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16 Transcript 1 (1971-1972)

handle is hein.barjournals/tscb0016 and id is 1 raw text is: NO-FAULT INSURANCE ON THE NATIONAL LEVEL

A proposal to establish nationwide no-
fatlt autonlobile insurance was inlroduced
in tile United States Senate in February of
this year, and is, as of this writing, in the
Senate Commerce Committee. The bill was
extensively revised in Conmittee. The ver-
sion used in preparing this summary is Com-
millee Print One, July 1971.
The no-fault instlirance bill, S. 945, was
inlroduced by Senator Hart, on behalf of
himself and Senator Magnuson, as part of
a three-bill package. S. 945 provides for
nationwide, compulsory no-fault insurance;
S. 946 permils group motor vehicle insur-
ance; and S. 947 would amend the Internal
Revenue Code of 1954 to exclude from
gross income contributions by employers to
plans providing motor vehicle insurance
coverage for employees. Only 3. 945, the
'Hart bill, will be discussed helr in.
No-fault insurance is presently in effect in
Puerto Rico, Massachusetts, Delaware, Illi-
nois and Florida. Recent newspaper reports
state that the experience thus far has been
favorable, restulting in lower costs and
quicker settlements. However, it is ob-
viously too soon to determine the true value
of no-fault insurance in terms of protective
and monetary benefits received per premium
dollar paid.
It has become apparent in recent years
that tile present system of motor vehicle
liability  insurance  needs  comprehensive
examination. In the eyes of the public, such
insurance is too expensive. The insurance
industry is quick to point out that the high
cost of insurance is the result of excessive
claims, high verdicts in tort suits, high
cost of repair of both car and body. and
high overhead. A great part of the blame
for this high cost is laid to our present sys-
tem of tort liability, with litigation being
said to be encouraged by permitting lawyers
to charge contingent fees. Fo these charges,
G General Counsel S. C. t'ithltc Serstce Authority
Moncks Corner, S. C.

the legal profession asserts that contingent
fees permit the poor to claim their just rights
which would otherwise be denied them, and
that verdicts are not. as a general rule, exces-
sive. And so the arguments go back and
forth, with the public cauight square in the
middle. It is in direct appeal to the paying
public that no-faull insurance proposals are
addressed, with their promises of lower
prenlium rates and just settlements quickly
Every member of the legal profession
owes it to the public, the legal profession,
his clients and himself, to examine no-fault
proposals carefully and take his stand on
the basis of truc insurance value received
for the premium paid. It is for this purpose
that the following summary of the Hart
bill, S. 945, is offered.
General. The main features of the I-art
bill are: (t) nationwide, compulsory no-
fault insurance; (2) almost complete tort
immunity; (3) an assigned claims plan; and
(4) extensive rule making power vested in
the Federal government, probably in the
Secretary of Transportation (hereinafter the
This bill, to be cited as the National No-
Fault Motor Vehicle Insurance Act, is just-
ified on the basis of the Congressional
power to regulate interstate commerce. Al-
though specific provisions of the bill may
be open to attack on constitutional grounds,
there is little doubt that the regulation of
motor vehicle insurance will be held to be
a valid exercise of Congressional power.
Compulsory Insurance. Section 4 of the
Hart bill provides that a qualifying no-
fault policy, the requirements of which are
set forth in Section 5, is a prerequisite to
the registration, operation or use of a motor
vehicle in any State at any time. The in-
surance requirements may be satisfied by
providing a surety bond, proof of qualifica-
lions as a self-insurer, or other securities
deemed sufficient by the Secretary.
A knowing violation of the foregoing in-

surance requirements is declared to be a
misdemeanor punishable by a fine of not
to exceed $1,000 or imprisonment for a
period not to exceed six months, or both.
States are granted concurrent utliority to
prosecute such offenses.
States are expressly forbidden to require
any other insurance or security as a condi-
tion precedent to the ownership, registra-
tion, operation or use of any motor vehicle
that is inconsistent with a qualifying no-
fault policy.
l)efinitions. To Lunderstand the more im-
portant provisions of tie Hart bill, the
terms economic loss and net economic
loss must be fully defined. 'The benefits
payable under the no-fault insurance policy
required by the Hart bill are stated in terms
i I net econonic loss.
Economic loss means the sum of (I) all
appropriate and reasonable expenses neces-
sarily incurred for medical and related ser-
vices; (2) $1,000 per month, or the monthly
earnings (after income taxes) lost, which-
ever is less; and (3) all other appropriate
and reasonable expenses necessarily incur-
red, including the cost of substitute services,
funeral expenses, and attorneys' fees and
costs to the extent provided in Section 8 of
the Hart bill.
Net economic loss means economic loss,
as defined above, less any benefits received
from any public health insurance or plan,
and less any benefits received from any
private insurance or plan which contains
explicit provisions making its benefits pri-
mary to the no-fault benefits.
In the case of a person regularly emi-
ployed or self-employed, monthly earnings
means one twelfth of such person's average
annual compensation or earnings at the time
of injury or death. In the case of a person
not regularly employed or self-employed the
term ieans one twelfth of the anticipated
compensation from the time such person
(Continued on Page 4)


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