Why? The answer is money. According to Senator Marta Escutia, the Insurance Committee chairperson, car insurers received over $8.5 billion in premiums in the California market alone in 1997 . More remarkably, the carriers spent slightly more than $4 billion on claims during the same period. Never have automobile insurance companies had it so good. In fact, California is flooded with petitions by out-of-state carriers for permission to do business in California, the land of milk and honey.
The bad faith Restoration bill was an intelligent, thoughtful and extensively negotiated piece of legislation signed on by many California auto carriers, including the Mercury Insurance Group. They believed that this Bad Faith bill, as amended, is far better than the original bill. That original bill would have given lawyers the right to sue insurance companies immediately after the case settled. Governor Davis believed that bill was too punitive, and he insisted that the liberals in the legislature modify their bill to force the lawyers to try the lawsuit and obtain a verdict in excess of the original demand to settle. This was easier said than done. Additionally, and very important to the chiropractic profession, all P.I. cases under $50,000 would go to binding arbitration (the so called "safe harbor provision") if the carrier desired to avoid any bad-faith exposure.
How Important Is Binding Arbitration for Chiropractors?
Personal injury claims have fallen dramatically in California: over 50% in the last 10 years, according to the Judicial Council of the California Supreme Court. This fact is based on carriers aggressively fighting small P.I. cases, the so-called MIST (minor impact soft tissue) case. Many jurors disregard soft tissue injuries if car damage is minor. Chiropractors have seen their P.I. business drop. Most chiropractors can't find attorneys to handle MIST cases, even when the patient is seriously injured. Thousands of potential patients go untreated month after month.
What Can Be Done
Unless the consumer groups put together an energetic campaign, voters can easily be misled. Millions are being spent on TV spots throughout California. Insurance carriers are spending up to $2 for each signature to qualify for the March referendum. The chiropractic community cannot stand still. Too much is at stake. Honest people have been getting hurt in P.I. accidents for years, but can't get a lawyer to represent them. With bad faith, any lawyer can handle small P.I. cases through binding arbitration.
The referendum is scheduled for March 7, 2000. Millions of dollars will be spent by both sides. You can help by educating your colleagues and your patients. The chiropractic community can have a substantial impact on this election. Discuss this election with your colleagues. Organize chiropractic students. Send letters to your patients. Talk to them during visits and put a sign in your window. Patients will trust you more than an out-of-state insurance company.
The irony is this: If out-of-state insurance carriers can spend millions of dollars to defeat the proposition that insurance companies don't handle P.I. claims in an honest manner, who then will control insurance abuses? Californians will never get a chance like this again for P.I. reform. Let's seize the initiative and help protect our patients/clients.