Brown Wins Test on Auto Insurance

In a showdown between Assembly Speaker Willie Brown (D-San Francisco) and one of his lieutenants, the Assembly Ways and Means Committee late Wednesday approved legislation authored by Brown to require that low-cost auto insurance policies be provided for California’s poorest residents.

At the same time, the committee shelved a rival measure by Assemblyman Patrick Johnston (D-Stockton), chairman of the Finance and Insurance Committee, that would have transformed the state’s auto insurance statutes into a “no-fault” system partly patterned after the one now used in of New York state.

The committee’s action came after Brown agreed in concept to meld part of Johnston’s bill into his own, but left for later the details of just how that would be done.

The result of Brown’s last-minute changes, if they became law, would be a unique hybrid system under which some drivers would be immune from liability for their accidents while others could be sued for injuries and damages they inflict on other motorists.

Brown described the complex system as a combination of the more desirable elements of each of the competing bills, both of which were thought to have sufficient votes to be approved by the committee until Brown began a vigorous lobbying effort Wednesday afternoon.

The ‘Best’ of Both

“I am willing to take the best of all possible worlds,” the Speaker said of his measure as he agreed to change it.

But opponents criticized the hasty amendments. They contended that it was improper or unwise to move forward with Brown’s measure without knowing more about what it would do. The bill, approved on a vote of 13 to 6, is expected to be heard on the Assembly floor today or Friday.

“What has occurred here is politics in its ugliest form,” said Judith Bell, a lobbyist for Consumers Union, the sponsor of Johnston’s bill. “It’s a bill that if you asked every member of the committee what it did you would get a different version from each.”

Added Johnston: “There is a lot of stuff in the Speaker’s bill. Some day, someone has to organize it. I don’t know how you can graft the provisions of my bill onto his bill and have an intelligible auto insurance system.”

The original version of Brown’s bill would tighten auto safety rules, strengthen enforcement of mandatory insurance laws and create a partial “no-fault” system under which damages caused to motor vehicles would be paid for by the driver’s own insurance company without regard to who caused the accident.

These changes in law were designed to save the insurance companies enough money to help them subsidize $220-a-year “lifeline” policies for low-income good drivers and offer an expected across-the-board rate cut for most other motorists.

Added to those provisions Wednesday was a concept from Johnston’s bill that would create a $180-a-year “no-fault” policy to cover $15,000 in medical costs and lost wages caused by an accident. Under Johnston’s proposal, all injured drivers would be compensated by their own insurance companies and could not sue for non-economic losses such as “pain and suffering” unless their injuries were deemed “permanent or serious.”

But Brown made Johnston’s provisions optional for motorists under his bill, and he did not spell out exactly how the combination system would work. He could not say, for example, how a driver who had no insurance could collect compensation from a motorist who was covered by a “no-fault” policy and therefore could not be sued.

Brown also declined Wednesday night to provide a definition of “permanent or serious” injuries, which would be the key to determining when a motorist who suffered disfiguring injuries could sue the other driver for losses from “pain and suffering.”