Phil Buchen, Jim Lynn.
Approve
Disapprove
GLEALD" FORD LIBRARY
THE WHITE HOUSE
WASHINGTON
ACTION
May 2, 1975
MEMORANDUM FOR:
THE PRESIDENT
FROM:
SUBJECT:
NO-FAULT JIM CANNON You AUTOMOBILE
INSURANCE
Secretary Coleman is scheduled to testify on no-fault
automobile insurance on Monday, May 5.
The purpose of this memorandum is to seek your guidance on
this issue.
Background
At the consumer meeting in April, you asked me where we
stood on the no-fault automobile insurance issue.
Jim Lynn has prepared a memo discussing the issue (Tab A).
Issues and Options
Two basic issues are presented:
Issue #1 Should the Federal Government mandate State
Governments to adopt mandatory automobile
insurance coverage using a no-fault system?
Arguments for:
The only way in which the remaining States that
do not now have mandatory coverage and a no-fault
system will adopt such a system is through Federal
mandate.
There are likely to be significant dollar savings
to the consumers through the adoption of a no-
fault system.
- 2 -
The establishment of uniform minimum Federal
standards will ease the administrative burdens
imposed on insurers by virtue of the current
patchwork quilt of differing State laws and
will simplify recoveries by insureds.
Arguments against:
Insurance regulation, automobile and drivers
registration, enforcement of traffic laws and
court adjudication of automobile-related dis-
putes have traditionally been a responsibility
of the States. Federal legislation establishing
minimum standards for no-fault would encroach
upon State responsibility and run counter to your
philosophy relating to the decentralization of
government.
Sixteen States now have a no-fault system
covering 42 percent of all licensed drivers.
Nine other States have adopted "add-on" laws
which provide some form of no-fault coverage.
Most States not now having no-fault will
consider no-fault proposals this year. If
California adopts a no-fault law, over 50
percent of the Nation's licensed drivers will
be covered by no-fault.
The National Governors Conference opposes the
adoption of national no-fault or mandated
standards for automobile insurance.
Options
1. Support Federal minimum no-fault standards.
Those favoring this option include Secretary
Coleman, Secretary Hills, Virginia Knauer and
Jim Lynn.
2. Continue to favor State action and oppose
Federal no-fault legislation.
Those favoring this option include the Attorney
General, Phil Buchen and Jim Cannon, and Bill
Seidman.
- 3 -
Recommendation
I recommend you select option 2.
Decision
Option 1
(Coleman, Hills, Knauer, Lynn)
Option 2
(Attorney General, Buchen, Cannon)
Issue #2 If you decide to support some Federal involvement
in no-fault automobile insurance, what approach do
you favor?
Options
There are essentially two alternatives being actively
considered.
1. Alternative One
The Magnuson-Hart Bill (S.354). This sets
minimum no-fault standards, and each State
must pass laws conforming to these standards.
If the Secretary of DOT determines that the
State does not meet the standards, the Federal
law automatically pre-empts the State insurance
laws.
Arguments for:
This is the bill which passed the Senate last
year. It is the stronger of the two alternatives
and has very strong labor support. (The unions
see no-fault as a future bargaining objective
as part of a package of employer-financed coverage.)
Arguments against:
This involves the most direct Federal involvement
and could well lead to an increased Federal role
in the future (e.g., in setting rates or coverage
requirements). The Attorney General questions
the constitutionality of requiring the States to
administer a Federal insurance law if they fail
to adopt a similar one of their own.
- 4 -
2. Alternative Two
Amended S.354 (Kemper Plan) provides that the
Governor of each State must certify to the
Secretary of DOT that his State law meets the
Federal no-fault standard. If the Secretary
questions the certification, he must submit the
issue to the courts, which would then determine
whether or not the State law conformed with the
Federal standards. If the court determines
that the State law does conform, there would
be no further Federal role. If the court
determines that the State law does not conform,
the Secretary must (no discretion) withhold
Federal highway funds from that State.
Arguments for:
Limits Executive Branch involvement to essentially
a passive role and, therefore, the Federal role
is less likely to increase in the future.
Arguments against:
Will likely be opposed by highway program
advocates. Gives the courts responsibility
for determining whether complex State insurance
laws conform to Federal standards.
Decision (If you decide to support some Federal
no-fault law)
Option 1 Support Magnuson-Hart Bill (S.354)
Those favoring this option include
Secretary Coleman and Virginia Knauer.
Approve
Disapprove
Option 2 Support highway fund cut-off approach.
Those favoring this option include the
Attorney General, Phil Buchen, Jim Lynn.
Approve
Disapprove