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Feb 01, 2000
Yes on Props. 30 and 31: Fair incentives for insurers to do the right thing
Sacramento Bee EditorialVoters, beware: Propositions 30 and 31 on the March ballot are trick questions. Insurance companies have already spent millions of dollars to qualify the two measures for the ballot and will spend millions more trying to persuade voters to vote No. The public interest is best served by voting Yes.
A Yes vote on Propositions 30 and 31 affirms two carefully crafted laws already approved by the Legislature and signed by Gov. Gray Davis to protect innocent parties when a reckless driver's insurance company gives them the runaround.
Here's an example of the problem the laws seek to address: An innocent driver sitting at a stop sign is rear-ended by a negligent driver. The innocent driver's car is totaled and she is badly injured. Fault is clear, but the negligent driver's insurance company refuses to pay. Those funding the "Yes on 30 and 31" campaign, primarily consumers and their attorneys, argue persuasively that too many insurance companies deny or delay payment or low-ball their settlement offers, particularly when the injured party is old, sick or poor. The longer insurance companies delay settlement, the longer they hold on to their money, the more interest and profits they earn.
The bills approved by the Legislature and now before the voters would allow innocent victims under very narrow circumstances to sue insurance companies for "bad faith" when the company unfairly and fraudulently denies their legitimate clams.
Insurance companies argue that the measures would drive up premium costs for everyone by increasing litigation, but the protections against frivolous bad-faith lawsuits are strong. Victims may not sue for bad faith until they've already gone to court and received a judgment for the injuries or damages suffered in the car accident that is greater than what they sought from the insurance company originally. They may not sue if they've accepted the insurance companies' settlement offer. They may not sue if the case involves less than $50,000 -- the vast majority of cases at issue -- and the insurance company agrees to arbitration.
The protections for consumers and insurance companies are fair and equitable. Vote Yes on Propositions 30 and 31.
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