Contact:	Bob Redding (202) 543-1440
For Release:	Immediate News Bulletin 99.29 June 14, 1999

Auto Choice Is Up for Third Time

Washington, D.C., June 14, 1999 -- For the third time in as many years, the United States Senate Commerce Committee heard testimony on U.S. Sen. Mitch McConnell's, R-Ky., Auto Choice legislation, S. 837.

Commerce Committee members heard testimony from Members of Congress, state legislators, consumer advocates, legal experts, and others. Advocates for the bill argue that it would produce a tremendous savings for consumers on automobile insurance. McConnell stated that this would be a $193 billion tax cut over five years with no cost to the federal government.

The RAND Institute conducted a study demonstrating that S. 837 would save consumers $35 billion per year. This is $50 million more than the five-year tax cut savings projected for the budget resolution passed earlier this year.

The bill would allow consumers to opt out of specific liability opportunities when purchasing automobile insurance. This "choice," in theory, would produce a savings for consumers. It is supported by some insurance companies and opposed by others.

McConnell said, "if a driver wants to have the chance to recover pain and suffering, he stays in the current system. If he wants to opt-out of the pain and suffering regime and receive lower premiums with prompt, guaranteed compensation for economic losses, then he chooses the personal injury protection system."

McConnell continued, "Under both insurance systems -- tort maintenance and personal protection -- the injured party whose economic losses exceed his own coverage will have the chance to sue the other driver for excess economic losses."

Several years ago, the Governor of New Jersey testified before a joint House and Senate Committee on automobile insurance reform. New Jersey went on to pass legislation reforming their insurance laws. Unfortunately, advocates for the New Jersey legislation tied a reduction in premiums to more insurer control for collision repairers. Bob Redding, the Automotive Service Association's (ASA) Washington, D.C., Representative, commented, "ASA hopes the Senate will be cautious as it addresses auto insurance reform. The New Jersey legislation went too far and was bad for consumers and small businesspersons. The New Jersey bill limits the potential of free commerce. Collision repairers recognize the need for reform of our tort system. But it is imperative that this reform not reach into the pockets of small businesspersons and limit the choices for consumers. As it is currently drafted, S. 837 does not do this."

The Automotive Service Association is the largest not-for-profit trade association of its kind, serving more than 13,000 businesses and approximately 70,000 professionals from all segments of the automotive service industry. ASA is headquartered in Bedford, Texas.

ASA advances professionalism and excellence in the automotive repair industry through education, representation and member services. Additional information about ASA, including past news releases, is available on the ASA Web Site on the Internet (http://www.asashop.org).