Car Insurance Initiatives on the November Ballot

O’Connell’s column was deceptive in its simplicity. In the context of the insurance initiative battle, O’Connell’s analysis does an injustice to voters.

Californians do not have the option to vote for the ideal no-fault system outlined by O’Connell. Proposition 104 comes with additional baggage. One-third of Proposition 104 creates a no-fault system with inadequate benefits for consumers. The remaining two-thirds of the initiative prohibits rate regulation in California, and re-enacts and expands the insurance industry’s exemption from antitrust laws.

O’Connell claims Proposition 104 is modeled after New York. The benefits in New York are far more generous. New York gives the consumer access to $50,000 basic loss benefits. Unrestricted as to use, these benefits can compensate the injured for medical costs or wage loss. Proposition 104 caps benefits at $25,000, and only $10,000 is available for medical costs.

New York has an effective Department of Insurance that subjects rate increases to the prior approval of the insurance commissioner. Proposition 104 prohibits prior approval.

New York has a compassionate tort threshold that allows seriously injured persons to sue for pain and suffering. Proposition 104 requires an injury to be both serious and permanent before pain and suffering can be recovered. Under Proposition 104’s definition of “permanent” if an individual has hope for recovery at some indefinite future time, no recovery for pain and suffering will be allowed.

Finally, in New York physicians treating auto accident victims must adhere to a fee schedule. Proposition 104 is silent on this subject.

Consumers Union continues to support the concept of no-fault auto insurance, but opposes Proposition 104.

NETTIE HOGE

Staff Attorney, West Coast Regional Office

Consumers Union of U.S.

San Francisco