SHALL ALL AUTOMOBILES BE INSURED?
Bang, Armand C.
Shall All Automobiles Be Insured? Massachusetts Is First Stale to Pass a Compulsory Law, After Years of Agitation; Other States Watch Workings By ARMAND C. BANG Mr. Armand C. Bang, of Newton,...
...The cost of insurance under the present compulsory Massachusetts Automobile Liability law will average over $25 for passenger cars, and possibly $75 for trucks, while the rates necessary for maintaining a solvent Exclusive State Fund will be only $12 for passenger cars and $25 for trucks, rates which careful estimates indicate may be lowered to $S for cars and $17 for trucks...
...it has been in operation less than one year, it is impossible at this writing to say how it will work out, but it may be safely predictedthat the victims of automobile accidents will benefit far less than will our lawyers and insurance companies...
...77 provides an unlimited amount in that it guarantees up to $5,000 for each person injured or killed whether there be one, or ten, or more, injured in the same accident...
...The first step in this direction was made when in 1925 the Massachusetts legislature, after several years of study of the subject, enacted the first Compulsory Auto'mobile Insurance law in the United States, to take effect from January 1, 1927...
...77 calls for the establishment of a system 6f Compensation insurance for the benefit of persons injured, and the heirs of those killed, by automobiles in the State of Massachusetts, and such other States, and Canada, as shall in time enact a similar law and enter into a reciprocal arrangement with Massachusetts regarding accidents «aused in such other states, or in Canada, by Massachusetts cars...
...The last bill introduced is Senate bill No...
...Compensation paid by the State Fund cannot be attached for debt nor assigned, and inasmuch as it is to be paid in weekly instalments, is not likely to be squandered in fake stock or other unhealthy ventures...
...Actuarial estimates of Mr...
...or, if his wages were small, and his opportunities to save for a rainy day limited, he often found himself and his family entirely dependent upon charity...
...The bill is offered as a substitute for the present automobile Liability insuance law which was passed by the 1925 Massachusetts legislature...
...He bore the whole burden himself...
...Miles M. Dawson, of New York City, made over a period of years, indicate that only 25 per cent to 30 per cent of all premiums now paid in the United States by automobilists for insurance against liability for personal injury go to the victims of the accidents...
...Columbia Law Review, February, 1925, "Compulsory Compensation Insurance," by id...
...212, U. S. Bureau of Labor Statistics...
...Liability insurance, as you know, is not a means of insuring compensation to the injured...
...Why the legislature, cognizant as it must have been of past experience with Liability inusurance, should enact this law instead of a law calling for Compensation insurance, is, and will probably always remain a mystery...
...77 of this year, as follows: Senate bill No...
...The...
...On the contrary, it is a means of protection to the owner AGAINST paying compensation and was outlawed in Massachusetts in the year 1912 in resoect to industrial accidents through the passage of the Workmen's Compensation Act...
...Handled by Sixty Companies THE insurance under the present Massachusetts compulsory law is handled by some sixty odd private companies, apparently competing against each other although the rates are the same for all companies...
...But, again experience has shown that little or nothing can be gained, as the victim must then hire a lawyer whose fee, coupled with court expenses, ordinarily absorbs the major part of the damages awarded...
...a problem which apparently is now working out in England.-—Managing Editor...
...The Compensation for injury resulting in temporary total incapacity is fixed at $4 per day for adults and $2 per day for children, which in conjunction with free medical and surgical care during the total period of incapacity is believed adequate to keep the average person in fuel until he is fully restored...
...HAT we kill over 20,000 and injure over 500.000 persons annually in the U. S. A. by automobiles is bad enough, but that we add injustice to injury is worse, inasmuch as, while we may be unable to prevent accidents, it is certainly within our power to make it mandatory upon the owners to pay for injuries inflicted on innocent vh> tims, over one-half of whom are at present unable to collect any damages...
...The owners will pay their premiums to the Fund over the counter together with their registration fees, a receipt for same being printed on the registration certificate, so there will be no loss of time to the owners in securing insurance certificates, nor any discrimination as to "desirable" or "undesirable" risks...
...The victim must prove that he, himself, did not contribute in the slightest degree to the accident...
...Features of New Law AS THE readers of the LA FOLLETTE Magazine are already conversant with the usual 5-10,000 liability insurance policy issued by private insurance companies, no explanation of the Massachusetts law is needed here except as set forth in the following comparison with Compensation insurance provided through the establishment of an Exclusive State Automobile Fund as advocated by the writer and submitted to the Massachusetts legislature for several years...
...In other words, of the $18,000,-000 to $20,000,000 which it is estimated that Massachusetts automobile owners must pay to the insurance companies in 1927 for liability insurance under the present law, only about $5,000,000 to $6,000,000 may be expected to reach the victims...
...The enactment of the Workmen's Compensation laws was a recognition of the fact that industrial accidents should not be borne entirely by the workmen, or even the community at large, but should be charged up in part to the industry itself...
