If Only Mass Were Mich

From Robert Morse: “The auto insurance companies in Masssachusetts in their infinite wisdom have decided that, because they could not get a rate increase of the size they wanted, they should lower the safe driver credit from 15% to 5%. And now they plan on doing away with it completly. I know you had an initiative in Ca. to pay for auto insurance at the gas pump. Since gas is relatively low priced now, this same idea may fly in Massachusetts. We have always had high rates here. Please help, and let me know if there is something I can do here to get the ball rolling.”

Pay-at-the-Pump might be a problem in Massachusetts. Too many people live within a short distance of other states and could just run across the border for gas.

But it would be very easy to solve the problem even without Pay-at-the-Pump, if only the lawyers would allow it. (They won’t.) Namely: just adopt the Michigan law. It’s been working fine for 25 years. People in Michigan have vastly better protection against serious injury than you do, yet pay lower premiums. This is possible because in Michigan the incentives to invent or exaggerate personal injury are removed (which makes a huge difference) and because lawsuits are greatly reduced.

Massachusetts actually has the worst of both worlds. All you need to be able to sue (the “threshold”) is $2,000 in medical expenses and lost wages — which gives people an incentive to build up that much in expenses. An MRI, a series of chiropractic visits . . . it’s not hard to do.

It used to be even lower. From 1971 to 1988, the “threshold” was $500. Then it was raised to $2,000 to try to cut down on all the lawsuits and fake claims. And guess what happened? The following year, the average number of doctor’s and chiropractic visits after an auto accident jumped from 13 to 30.

And still the good people of Masshachusetts, half of whom have PhD’s, haven’t been able to figure out that the personal injury lawyers, who will do anything to avoid going to a pro-consumer Michigan-style system, have bamboozled them on this issue. Understandably, the lawyers want the system just the way it is. It works great — for them. And by and large, they write the laws.