Wilson Will Back No-Fault Initiative : Insurance: Governor is working on measure identical to Senate bill that failed last month. Supporters and opponents are already lining up.
Gov. Pete Wilson will support a 1992 no-fault auto insurance initiative if the Legislature fails to pass a bill for a no-frills, no-fault policy costing $220 a year for good drivers, aides said Wednesday.
“It doesn’t appear that any serious (auto insurance) reform can pass through the Legislature,” said Wilson press secretary Bill Livingstone. “So, there’s really no alternative to once again considering an initiative.”
Livingstone and other aides said the governor has assigned George Gorton, a top strategist of his 1990 gubernatorial campaign, to work on a campaign for an initiative that would be worded identically to a bill co-authored by state Sens. Patrick Johnston (D-Stockton) and Frank Hill (R-Whittier). The bill failed to win passage last month in a Senate committee.
Three years ago, California voters overwhelmingly rejected a no-fault initiative sponsored by the insurance industry, but that initiative constituted a wish list for everything the industry wanted and was more than 100 pages long.
The Johnston-Hill bill is far simpler and promises big savings for millions of consumers who are hard-pressed to pay for insurance. The aim is to cut down on legal costs by going to a no-fault system under which accident victims could collect the first $15,000 of their medical costs and some lost wages from their own insurers rather than other parties at fault.
Critics, however, charge that when all desirable additional coverages are added to the bare-bones $220-a-year coverage--such as collision, theft and liability protection--some middle-class drivers may pay as much or more under the new system.
The prospective battle lines for a new no-fault initiative are similar to what they were in 1988: It would probably be insurers in support, the California Trial Lawyers Assn. in opposition and consumer groups split between the two.
A large number of minority and low-income consumer groups joined the Consumers Union in an unsuccessful campaign this spring to influence liberal legislators to vote for the Johnston-Hill bill. They were opposed by consumer advocate Ralph Nader and Proposition 103 author Harvey Rosenfield’s Voter Revolt organization.
Insurers funded a campaign of more than $1.2 million by the consumer groups for the no-fault bill, while the trial lawyers helped orchestrate the opposing groups’ effort against it.
Wilson aides lost no time Wednesday, as soon as word of the governor’s intentions got out, in calling for aid from consumer groups that support no-fault insurance. Strategy of no-fault campaigns has been to use these groups out front while the industry puts up most of the money.
John Gamboa, head of the Latino Issues Forum, one of the most active of these groups, said Dan Schnur, an aide for the governor, “called us and asked if the team were still together and we said, ‘Absolutely.’ ”
However, caution was expressed by industry spokesman Robert Gore of the Assn. of California Insurance Companies. “Many of our members aren’t enthusiastic about another prolonged initiative drive,” he said. “The governor’s involvement could change things. We’ll see.”
Insurance Commissioner John Garamendi said he viewed the governor’s initiative announcement as “an interesting ploy to get a low-cost auto bill out of the Legislature” by encouraging a compromise to avoid a costly initiative campaign.
Meanwhile, both the Trial Lawyers Assn. and Rosenfield began rallying opposition to the initiative.
A trial lawyers spokeswoman called it “unfortunate that the governor would be turning to the ballot this quickly” and tartly noted “the history of no-fault’s rejection by the voters.”
Rosenfield said, “I think Pete Wilson would have to be crazy to begin his governorship by aligning himself so early on with the insurance industry’s agenda.”
In another development Wednesday, Garamendi announced that he has begun a full-scale investigation of the Allstate Insurance Co. for steps it is undertaking to try to reduce its sales of auto insurance in the state.
Garamendi expressed concern that Allstate’s moves could violate the “take all comers” provision of Proposition 103 if the actions made buying from the company so inconvenient as to be too difficult for the average customer.
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