...He is a man of wide business experience whose favorite hobby is statistics and research...
...In order to be able to collect damages under a liability policy, the victim must prove that the driver of the motor vehicle was 100 per cent at fault...
...Same Compensation Theory fTpHE SAME considerations which prompted A the enactment of Workmen's Compensation laws in our several states, now compel the enactment of laws for the protection of persons injured by automobiles on our highways...
...compulsory insurance premium i<= a direct tax on automobiles of which we now have abeut 22 millions in the United States, so, in these days when statesmen are straining every nerve to reduce taxes, there can be no doubt that real statesmen in every State of the Union will welcome the opportunity of saving the automobile owners of the United States an unnecessary and unproductive expenditure of some $250,000,000 annually by establishing Exclusive State Automobile Funds in each State...
...American Bar Association Journal, July 1924, "The Curse of the Personal Injury Suit, and a Remedy," by Judge Robert S. Marx...
...Armand C. Bang, of Newton, Mass., whose article on Compulsory Automobile Insurance we publish in this issue of LA FOLLETTE'S, is a layman who some six years ago got the idea that there must be a way in which automobile insurance could be "put within reach of everybody...
...Rates for Compensation THE Compensation for death is fixed at $100 per year of age of the victim, in conformity with the Dublin and Whitney formula used as, a basis in "Waste in Industry," issued by the Federated Engineering Societies of America under the auspices of Secretary of Commerce, Herbert Hoover...
...NOTE: Students of this subject will find interesting information in the following...
...301, U. S. Bureau of Labor Statistics, a "Comparison of Workmen's Compensation Insurance and Administration...
...His study of automobile insurance brought him in contact with health statistics, resulting some three years ago in the introduction of jet another bill of importance, calling for the establishment of a Stale Health Fund for the purpose of furnishing compensation to sick people and paying our doctors for preventing disease in preference to curing it...
...Wrhile the present Massachusetts Automobile Liability Insurance law provides only up to $10,000 where two or more persons are killed or injured in one accident, Senate bill No...
...It was humanitarian as well as good business to alleviate suffering, to rehabilitate the injured, and to stop creating paupers...
...He settled in the I'nitcd States twenty-seven years ago...
...But, we are now in a period where larger and larger units are constantly being created Sor the handling of industrial and commercial enterprises, combinations which are more efficient and more economical than the former smaller units, so, why let sixty odd small companies muddle with this business when it can be done far more efficiently, and far more economically, through one single agency, the Exclusive State Fund ? The average expense of Stock Insurance Companies is 40 per cent of the premium, Mutuals 20 per cent, while the average expense of Exclusive State Funds such as have operated in se\eral States for years under the Workmen's Compensation Acts, is only 4 per cent...
...Bulletin No...
...Bulletin No...
...Only 23 per cent Goes to Injured SUPPOSING, however, that the insurance company admits liability, then the victim, in the majority of cases, has got to accept what the insurance company is willing to pay, or go to court and sue...
...Finding that the only way in which a material reduction could be accomplished was to compel everybody to insure on a basis similar to the Workmen's Compensation insurance, he set to work and introduced his first hill in the 1922 legislature, and it is asserted in Massachusetts that it was the pressure of the State Fund bill which put the present compulsory automobile liability law on the statute books as early as 1925...
...The law compels owners to take out $5,000-$10,000 Liability insurance with private companies and submit an insurance certificate to the Registrar of Motor Vehicles as a condition for obtaining registration...
...There will be no filing of insurance certificates...
...There will^hen be no question of liability or fault, nor w\;l there be any dorbt as to the amount of compensation a victim is justly entitled to, for the bill specifies what compensation shall be pai'i in addition to rr,t<iicaJ care...
...Having been connected with automobile insurance companies for two and one-half years following the war, he had met many people who claimed that they "could not afford" to buy insurance at the current high rates...
...Automobile accidents, however, happen so quickly and unexpectedly that, except in flagrant cases, it is almost impossible to say where the fault lies, and it is possibly correct that only about 20 per cent of the victims will ever be able to prove liability...
...An injured person, or his heirs, will receive the whole benefit...
...Furthermore, the average time consumed in fettling such court cases in the past has been about two and one-half years, so the money does not reach the victim when he really needs it...
...It is a co-operative, self-supporting Fund, the operation of which will entail no expense on the part of the State...
...Furthermore, a State Fund derives no profit out of other people's miseries as do the private companies...
...All these defects will be eliminated by substituting Compensation insurance as outlined in Senate bill No...
...Bang is a native of Denmark...
...Prior to the enactment of our Workmen's Compensation laws, the workman injured in industry, in a large percentage of cases, found himself without any legal claim for the loss, of his wages, his doctor's bills, and his suffering...
...The Exclusive State Fund cannot become insolvent...
...Public Ownership," by Carl D. Thompson, sections about social insurance...
Vol. 19 • November 1927 • No. 11
