A Potential New Alliance for No-Fault Insurance : A Wilson / Garamendi coalition could create the clout for reform.

There is one good thing that can be said for the collapse of the Legislature’s most recent effort to clean up California’s auto insurance mess. By making a bad situation worse, it will get thousands of average motorists--and voters--madder than they already are. And that means the political momentum can be created for one last push for insurance reform--if need be through the admittedly imperfect initiative process.

GRIDLOCK CITY: Why the recent reform effort failed is less interesting than the way it did. Suffice it to say the political gridlock that has kept things from moving in Sacramento for years is still in effect. It’s a standoff between two rich lobbying groups--trial lawyers who like the current system because it makes them money and insurance companies that want change but insist it be on their terms. It’s so difficult for the Legislature to ignore such powerful special interests that the insurance reform effort died not with a bang but with a whimper. The issue literally petered out last week when a special committee that legislative leaders appointed to tackle the insurance mess simply announced it would not meet because its members couldn’t agree on solutions.

The accusatory finger-pointing began immediately. It was so self-serving that it does not merit the dignity of being repeated, except to refute one somewhat unfair charge. The trial lawyers contend that state Insurance Commissioner John Garamendi’s unexpected switch on no-fault auto insurance sabotaged the reform effort. Garamendi announced two weeks ago that he now supports no-fault insurance after campaigning for office saying that he did not consider it a viable solution. That brought him back to the stance in favor of no-fault he took as a state senator. Granted, one can be cynical about Garamendi’s change. It always helps to be a little dubious about shifts by politicians when they’re as ambitious as Garamendi. But, like many other Californians who pay too much for auto insurance, we prefer to see the good that could come from Garamendi’s switch.

By supporting no-fault insurance again, Garamendi, a powerful Democrat, has gone over to the same side as Republican Gov. Pete Wilson. Now there are plenty of reasons for Wilson and Garamendi to be wary of each other--not least of which is the real possibility they might run against one another for governor someday. But in the meantime, they can muster enough bipartisan political clout between them to get renewed momentum going in Sacramento for auto insurance reform. It’s worth a try. And if the Legislature won’t act--and unfortunately that’s a good possibility--Garamendi and Wilson can join to push an insurance reform initiative that goes further than Proposition 103.

You remember Proposition 103. Proponents billed it in 1988 as the “Proposition 13 of insurance reform”--a chance for angry voters to go around the politicians and set things right. But it has been only partly effective. That’s because 103 only set up a better structure for administering insurance in California, such as an elected insurance commissioner and tougher requirements for insurance companies that want to change their premium rates. What is needed now are better laws for that structure to administer.

NECESSARY REFORM: First and foremost is a no-fault insurance law. As the experience of New York and other states has shown, no-fault systems help reduce the number of costly lawsuits that drive up everyone’s premiums. And we don’t mean the no-fault system the insurance industry tried to foist on California voters in Proposition 104. That was a transparent effort to undercut the appeal of Proposition 103 and was clearly slanted in the industry’s favor. It is possible to design a no-fault system to operate under 103, and that must be done.

Equally important, in the short term, is a law that will provide a no-frills auto insurance policy for poor drivers at minimal cost, and require every driver in the state to buy at least such minimal coverage. That would prevent so many motorists from operating vehicles without insurance, which forces up everyone else’s uninsured-motorist premiums.

Also, other laws are needed to crack down on insurance fraud and to promote automotive safety. But there’s consensus on these other laws; there is none on no-fault and no-frills auto insurance, which is why they remain the core of the problem.

But with Wilson and Garamendi on the same side, it should be possible to work out a balanced no-fault insurance system and a viable no-frills auto policy. Proposed legislation can be sent to the Legislature--on a take-it-or-leave-it basis, if need be. Because if legislators lump it, that same package can then be offered to the voters as a ballot initiative. Given how angry we all are over the insurance mess--and how much angrier we’re sure to get before this is all over--we are confident that initiative would be approved.