Justices Hear Arguments on Challenge to State’s Car Insurance Law

The state Supreme Court heard oral arguments for an hour Monday on a lawsuit challenging California’s new mandatory auto insurance law, with attorneys for minority-group plaintiffs contending that if the Legislature is going to require drivers to carry insurance it must also see to it that it is actually available.

The high court suspended the law last December, pending adjudication of the case. No opinion from the court is expected for several months. In the meantime, the law--under which all drivers stopped for traffic violations had to show they were insured--will apparently remain suspended.

An earlier law under which drivers must demonstrate that they have insurance when they file reports of accidents with the state Department of Motor Vehicles remains in force.

Somewhat Skeptical

Five of the seven justices--Chief Justice Rose Elizabeth Bird and Justices Malcolm M. Lucas, Stanley Mosk, Edward A. Panelli and Joseph R. Grodin--seemed by their questions Monday to be somewhat skeptical of the plaintiffs’ arguments.

But Mosk suggested that perhaps the high court at least should refer the matter back to a lower court for a trial to determine the facts of auto insurance availability. He said it “might be very useful” for such a proceeding to force the insurance companies to “open their books.”

Attorney Angela G. Blackwell, representing the plaintiffs, told the justices that her clients think the present law lacks due process in that the state has done nothing to make sure that the private insurance companies actually offer insurance to buyers, particularly in minority areas. In papers filed with the court, the plaintiffs contended that many companies simply refuse to sell insurance in minority areas.

Under questioning by Bird, Blackwell said the lawsuit does not claim that the state has any obligation to make insurance affordable, beyond making sure that the prices are not unduly excessive or unfairly discriminatory.

‘Unusual’ Procedure

When Bird asked whether Blackwell conceded that even if the process she wants were adopted, some drivers would still find insurance unaffordable, Blackwell said she did.

Bird told Blackwell she was “not sure what you want us to do,” and she said at another point that it would be “an unusual judicial procedure” for the court to step in and prohibit enforcement of the statute until the Legislature takes some particular action.

Representing the defendant, the State of California, Deputy Atty. Gen. Christopher Foley said that in setting up an assigned-risk plan for auto insurance, the state has already done what the plaintiffs are asking it to do. He said that 35% of drivers enrolled in the assigned-risk plan have clean driving records and simply went to assigned risk because they could not obtain insurance elsewhere.

Alan Ides, representing the Automobile Club of Southern California, an insurer that filed a brief against the suit, pointed out to the court that under the present arrangement, assigned-risk rates in the black neighborhoods of South Los Angeles are actually less than regular insurance rates, not higher, as assigned-risk rates usually are.

Ides said that for $481 a year, a South Los Angeles resident with a clean driving record can obtain the minimum insurance required by state law.

(The state minimum is liability insurance of $15,000 for a single party, $30,000 for multiple parties and $5,000 property damage. Required coverage does not include collision or comprehensive insurance on one’s own car, nor any uninsured or under-insured motorist coverage.)

Foley, in his argument, said: “Unquestionably, there is a proportion of the population who cannot afford insurance and unquestionably is not able to comply with the (mandatory insurance) law.”