Insurance: Yes on 100

Making a wise choice among the five insurance initiatives on the November ballot isn’t easy. The language of the propositions is practically incomprehensible. The claims and counterclaims made about each measure are mostly sham, because no one knows which can survive the inevitable legal challenges; the premium rollbacks some promise may never materialize. And the advertising blitz that has made the “insurance wars” the most expensive campaign in California’s history has done more to confuse than to enlighten voters.

Amid all the confusion, what is certain is that none of these initiatives is ideal. If California drivers are ever to be spared the endless rate hikes that have pushed premiums up 40% in the last 30 months, profound changes are needed, both in the way accidents are compensated and in the way the insurance industry is regulated. Insurers’ costs must be reduced, through the adoption of no-fault insurance, a fast-track arbitration system or some other device that will pay claims speedily and unclog the courts; the high cost of litigation is a major factor in the high cost of insurance. And, to ensure that cost savings are passed on to consumers, the insurance industry must accept effective rate regulation; the insurers insist that they’re losing money on auto insurance, so let’s have them open their books and prove it.

Those states that have managed to combine these elements in one package have been able tostabilize insurance rates; in New York, where a generous no-fault system co-exists with toughregulation, rate increases average only 4% a year. California has not achieved that sort of balanced system because of a lack of leadership in Sacramento. The Legislature is so controlled by special interests, its members so indebted to trial lawyers or insurance companies, that it has abdicated any responsibility for insurance reform law, as has Gov. George Deukmejian. With political leaders unwilling to make the necessary compromises, the issue has been left to the special interests. And what they have produced are five openly partisan initiatives that would put the burden of reforming auto insurance on either lawyers or insurers rather than on both, where it belongs.

Tempting as it might be to vote no on all five, doing so would simply preserve the status quo; it would provide no relief to those drivers who are paying as much for auto insurance as they paid for a compact car a decade ago, and it would let the Legislature off the hook. Voting yes on all five, as some drivers desperate for reform have suggested, would be even worse, creating a legal snarl that might take the courts years to untangle. In truth, if there is to be any victor in the “insurance wars,” the voters must choose carefully among imperfect choices; they must settle on one initiative that will at the very least move California closer to real reform and spur the Legislature to finish the job.