A Metro story yesterday gave the incorrect figure for the maximum amount of medical payments accident victims could collect from their insurance companies under the District's no-fault auto insurance law. The correct figure is $100,000.
The District's insurance companies and the city's trial lawyers climbed into the ring again yesterday at a D.C. City Council hearing for a rematch of their monumental 1982 fight over mandatory no-fault auto insurance for the city's drivers.
The insurance companies, which won three years ago, predicted yesterday that recent changes proposed by Mayor Marion Barry would result in insurance rate increases of 11 to 60 percent while enriching the city's trial lawyers. The current law has worked as intended and has held rates down, they told the council's Committee on Consumer and Regulatory Affairs at a hearing on the proposed modifications.
The trial lawyers responded by charging that insurance rates for D.C. drivers have skyrocketed as a result of no-fault in an unwarranted windfall to the insurance companies, that accident victims have not been properly compensated, and that the city's lawyers get just as many car accident cases now as before no-fault.
The lawyers are supporting the changes Barry is seeking in the law, which went into effect in October 1983. The mayor has proposed eliminating a requirement that all drivers buy personal injury protection (PIP) that compensates them for up to $100,000 for injuries regardless of fault in an accident.
The proposed amendments also would eliminate the law's most controversial provision, a restriction against suing for nonmedical pain and suffering unless an accident victim had at least $5,000 in medical bills or had suffered significant disfigurement, disability or death. Under the no-fault law, victims are to collect from their own insurance companies for bills up to $5,000 regardless of fault.
U.S. District Court Judge Oliver Gasch ruled that provision unconstitutional last December, and that ruling is being appealed.
August P. Alegi, vice president of Government Employees Insurance Co. (Geico), the city's largest writer of automobile insurance, said current basic no-fault coverage costs $225. With minimum coverage under the proposed bill, this would rise 11.3 percent to $250. For comparable no-fault coverage, the premium would rise 25.4 percent to $282.20 a year, Alegi said.
"In effect, the bill reverses all of the consumer-oriented provisions passed by the council in 1982 and substitutes a system that provides little to the public at an exorbitant cost," Alegi told the committee.
Edward L. Norwind, testifying for the Association of Plaintiffs Trial Attorneys, called no-fault "a failure" and said "our motorists are paying and will pay steadily increasing rates."
Marguerite Stokes, superintendent of the D.C. Insurance Administration, which must approve any insurance increase, said the cost of the minimum mandatory automobile insurance in the District has increased by 8 percent on the average from October 1983 to the present. She said there was no way to compare premiums before and after no-fault took effect, however.
Stokes' boss, Carol Thompson, director of the D.C. Department of Consumer and Regulatory Affairs, said it is "impossible to predict" what would happen to auto insurance premiums if the mayor's proposed changes are adopted, and warned the council to be skeptical of estimates.
Council member John Ray (D-At large), the committee chairman, had opposed the no-fault legislation when it passed the first time. He said the mayor had "some pretty good suggestions" and that he hopes to move on legislation in September.
Many accident victims have complained that their automobile insurance under the no-fault system does not cover all their medical treatments needed as a result of their accidents, Ray said.
"I think there is a majority on the City Council that thinks there should be some adjustments in no-fault," Ray said, though he added that these may not be the same as those the mayor wants.