Like health insurance, auto insurance is fast becoming a political issue that is attracting big money and political action committees. Auto insurers are increasingly spending big money to ensure favorable treatment from politicians and the courts. The latest and most disturbing example of this is occurring in Florida. The Miami Herald reported that a company called United Auto Insurance has spent $227,000 to create something called the Citizens for Judicial Fairness. The Citizens is actually a political action committee designed to help two judges who regularly rule in favor of insurance companies stay on the bench in an Aug. 26 election.
United Auto’s action was designed in response to the political efforts of local personal injury attorneys who were spending money to get Miami-Dade County Court judges Nuria Saenz and Rodney Smith off the bench. Smith and Saenz regularly rule in favor of insurance companies. Attorneys vs. Insurance Companies The candidates running against Saenz and Smith are personal injury attorneys themselves. Get the picture? The lawyers want their people on the bench so they’ll rule in favor of plaintiffs at the expense of insurers and policyholders. The attorneys have created their own political action committee called Citizens for Judicial Excellence. Judicial Excellence means judges who are more likely to rule their way. That committee has spent about $47,000 on the race, according to the Herald. Interestingly enough, Judge Smith, whom the committee would like to throw off the bench, is considered an excellent jurist who has broad support from Miami’s legal establishment. Smith regularly gets high marks from other lawyers, but when he was in private practice, Smith worked for United Insurance Company. Smith doesn’t regularly preside over accident cases, but he occasionally hears appeals in such cases. Insurers and personal injury attorneys are spending big money on these elections because injury claims from accidents are auto insurance companies’ biggest expense. Such claims are higher in states like Florida and Louisiana, where personal injury attorneys have a great deal of influence over the court system. Interestingly enough, United Auto Insurance is probably working for average citizens’ benefit in the election. If it can keep claims low, the company can offer lower premiums to drivers. There is, of course, another solution to this problem that politicians don’t like to talk about. If lower-income drivers had some other means of paying their medical bills, such as health insurance, they would be far less likely to sue. Expect to see such spending by insurance companies repeated on the federal level. Now that the U.S. Treasury Department’s Federal Insurance Office is investigating the auto insurance industry, I imagine insurers will be spending money on Congressional races to keep Uncle Sam off their backs. The entry of major retailers, such as Walmart, into the auto insurance industry will also spur more political interest. Insurers or insurance agents might start lobbying Congress and state legislatures to bar discounters from auto insurance in order to keep rates up. No matter how you look at it, car insurance is now a major political issue. Hopefully the politicians won’t foul up auto insurance the way they have messed up health insurance with Obamacare.