TRIAL LAWYERS--who hate the thought of any genuine no-fault automobile insurance system that might cut off their cut of every car- owner's mounting premiums--must love Maryland's messed-up insurance system. As a series by staff writer Jackson Diehl on car insurance in this state has been outlining in revealing detail, the lawyers are getting the best of two bad worlds out of Maryland's hybrid system:
Under the misleading labels of "no-fault" and "reform"--neither of which can take constructive effect when any trial lawyer can still file a costly damage suit at the drop of a fender--Maryland has created an insurance monster. Unfairly, it succeeds in giving no-fault a bad name and litigators a good slice of every insurance dollar.
By blaming the no-fault concept--which couldn't begin to work in this dual "add-on" system, anyway--lawyers can perpetuate an expensive insurance system that encourages higher premiums, a growing number of illegal uninsured drivers and "redlining," whereby the insurance companies refuse to sell standard policies in low-income areas.
As if this weren't bad enough, the combination of premium-boosting excuses has increased the costs, monitoring and financial fragility of Maryland's state- operated fund for victims of redlining. Meanwhile, personal injury lawyers, with solid connections in the state legislature, make their killings on "pain and suffering" litigation, which, when all is said and litigated, costs more people time and money than it rewards.
There is a better way, and as people in other states know, it includes a genuine no-fault system--under which fast and fair compensation is paid directly to victims in the majority of accidents, instead of awaiting time-consuming suits and settlements. Insurance premiums could deliver more coverage per dollar than they do when litigation must accompany any claim above a few thousand dollars.
Ideally, minimum national no-fault standards would bring some order and efficiency to what is now a confusing and costly hodgepodge of state systems. This could be accomplished without diminishing state authority over insurance systems--as called for in legislation considered by Congress over the years. But until legislators on Capitol Hill and in state capitals sense enough support to resist the money and influence of organized trial lawyers, the insurance mess will continue to plague those states with traditional or hybrid automobile insurance systems.