Hawaii is a state that chafes under its high auto insurance premiums, high proportion of uninsured drivers, and all the rest. The legislature passed a law a couple of years ago that would have cut rates 45% by cutting out almost all the lawsuits between drivers and eliminating the incentive for most of the fraud, but Governor Cayetano — a former trial lawyer — vetoed it. A big win for the trial lawyers of Hawaii, a modest win for the insurance companies (who don’t want to see the business shrink by 45%), and a big loss for Hawaii motorists.

The only insurer that pushed hard for the legislature to override the veto was State Farm, which, as a mutual insurer, doesn’t mind if the business shrinks 45%. (State Farm executives get no stock options or profit shares. At Allstate or Geico, by contrast, executives’ first goal is to see their stock rise — which doesn’t happen when premiums drop 45%.)

Anyway, the issue was recently revisited, under renewed pressure for lower rates. And this time, a way was found. Governor Cayetano got involved in the legislative process again and saw to it that the “threshold” beyond which drivers could sue each other was weakened even further. Great news for the lawyers. Meanwhile, to cut premiums, they reduced their mandatory minimum personal-injury protection (PIP) from $20,000 to $10,000. (Reduce it to zero, and premiums for those electing the zero coverage could fall even further.)

In other words, rather than cut back on legal fees and the incentive to commit fraud, they mainly cut back on benefits.

I do not worship pagan gods, because I don’t believe in them, frankly. And I don’t believe in them because if there were pagan gods, I know volcanoes on all seven Hawaiian Islands would have erupted over this latest legislative twist. Miraculously, all the lava would have fallen on the Governor’s mansion.


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