Nader Draws Criticism by Consumers for No-Fault View

For the first time since he intervened in California’s “war of initiatives” over auto insurance last year, consumer advocate Ralph Nader is having his views questioned by some of the consumer, minority and low-income groups that are most committed to lowering insurance prices.

At an unannounced meeting with Nader in Sacramento last Monday, representatives of a coalition of these groups who are backing a proposal for a no-frills, no-fault auto insurance policy to be sold across the state for $160 to $200 challenged his opposition to no-fault insurance.

People who described the meeting said it was a polite but spirited exchange during which Nader and Harvey Rosenfield, chairman of the Proposition 103 campaign, were criticized for aligning themselves with the California Trial Lawyers Assn. Nader reportedly suggested that the minority and low-income groups were being used by the insurance industry.

Those present at the meeting from the minority and consumer side--including Mario Obledo, national chairman of the Rainbow Coalition, John Gamboa, executive director of the Latino Issues Forum, George Dean, president of the California Council of Urban Leagues, and Harry Snyder, West Coast director of the Consumer Union--declared that they saw no way of making auto insurance affordable to the poor without a no-fault system.

Nader responded that by giving up rights to file lawsuits and seek pain and suffering compensation, people insured under the no-fault proposal would become victims of a “two-class auto insurance system” under which rich policyholders would have more ability to recover damages from accidents than the poor.

“Why should we give up pain and suffering awards?” Nader asked in a subsequent interview. “The trouble with the minority groups is that they didn’t ask the insurers for enough before they supported their plan. They really accepted crumbs. They accepted the principle that if they were poor, they’d have to get compensated for just medical benefits and wage losses, not pain and suffering or even property damage.”

Dean of the Urban League told The Times Friday: “It’s not that we’re giving up anything. We estimate there are 5 million drivers who can’t afford and don’t have insurance now. How are they giving up something, if they don’t have anything now?”

But Nader commented that Dean and the other minority and consumer group leaders are trying to “impose a (system) which is very advantageous for the insurance companies and very anemic for the consumer.”

He questioned whether the $160 to $200 policy price would stand up for very long, and he added that he does not think there are 5 million uninsured drivers in the state. It’s probably closer to 3 million, he said.

Since the meeting, Nader and Rosenfield have said they will soon come up with their own plan for providing lower-cost auto insurance coverage than the one by Assembly Speaker Willie Brown (D-San Francisco) that they endorsed last week, but still keeping the present litigation system that the trial lawyers like.

In the wake of the meeting, a number of the minority and consumer representatives made it plain that they still respect Nader and hope to work with him in the future on other issues, but they did not downplay their differences with him on the merits of no-fault insurance.

“I remember saying to Ralph myself that I know he has been a hero for the consumer in many instances, but I think he is wrong on this particular issue,” said Dean.

“We’re trying to come up with something affordable that will allow the people who are our constituency--the low-income people in this state--to drive legally and not break the state’s mandatory insurance law. That’s our bottom line.”

Obledo said he had told Nader that 5 or 6 million Californians cannot afford auto insurance. “Some of his points against no-fault are meritorious,” he said of Nader, “but we’re in a situation here that we had to come up with a plan that provides insurance for the lowest cost.”

Edith Adame, counsel to the Latino Issues Forum, said: “To the extent that we recognized Nader has always served consumer needs, he was honored at the meeting. But we were concerned about his being isolated from the interests of California consumers by his principled stand against no-fault.

“We understand he’s a man of principle, but in this case about 6 million people are going to be sacrificed for the principle. If he were in our boat, he would probably do the same thing we’re doing (proposing a no-frills policy).”

The Consumer Union’s Snyder said he felt the meeting had succeeded in making Nader and Rosenfield “realize that if they are going to kill a low-income solution, they have to come up with one that’s at least as good.” So far, he said, “Nader’s theology makes each accident a meal ticket for the trial lawyer.”

Rosenfield, however, said he felt it was “tragic that the needs of low-income consumers have become a political football. We are in opposition to proposals which would deny the poor their legal rights and dehumanize them.”