INSURANCE: Paying the Damages

For both public and insurance companies, the uninsured motorist has long been a troublemaker. Not only does he often drive an old car in rundown condition, he also has little or no cash to pay for the damage he does. As a result, the pressure has been building up in state after state for compulsory liability insurance, now common in Europe but so far adopted in only one U.S. state (Massachusetts). The insurance industry vigorously opposes the idea for fear of political rate-setting and excessive losses from bad-risk drivers.

One of the hottest arenas of the fight for compulsory insurance has been New York state, where uninsured drivers, though they number only 10% of the 4,500,000 total, annually kill an average of 100 persons, maim 1,000 more and damage $7,500,000 worth of property. Last week the state's insurance industry, hoping to ward off compulsory insurance, put into effect the first voluntary plan to cover uninsured drivers, hopes that insurance companies in other states will copy it. The plan, offered by most New York companies, automatically insures every New York driver who now carries liability coverage, along with members of his household or guests in his car, against bodily (but not property) injury that is the fault of any uninsured driver. Most of the state's mutual companies (onefourth of the total) will also pay damages regardless of who is to blame. The additional coverage (up to $10,000 per person but not more than $20,000 in all) is now free but will cost from $2.50 to $4 to drivers who choose to keep it when they renew their policies.

Compulsory insurance advocates quickly noted that the plan unfairly makes the victim pay, not the offender, that it makes no provision for pedestrians who have no policies at all.