A Bill Worth Junking

Territorial rating for the price of automobile insurance, a practice commonly known as redlining, creates undeniable hardships for drivers who live in neighborhoods that are considered high-risk areas. Wholesale reform is needed--not the piecemeal and flawed approach advocated in legislation sponsored by Assembly Speaker Willie Brown and due for Assembly action on Thursday.

AB 3885 would give uninsured drivers the chance to buy the liability coverage now required by state law at lower rates through the assigned-risk pool. Brown is acting on the right principle of trying to open access so that people can afford to fulfill their legal obligations. But the rates would be lower under his bill because the definition of liability for bodily injury would be far different from that under standard coverage. At present, policies contain a minimum liability of $15,000 per person and $30,000 per accident, covering medical and funeral costs, economic losses, and pain and suffering. AB 3885 would restrict coverage to medical and funeral expenses and lost wages. A person who didn’t hold a job--a retired person, a housewife, a child--and who died in an accident caused by a driver with this policy would get only funeral costs, no payment for the lost work of a mother, no compensation for the tragic death of a child.

It is true that the victims of uninsured motorists today receive nothing. But Brown’s bill isn’t the answer. It would create an economic incentive for people in redlined areas to buy this inadequate coverage and perpetuate the two-tier system of victims--one injured by a fully insured motorist, the other who has the misfortune to be injured by a driver who couldn’t afford full coverage.

It would be fairer to improve the affordability of car insurance through an overall reform of the rate-setting system. If the Assembly wants to take some action now, however, it could compromise by retaining the standard definition of bodily injury while cutting liability limits in half.

Brown’s bill is opposed by some of the very people whom it purports to help--the Los Angeles chapters of the Southern Christian Leadership Conference and the National Conference of Black Lawyers, as well as Citizens Against Discrimination in Auto Insurance. The Assembly should send this auto-insurance bill to the junkyard.