The net fiscal impact of the initiative is uncertain, according to the state legislative analyst. The state could save money in reduced insurance and motor vehicle costs, but it could lose tax revenue if premiums go down. Supporters say those in serious accidents collect, on average, only 9 percent of their losses, with the rest going to lawyers. By taking attorneys out of the equation, supporters maintain, no-fault will dramatically reduce auto insurance premiums and guarantee customers prompt payment of claims. Uninsured motorists will no longer be a concern, since all motorists will be required to carry insurance, and children and pedestrians will be fully covered.
Backers say a similar no-fault law in Michigan has resulted in dramatic reductions in premiums.
They maintain it is the insurance companies, rather than attorneys, who are artificially padding costs to jack up premiums. By eliminating the ability to define who's at fault in an accident, opponents argue, the initiative forces good drivers to subsidize bad drivers. They say the initiative contains no guarantee that rates will go down, and allows insurers to determine which medical procedures they'll pay for and which they won't. Consumer's Union, which has supported no-fault proposals in the Legislature, says this measure tilts the balance too heavily in favor of the insurance industry.