What You Need To Know About Tort Reform And Auto Insurance

September 29, 2017 by admin Auto Accidents 

What You Need To Know About Tort Reform And Auto Insurance

Auto accident attorney Niles
How Tort Reform Affects Auto Insurance Rates

If you are looking for an auto accident attorney in Niles, call our office at 847-305-4105 for a free, no-obligation consultation. We would like to speak with you about efforts by the insurance industry to limit the amount of money you can recover if you are injured in an accident.

The Truth About Tort Reform

Tort reform is an effort by those in “big business” to put caps on, or otherwise limit the amount of money the victim of an accident or other negligent act can recover. This is an issue argued (normally) by large insurance companies like Allstate or State Farm Insurance and advanced through state and federal legislation by members of Congress.

This article is not intended to be political however. There are countless Republican trial attorneys who are just as concerned about caps on recoveries as are their Democratic counterparts.  I’m writing this article as a car accident laywer in Niles, not as a social theorist. But it just takes common sense and a quick review of how all aspects of business work to see what’s going on.

The real actors are in board rooms and corporate offices. People focused on the bottom line. Peanut counters. This is not a new concept. It’s simply business as usual. Corporations trying to maximize their profit and reduce their expenses. As I discuss in the blog post I wrote a while back, if an insurance company saves $1,000.00 a claim multiplied by 1,000,000 claims a year, they can save a ton of money.

Unfortunately, the people who suffer because of tort reform are innocent people who have been injured through someone else’s negligence. Let’s take medical malpractice for example. A report that came out in 2016, estimates that medical negligence could be the third leading cause of death in the United States killing over 250,000 people per year.

Think about that for a second. More people may die from medical malpractice than from auto accidents, stroke or diabetes. As such, providing insurance to doctors and nurses is expensive. Consequently, malpractice insurance rates go up.

What is the alternative? The U.S. House of Representatives recently passed a law that capped all non-economic damages against health care providers at $250,000.00. What does that mean? If your mother goes in for surgery and the doctor makes an error and she dies, your entire family can only recover a maximum of $250,000.00 for her loss (excluding recovery for economic damages like her salary or medical bills). I understand the desire to reduce costs but this is not the answer.

Forms of Tort Reform

Caps on recoveries is not the only form of tort reform. The insurance industry is more creative than that. There are many ways to “skin a cat.” For example, some state negligence laws state that if the victim of an accident is even one percent (1%) at fault for the accident, they cannot recover for any of their injuries. These states, including North Carolina, Maryland and Virginia, follow the theory of “contributory negligence.”

Fortunately, Illinois follows the concept of “comparative negligence” which means that victims of other people’s negligence in Illinois can recover as long as they are not more than 50 percent responsible for the accident.

Some states like Oregon and California have passed laws such as Prop 213 which was enacted into state law in California Civil Code Section 333.4. Over 75% of California voters voted for Prop 213 which states that if you don’t have auto or motorcycle insurance when you get in an accident, you cannot recover for your non-economic damages, aka, your pain and suffering.

Finally, some states like California have discarded the “collateral source rule.” This rule generally prevents a defense attorney from admitting into evidence the fact that a plaintiff’s medical bills were paid by a health insurance company. Why is this important? Health insurance companies have contracted rates with many medical providers. As such, though you were billed $100,000.00 for example, chances are Blue Cross Blue Shield or Aetna only paid $50,000.00.

Why is this important? If a plaintiff can introduce the entire bill, then obviously they will recover significantly more at trial. Fortunately, Illinois follows the collateral source rule and as such, the victim of another’s negligence can enter the entire medical bill into evidence.

Do We Really Need Tort Reform?

The truth is, the number of lawsuits being filed in the State of Illinois and across the nation is actually GOING DOWN. Per the Illinois Courts website, in each of the past five years, the number of civil cases have dropped by twenty percent. Below are the number of civil suits filed in Illinois:

  • 2011: 555,088 civil cases filed
  • 2012: 554,747
  • 2013: 513,928
  • 2014: 457,444
  • 2015: 436,175

So, what is the truth? The truth is, if insurance companies offered victims of auto and other personal injury settlements even just a little more money, chances are even fewer lawsuits would be filed.

If you were injured in an accident on Milwaukee Avenue, Dempster, Greenwood or Golf, feel free to call an auto accident attorney for a free consultation at 847-305-4105.


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