Insurance Companies Never Rest in Efforts to Limit Liability
The influence of insurance companies in the United States is reflected everywhere: in the practices of large corporations and local businesses, in the medical care our doctors feel free to provide, in caps on medical malpractice and other jury awards in civil cases. Insurance companies work and lobby ceaselessly for "tort reform" legislation, the key goal of which is to limit liability. But they don't limit themselves to lobbying for sweeping legislation—smaller bills can slip through state legislatures with far less fanfare.
Don't like the verdict? Shop for a better jury.
Corporations in Alaska are lobbying in favor of a Senate bill that could move personal injury cases based in rural areas to larger urban centers. These companies are surprisingly frank about their motivations: rural juries award too much money. Naturally, corporations don't enjoy being on the wrong end of big verdicts, but it's the insurance companies whose voices are really being heard.
Fearful of large verdicts in rural areas, insurance companies have taken to settling those cases—often for more money than they think they're legitimately worth. Having made that decision, the insurance companies find that providing coverage in rural areas puts them at risk, and so corporations are left with a choice between paying higher insurance premiums and discontinuing business in the rural areas.
The "solution" currently before the legislature would allow corporations to move cases to the area in which they are headquartered. The theory is that this move would regularize jury verdicts and take some of the financial risk out of operating in small Alaska communities. However, the real impact is more far-reaching. In addition to the lower verdicts insurance companies expect in larger cities, personal injury plaintiffs would be faced with travel to testify in their own cases—another benefit for the insurance companies, since it would likely deter some plaintiffs from filing.
Eliminate no-fault insurance law.
Insurance agents from around the state of Florida converged on the Florida Capitol last week to urge legislators to do away with the state's Personal Injury Protection (PIP) insurance. The state currently requires a minimum of $10,000 in PIP coverage, which pays medical expenses, some lost income, and a small death benefit regardless of fault in a motor vehicle accident.
Insurance companies claim that the provision encourages fraud, that medical providers over bill because they know this coverage is in place, and that because of those issues, insurance rates rise. Over the objections of doctors, lawyers, hospitals and clinics, insurance companies are pushing legislators to let this provision "sunset" in 2007.
Millions donated by backers of lawsuit limitation legislation.
Florida law has long allowed for joint and several liability when there are multiple defendants in a lawsuit. That means that any defendant found liable can be compelled to pay most or all of the damages. So, if someone is injured in an accident and two parties are found to be at fault, but one is a major corporation and the other an individual, the burden falls more heavily on the corporation, whose assets and insurance company make collection easier and more likely. Big businesses argue that this encourages their inclusion in law suits where no legitimate claim exists.
The Orlando Sentinel recently reported that nearly 2/3 of the reported $7.8 million collected by the Florida Republican Party during the latter half of 2005 came from organizations supporting a change in the liability structure, with insurance companies supplying more than $800,000 of that money.
Lobbying is continuous.
When a major tort reform bill comes up for a vote, news coverage typically lets us all know about it. Then, those who are concerned might take the time to write or call their representatives and senators and make their positions clear. But insurance companies don't wait for those specific issues to arise—they bring them to the forefront every day. Anyone who is concerned about the ability of those injured by negligence to receive fair compensation should be aware of the smaller pieces that will chip away at those rights just as surely as sweeping tort reform.