Crime Insurance Plan Readied

LANSING - Crime insurance for Michigan residents currently unable to get it at a rea onable rate may be availabl(! by next week. On the basis of legislation passed earlier this year the board of governors of the Michigan basic property insurance pool and the state insurance bureau have been working out a high-risk crime policy that would become part of the same pool operatioñ. The pool was established in 1968 to make property insurance available for persons unable to get it at a reasonable ate in the normal insurance narket. Ronald Hempsted, an insurance bureau official, said details of the residential crime policy are expected to be finalized at a meeting Thursday of the pool's board of governors. And, he added, a crime coverage policy with options for commercial customers "will not be too f ar behind." Michigan was one of 11 states where the federal government determined private crime insurance coverage Wiisn't available at a reasonabl! rate. On the basis of legislation passed by the Congress last year, the Department of Housing and Urban Developm e n t (HUD) will opérate crime insurance programs in states that lack such insurance unless the state government provides its own insurance plan. 'Under tner Michigan plan for high -risk crime insurance, a person will be able to apply through a company or go directly to the pool administration. Unlike the present b a s i c property insurance coverage where each applicant is assigned to a particular insurance company that must then issue a property insurance policy, the crime coverage policy will be a single so-called "syndicate" policy issued by the pool itself. The use of a single pool policy may reduce the cost of operating the plan, and if it is successful in this area could be extended to fire insurance policies, Hempsted said. Rates for the state crime insurance policy, both resident i a 1 and commercial, will probably not be higher than the federal rate level, that is the so-called "affordable rate." And the coverage will be available to anyone who has difficulty getting such insurance. The state policy to protect against such crimes as burglary and robbery will include various requirements that the policy holder must comply with in order to have coverage. For example, a policy holder may be required to install certain types of locks, and the kinds of protective devices required may escálate in proportion to the magnitude of the risk involved. Exactly how many Michigan property owners will take advantage of this type of coverage is unknown. Plan Calis for Minimum Shilly-Shallymg, Jflaximum Justice for the Consumer (Continued from page 5) Each county in the state to establish a "County Arbitration Board" for the purposes of hearing and resolving auto accident claims between insurance companies. The establishment of maximum contingent fee schedules for attorneys involved in auto accident suits. In cases where an attorney's fees are contingent upon the amount of financial recovery won through litigation, his compensation would be limited to no more than 25 per cent of the amount of recovery. The McNeely proposal is thus no-fault in the sense that it provides for immediate payment of accident claims to all parties involved in an auto accident. But-as an important concession to the insurance industry-the reform proposal retains the concept of "driver accountability" by calling for mandatory after-payments arbitration between insurance companies to assign fault. "The assignment of guilt is a defensible precept," Rep. McNeely said, "and the guilty should not go unpunished." "What is indefensibie is making the innocent victim of an automobile mishap await restitution until guilt has been assigned. "My plan calis for a minimum of shilly-shaüying around, and a maximum of justice for the consumer," he saidWill it lower the cost of insurance to the consumer? In Massachusetts, where the nation's first no-fault plan became law several months ago, costs to the insurance companies have been reduced by one-third since lts inception. Thus far, none of the savings have been passed along to Massachusetts drivers. "I'm not sure the driver will see any savings in premium costs," Rep. McNeely admitted. "The objective is to institute a more equitable auto insurance program without unnecessary delays in claims settlement. "But even if premium costs stay the same," he said, "the consumer is going to get a better programj:or his I money." I Already similar to plans advanced by two national I insurance institutes, Rep. McNeely's proposal has won I general approval by the Michigan insurance agency. Not surprisingly, however, he has aroused the militant I opposition of the state's legal profession. In Detroit, Rep. McNeely's plan was labelled "a plan requiring higher premiums for fewer benefits" by the president of the Michigan Trial Lawyers Assn. "The motorist would be unable to take legal action against the wrongdoer and would be measured against a butcher shop-type chart that would place specific dollar values upon arms, legs, eyes and other portions of his body," Detroit attorney Irving Kroll had charged at the Association's annual meeting.' Rep. McNeely softly suggests that the trial lawyers have a "vested interest" at stake. "By de-emphasizing litigation as the primary means to recovery, my legislation will hit a lot of lawyers right in their fat pocketbooks," he observed. In many cases, he pointed out, a 25 per cent maximum fee in an accident-ree overy suit represents less than one-half an attorney's traditional fee in such litigation. "Sure, they're screaming," he chuckled. "They're screaming loud." Could such a powerful pressure group block passage of his proposal? "I am willing to concede that a number of amendments may be tacked onto my proposal on the floor," he said. "No one, however, is going to be able to stop passage of no-fault legislation. á "The concept is one whose time has come," he said. 1