Wilson Intensifies Push for No-Fault Insurance : Politics: Governor assails lawyers group as obstacle to cheaper auto rates. He vows to veto Speaker’s bill.

Gov. Pete Wilson on Monday upped the ante on legislation to enact low-cost, no-fault auto insurance, vowing to veto a rival bill by Assembly Speaker Willie Brown and repeatedly assailing the California Trial Lawyers Assn. for allegedly blocking insurance reform.

Wilson, in Los Angeles, said that heavy pressure will be placed on legislators who have sided with the trial lawyers against no-fault to instead support a $220-a-year basic no-fault auto insurance policy proposed for good drivers.

Enactment of the bill, by state Sen. Patrick Johnston (D-Stockton), will bring an end to a situation where “a low-income family is faced with that dismal choice, to forgo automobile ownership, which is not practical, or to circumvent the (state’s mandatory auto insurance) law,” Wilson said at a news conference.

The legislators, the governor said, “are going to have to cast a vote that indicates they are on the side of the trial lawyers or on the side of their constituents, and if I were given that choice I would want to, in conscience, represent my constituents.

“And if I were concerned about retaining my seat, I would also want to represent my constituents,” he added.

Wilson characterized Brown’s bill as an attempt to force middle-class Californians to subsidize low-income auto insurance buyers. He said that the bill would keep a legal system that allows the trial lawyers to continue to reap big profits, while Johnston’s bill would bring savings to nearly all good drivers with no subsidies.

The $220 basic premium under the Johnston bill would be good for one year. After that, it would be up to the insurance commissioner to set rates.

Under no-fault insurance, a driver’s damages are paid by his own insurer, regardless of who is blamed for the accident, and the right to sue is sharply restricted. The Johnston bill would replace the state-required liability insurance with no-fault insurance and set a flat rate for it throughout the state--in place of big neighborhood price differences that now exist.

Under Brown’s bill, the tort liability system apparently would be retained, although the measure contains many blank spaces that have to be filled in. Brown has not set a price for his low-cost insurance proposal, and has not said who would be eligible to buy it.

Wilson also suggested pointedly that Insurance Commissioner John Garamendi would be well advised to shift back to supporting no-fault insurance, which he did as a state senator.

“It’s an opportunity for him to look good, too,” the Republican governor said of the Democratic commissioner. “All that he has to do is to let Pat Johnston’s bill become law. . . . Then he simply benefits from the inference that during his term as commissioner rates went down. (The people will say), ‘By gosh, he must be all right.’ ”

Wilson first endorsed Johnston’s no-fault bill during a news conference last month. By holding a second news conference on the subject and targeting the influential trial lawyers, Wilson was showing his determination to make insurance reform a major goal of his new Administration. The outcome also is likely to be seen as a major test of his Administration’s effectiveness in dealing with powerful interests on a high-profile issue that has defied political solution. Dina Huniu, a spokeswoman for the Trial Lawyers Assn., took issue with Wilson’s stance.

“We think it’s unfortunate that the governor has taken such a bottom-line position on an issue on which he has been clearly misadvised,” she said. “In addition to increasing rates, the Johnston bill requires health insurance to subsidize the auto insurance system. By discounting the low-cost policy available in (the Brown bill) before thoroughly reviewing it, the governor is doing a major disservice to the consumers of this state.”

Brown, responding in Sacramento, said that although he was not surprised at Wilson’s threat to veto his bill, he believed the governor should have showed him the courtesy of briefing him on the alternate bill first. Wilson, he said, must be relying solely on opponents of his bill.

Garamendi, who has been working with Brown on the Speaker’s bill, said:

“The Legislature and governor must forge a compromise that actually delivers low-cost insurance. I am ready and willing to work with the governor and Sen. Johnston to achieve that goal. Certainly, one of the issues that must be dealt with is the cost of litigation. . . . Fortunately, the stage will soon be set for an epic compromise.”

Wilson did not appear to be in a compromising mood as he appeared with Johnston and representatives of a large group of minority and low-income consumer organizations that are supporting the no-fault bill.

“The time has long since come for low-cost automobile insurance,” the governor said. “It is long overdue. It is no secret why we have not been able to get it. It is because we have a system of tort liability in which the trial lawyers have persisted in making automobile insurance unaffordable.”

Wilson said that given a system in which minimum state-required liability insurance costs at least $900 in the Los Angeles area, “quite understandably” millions of drivers have chosen to go without it.

Reform, he said, has been prevented by the trial lawyers. “That is a powerful lobby,” Wilson said. “They are legitimately entitled to assert whatever it is they wish to assert. They are not entitled to continue to undermine the Legislature in achieving (the) goal of low-cost insurance.”

Although Johnston has said premiums would fall under his bill, some large insurers are so eager to back his no-fault plan that they have spent $300,000 lobbying it. Wilson said some insurers are supportive “because they’ve got a rotten image, and they’d like to improve it.”

The governor would not say whether he preferred that insurers not spend money lobbying legislators for the bill.

Huniu, the trial lawyers’ spokeswoman, said that Wilson is trying to make a scapegoat of the trial lawyers when the blame for high insurance costs rests with insurers, whose support of the Johnston bill makes it suspect.

Meanwhile, an official of Consumers Union, one of the backers of the Johnston bill, released estimates showing that even if policyholders decided to buy more insurance than required, as many would, the Johnston bill would lead to an overall decline in their premiums.

One comparison showed that premiums for a married Hollywood couple over 40, insured by State Farm, would decline from the current $1,622 a year to $883, if they added property damage coverage to the basic no-fault policy, and from $3,843 a year to $2,917, if they bought a full-coverage policy with high liability limits and low deductibles.

Johnston conceded after the news conference that some figures in his bill have yet to be filled in. While the $220 premium would be good for the first year for drivers entitled to a good-driver discount under Proposition 103, it would not apply to teen-age drivers. Johnston said he did not know what teen-agers would pay.