I am a member of AAA, a member disappointed to see this recent e-mail in my inbox:


Re: Stop Increased Insurance Rates! Tell senate to VOTE NO!

The Pennsylvania Senate is considering legislation (HB 2246) to allow trial lawyers in court cases involving auto accidents to suggest to juries arbitrary dollar amounts for “non-economic” damages.

If passed, this bill will increase the cost of auto insurance for all Pennsylvanians because it will result in higher jury awards in auto cases.

AAA Mid-Atlantic works hard to advocate for the best interests of the driving public. While we fully support fair protections and compensation for drivers hurt in accidents, we want our members and all motorists to be able to buy insurance at the lowest rates possible. That’s why we oppose HB 2246.

(Bolding in original.) Let’s make one thing clear: although AAA sells car insurance in Pennsylvania through a separate company (“AAA Mid-Atlantic Insurance Company”), I have never bought that insurance. This e-mail came from the main AAA for my area (“AAA Mid-Atlantic, Inc.”), the one that claims to “work hard to advocate for the best interests of the driving public.”

Which raises two problems.

First, assuming they are correct that the change would lead to higher settlements and verdicts, enough to alter the overall insurance risk and thereby necessitating an increase in premiums, why is AAA taking a position that favors insurance companies over the victims of automobile accidents? Why are they taking the position less likely to discourage unsafe driving, the position that discourages insurance companies from adopting policies that make their policyholders drive more safely?

Did they even consider that? Or did they just jump to the insurance company talking points?

Second, what makes AAA believe that this change will actually lead to higher car insurance rates? As a trial lawyer, I am unaware of any survey of lawyers, much less actual scientific research, indicating that verdicts are generally higher when jurisdictions permit lawyers to state specific numbers for non-economic damages in their closing arguments. More than a few trial lawyers have given specific numbers at closing, only to have the jury tell them afterwards that “we would have given you more, but you asked for less.” More than a few trial lawyers have given juries numbers that repelled and offended them, torpedoing a potentially higher verdict.

Odds are, the provision won’t have any effect even when it’s used by trial lawyers: juries make up their own minds about liability and damages — just as we ask them to — and they frequently ignore the numbers given by the lawyers.

Moreover, from an overall insurance perspective, even if we assume giving juries award higher verdicts when given specific numbers for non-economic damages, such would only matter in a tiny fraction of the car accident cases out there. In the vast majority of automobile accident cases, the non-economic damages are minimal: the dispute is really one insurance company trying to recover economic damages — often just the cost of repairs — from another insurance company by way of subrogation. The cases rarely make it to a jury, much less a jury that cares about what number some lawyer puts on mental anguish, loss of life’s pleasures, and other non-economic damages.

Consider me unimpressed, AAA Mid-Atlantic. Leave the insurance lobbying to the insurance companies.

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