Breaking the Gridlock on Insurance : Senate Bill 941 provides a good way to reduce car insurance rates equitably

The cost of automobile insurance in California spawned Proposition 103 back in 1988, yet it remains high nearly three years later. That’s because the initiative was just a beginning on insurance reform, and the Legislature must fill in some gaps.

A good place to start is by enacting Senate Bill 941, by Sen. Patrick Johnston (D-Stockton), who has been admirably persistent these last few years in trying to get some kind of insurance relief package through Sacramento’s political gridlock.

SB 941 would require that every driver in California buy a basic auto policy for just $220. The policy would provide up to $15,000 of coverage for every person injured in an auto accident, to be paid by the policyholders’ insurance company within 30 days, regardless of who was at fault. Only those persons who could prove greater losses could sue for more. Any driver who wanted higher coverage would be free to purchase it.

Johnston argues--and the many consumer groups, minority activists and insurance executives who support his bill agree--that such a no-frills, no-fault insurance system would eliminate two major factors in the skyrocketing cost of auto insurance. It would cut down on litigation filed over minor auto accidents. It would also get the estimated 25% of California drivers who are currently without insurance--adding to the cost of uninsured-motorist coverage the other 75% must pay for--to buy some. No driver could renew a license without proof of coverage.

Johnston came close to getting a similar bill passed last year, but didn’t get enough support from former Gov. George Deukmejian to overcome the cynical machinations of Assembly Speaker Willie Brown, who hijacked Johnston’s proposal at the behest of the powerful trial lawyers’ lobby. (Many lawyers, not surprisingly, like the current insurance system, which they find good for business.) This time Gov. Pete Wilson has weighed in with his support early. But everyone who wants to see the insurance mess cleaned up is going to have weigh in early, and often. The trial lawyers and their allies, like Brown, are skilled at ambushing legislation.

SB 941’s first big test will come in the Senate Judiciary Committee in a few days. The highest auto insurance rates are right here in urban Southern California, and there are plenty of local lawmakers on the committee to push it past this first hurdle. Among them are Democrats David Roberti, Art Torres and Diane Watson, all of Los Angeles, and Robert Presley of Riverside. The two Republicans are Ed Davis of Santa Clarita and Edward Royce of Anaheim. They should back SB 941 all the way--or be ready to explain why not to their constituents who drive, and who pay through the nose for auto insurance.