BOSTON — Bob Dole has endorsed a plan to reform the auto insurance system in the United States - a system that critics say encourages countless fraudulent and near-fraud injury claims.
Under present state and federal law, drivers buy insurance against being sued for medical payments and lost wages, as well as for so-called pain-and-suffering damages, all in the same package. If someone is injured, he or she tries to collect from the insurance company of the party that was at fault.
The provision for pain and suffering, says law professor Jeffrey O'Connell of the University of Virginia in Charlottesville, encourages some lawyers and clients to pile on irresponsible medical claims ranging from fraud to near fraud.
Republican presidential nominee Dole forged his plan with Michael Horowitz of the Hudson Institute in Washington. In your auto policy, you would buy coverage only for medical payments and wage losses incurred by other drivers. If you chose, you could also buy coverage for your own potential pain and suffering, but wouldn't need pain-and-suffering coverage related to other drivers.
The idea is to take the issue out of the courts. With such insurance, you are agreeing not to seek pain-and-suffering damages from the other party, and he won't claim it from you. It would be a modified form of no-fault insurance, without the chance for fraudulent claims.
RAND, a research group in Santa Monica, Calif., says the plan might save consumers $40 billion a year - $221 a car.