Automobile Accident Claims And Insurance Rates.

AUTOMOBILE ACCIDENT CLAIMS AND INSURANCE RATES. INITIATIVE STATUTE. Reduces bodily injury, uninsured motorist rates to 50 percent of October 31, 1988. or October 31, 1987, level, whichever is lower, adjusted for medical inflation. Limits motor vehicle accident recovery for noneconomic losses such as pain and suffering to 25 percent of economic losses, as defined. Prohibits attorney contingent fees greater than 25 percent of economic losses, as defined. Limitations not applicable to survival, wrongful death actions or actions involving serious and permanent injuries and/or disfigurement. Provisions expire December 31, 1992. Summary of Legislative Analyst\u27s estimate of net state and local government impact: Would increase state administrative costs by about $2 million in 1988-89, varying thereafter with workload, to be paid by additional fees on the insurance industry. State and affected local governments would have unknown savings from reduced insurance rates and loss limitations. Possible reduction in court costs and court revenues could result from limitation on claims for noneconomic damages. Would reduce state revenues from the gross premiums tax by about $50 million a year for next four years if no other changes are made in insurance rates