Implementing Car Insurance Reforms

In response to Michael McCabe, vice president for Allstate Insurance (“Allstate Lawyer Disparages ‘Socially Fair’ Premiums,” Part I, June 23), if he is against “socially fair prices (as being) antithetical to the American way of life and the free enterprise system,” what is he for? Socially unfair prices? Business as usual?

In 1986, my wife was insured by Mercury, and I by Farmers. When she reported that I would occasionally be driving her car, Mercury threatened to cancel my wife’s insurance if I did not insure with them as well. No explanation. To me, that is coercive, an abuse of my freedom to contract with whom I choose, and an example of why the voters of California are upset. The insurance industry is an unregulated economic force with too much power.

McCabe said, “If you force me to write business at a guaranteed loss, the incentive that affects my behavior is to treat those customers as badly as the law allows. It’s an incentive to drive them away.” A couple of points: 1) The proposition does not force “a guaranteed loss.” It does require that insurance rates be more fairly determined. 2) McCabe doesn’t need to drive anyone away. We’re already going. We don’t like the way insurance companies behave now. That’s why we passed the proposition. If he doesn’t like it, he can stay in Illinois. Plenty of California companies will be able to operate profitably under the new law.

Finally, his statement that “Whatever went through the voters’ mind (sic) is irrelevant,” is so pompous, condescending, callous, anti-democratic, and mean-spirited as to need no commentary. It may become a minor classic, not quite in the same league as “Let them eat cake,” but certainly comparable to William H. Vanderbilt’s “The public be damned.”

CHARLES LAYNE

Los Angeles