Supporters of a modified no-fault insurance plan for Maryland automobile drivers dominated a hearing before the Governor's Commission on Insurance.
The hearing, which was attended by about 40 people yesterday morning, was held to take testimony from the general public about insurance matters. What the commission got was a chorus of support for no-fault, with six of the 12 speakers supporting the proposed system.
The nine-member commission, which was appointed by Gov. William Donald Schaefer in April, is supposed to develop recommendations for the 1991 session of the General Assembly that begins in January.
"We urge the members of this commission to review carefully the choice no-fault option," said Miles Cole, director of business affairs for the Maryland Chamber of Commerce. "Your decision on this issue [and] its impact on the General Assembly may well determine whether Maryland consumers have the opportunity to realize significant savings on their auto insurance premiums," he said.
Cole represented the Citizens Choice Coalition, which is pressing for legislation that would allow automobile insurance customers to chose either a no-fault or traditional policy.
Under the traditional system, a person involved in an accident may sue the other person involved in the accident for monetary damages as well as pain and suffering. Insurance liability policies pay these claims.
With a no-fault system, the policyholder may not sue or be sued. Instead, the person's claims are paid by his or her own insurance company. Claims for pain and suffering would not be allowed, unless the customer buys a special policy covering that.
A traditional insurance policyholder could not sue a no-fault customer. However, the traditional customer has the option of suing his or her own insurance company for damages and pain and suffering.
Under a bill being drawn up by the Choice Coalition, consumers choosing the no-fault option would get a 20 percent cut in the cost of the insurance coverage that is required by law, Cole said.
"No-fault drivers would be guaranteed payment of claims within 30 days or their insurance company would have to pay them a 15 percent interest penalty," he said. "And they would be eligible for compensation no matter who is at fault."
Also supporting the no-fault option was David Secor, a Towson resident, who was hit by a car while he was riding his bicycle on Oct. 17, 1986. Despite severe injuries, $56,000 in medical bills and $50,000 in lost wages, Secor received nothing from the driver of the car after an extensive legal battle. "We won nothing, not a penny," he said.
"A no-fault auto insurance option would have solved this case, possibly years ago, saving time and money to the victims and the court system," he said.
Other supporters of the no-fault system related stories about how some motorists use the present system to pursue suspect cases to win large settlements from insurance companies.
No-fault was also endorsed by a representative of the Independent Insurance Agents of Maryland.
Clay M. Barnes, an attorney in Towson, was one of the few people who spoke against no-fault. Under the no-fault system, insurance companies could force policyholders to accept inadequate settlements, he said.
"The insurance company has the economic power to muscle the little guy into accepting a settlement of 50 percent," he told the commission. Barnes said the policy holder would have difficulty challenging the insurance companies unless he could recover legal fees and the cost of expert witnesses.
Referring to the no-fault proposal, Barnes said, "It's no panacea. It's a loser."
Maryland Citizen Action coalition, a consumer group opposed to no-fault, did not make a concerted effort to turn out people for the hearing, according to Andy Fellows, an organizer for the coalition. He said the group had "mixed feelings," about urging people to testify, particularly in light of the possibility of aggressive questioning by insurance executives on the commission. "We're not sure the commission is going to listen anyway," he said.
Fellows was part of the commission yesterday, substituting for Janelle A. Cousino, a member of the commission and the executive director of the coalition.
The commission is to hold another public hearing next Tuesday at 9 a.m. in Rockville at the auditorium of the Stella Werner Council Office Building at 100 Maryland Ave.