Danbury Insurance Cost Reductions
Connecticut drivers would choose between two very different kinds of auto-insurance policies and widely varying prices under a bill that sputtered out of a legislative committee after a near-crash. The bill that emerged from the insurance and real estate committee could cut the cost of sections of Danbury insurance auto policy by 40 percent to 50 percent on average for consumers who restrict their rights to sue.
Consumers who chose insurance without restrictions on lawsuits could see average savings of 5 percent to 7 percent on parts of the policy, said Insurance Commissioner, who supports the plan.
The so-called "choice plan" would put Connecticut in the vanguard of states on auto insurance reform. New Jersey and Pennsylvania have adopted somewhat similar systems in recent years.
But some Connecticut legislators and lobbyists are warning that the choice bill is on a collision course with trial lawyers and is unlikely to emerge from the lawyer-dominated judiciary committee. The choice plan marks the third consecutive year that the insurance committee has tried to overhaul the state's universally maligned auto insurance system. Connecticut ranks among the top five states in auto insurance premiums in the nation.
The choice bill emerged Tuesday in a 15 to 6 vote, after the insurance committee passed by one vote -- then defeated by one vote -- an entirely different approach to reform.
Some legislators on the committee view the choice approach as a way to deal with insurers' and trial lawyers' battles on reform, and to give drivers some rate relief.
"It gets us off the mark with some new ideas and new proposals," said state Rep. Mary U. Eberle, D-Bloomfield. "I, for one, can't go back to the voters and say we didn't do anything again because of this stalemate."
Under the choice plan that would take effect Jan. 1, 2009, consumers would choose from two kinds of policies.
People who buy the more expensive policy would retain full access to the court system. Only they could sue, without restriction, for pain and suffering after an accident.
Drivers who chose the less expensive "no-fault" policy couldn't sue for pain and suffering in most cases unless they were very seriously injured. However, they could sue for medical bills and lost wages that aren't covered by their own insurance.
The choice plan would replace Connecticut's antiquated no-fault system, which all sides agree is letting most claims go to court and failing to curb rising premiums.
The current system allows injured people to sue when they have only $ 400 of medical bills. No-fault policies now provide up to $ 5,000 of benefits to policyholders to pay for medical bills and wage loss regardless of who caused an accident.
The Danbury insurance offers a full-lawsuit policy, which trial lawyers say is best for consumers, and a no-fault policy that is favored by insurers.
"We're forcing both sides to live up to their promises," said committee co-chairman. "If one side is not living up to its promises and expectations, then that will be apparent."
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