Authority to Demand Insurance Proof Ends : Law: Police had been authorized to seek auto policies when stopping a driver for a traffic violation. Experiment has fueled debate over lack of affordable no-frills plans.

A key provision of California’s mandatory auto insurance law--under which the state has suspended the licenses of more than 2 million drivers--will lapse on New Year’s Day.

Beginning Tuesday, California police and the Highway Patrol no longer will be authorized to demand proof of insurance when they stop a driver for a traffic violation.

The Robbins-McAlister Act, under which the law enforcement officers have been acting, has not been extended by the Legislature.

California drivers still must have auto insurance, but they will be required to show proof of it only when they report an accident to the state Department of Motor Vehicles. Such reports are required whenever damage exceeds $500.

Failure to produce proof of insurance after an accident still will result in a suspended license.

Because only about one-fourth as many drivers have an accident in a given year as are cited for a traffic violation, the number of suspensions will be far lower, and there are fears that many motorists now carrying insurance will abandon it.

Records obtained by The Times from the Department of Motor Vehicles representing 1% of the state’s licensed drivers between 1981 and 1987, indicate that in the average year only about one in 20 drivers had an accident, and one in five was convicted of a driving violation.

However, suspensions imposed after failure to show proof of insurance after an accident usually have been longer than those from a traffic violation. The latter suspensions could be lifted when insurance was purchased; the former lasts at least a year.

The lapse in enforcement brings at least a temporary end to a three-year experiment that was supposed to reduce the number of uninsured motorists. Instead, it led mainly to a political furor over the Legislature’s failure to provide for an affordable no-frills auto policy.

For two years, the state Supreme Court stayed imposition of the 1985 Robbins-McAlister Act while it considered a lawsuit brought by representatives of low-income groups. The groups argued that the Legislature could not require insurance unless it also provided the affordable policy.

The high court finally rejected the lawsuit and enforcement began in late 1987. But surveys indicated that the number of uninsured motorists went up, rather than down.

“This enforcement provision really didn’t have any beneficial impact in terms of lessening the number of uninsured motorists,” said Bill Gengler, a spokesman for the Department of Motor Vehicles.

In fact, before the new enforcement, the DMV had estimated the number of uninsured at about 15% of the state’s licensed drivers. Toward the end, it estimated this figure at 25%.

Finally, at the end of the most recent legislative session, state Sen. Alan Robbins (D-Tarzana), one of the sponsors of the enforcement act, decided to let it die under a pre-existing clause. Robbins said he believed it was unfair to let enforcement continue, while insurance rates soared.

The newly elected state insurance commissioner, Democrat John Garamendi, has indicated he may push for tough enforcement of the mandatory law, but only if the Legislature will adopt a low-cost policy option at the same time.

Robbins, chairman of the Senate’s Insurance Committee, said he would immediately author a six-month emergency revival of police enforcement of the mandatory law if Gov.-elect Pete Wilson proposes a plan for a low-cost policy to the Legislature. He urged Wilson to do that within his first month in office.

Proposals for no-frills policies in the last few years, however, have usually fallen victim to opposition from the politically influential California Trial Lawyers Assn., which opposes moves to limit pain and suffering damages or the litigation of claims. Without the savings those limitations could produce, it has proven difficult to find a viable no-frills option.

“Basically, the extension of the mandatory enforcement provision is the lever that’s needed to keep the pressure on the various special interests to support a plan for lower insurance costs for everyone,” Robbins said.

Tom Conneely, president of the Assn. of California Insurance Companies, the state’s largest insurance lobby, said that now “nobody knows for sure” what will follow the lapse of the enforcement law.

“I think you can say safely that if there are now people who are insuring themselves solely out of fear that they will get a ticket and have their license suspended if they are stopped, you will see the number of uninsured people go up,” he said. “That could entail a rise of uninsured motorist premiums for those still insured, and they might become angry.”

Jerry O’Kane, executive director of the Independent Insurance Agents and Brokers of California, the state’s largest agents’ association, said he believes the Legislature will act quickly to reimpose stringent enforcement of the mandatory law.

“In our polling, we find nine out of 10 people are in favor of the principle of mandatory insurance,” he said.

Lois Salisbury, a lawyer for Public Advocates Inc., who represented the low-income groups that challenged the Robbins-McAlister Act in the first place, said she also believes “there will be renewed pressure” on the Legislature to revive tough enforcement.

But low-cost insurance must come first. “It is unfair to expect people to stop feeding their families or paying rent just to pay for auto insurance,” she said.

While police have been demanding proof of insurance, license suspensions have increased. There were 357,892 such suspensions in fiscal 1987-88, 911,028 in fiscal 1988-89 and 924,750 in 1989-90.