Wilson Vetoes Low-Cost Auto Insurance : Legislation: Governor says measure fails to reform the system and cuts costs merely by reducing coverage. He also rejects Speaker Brown’s civil rights bill.

Gov. Pete Wilson on Saturday rebuffed the Legislature’s efforts to overhaul California’s costly auto insurance system by vetoing a measure that would have created a basic no-frills policy costing $350 a year.

In a strongly worded veto message, the Republican governor said the legislation made no fundamental reforms in the system but sought to cut premiums merely by reducing the levels of coverage.

The veto came as Wilson announced his rejection of a series of pet Democratic bills, including a sweeping civil rights measure by Assembly Speaker Willie Brown (D-San Francisco) and Democrat-sponsored legislation revising felony sentencing laws.

Wilson struck down Brown’s bill a day after he signed a compromise measure banning discrimination in the workplace against gays and lesbians. He said his decision to follow a different course on the Brown bill stemmed from his concerns that some of its provisions would overburden California businesses. He argued that the important elements of the bill were embodied in the legislation he had signed.

Some of those features include protection for gays and lesbians and new authority for the Fair Employment and Housing Commission to award damages in cases of discrimination against the disabled.

Although Brown’s measure, the California Civil Rights Restoration Act of 1992, would have covered much of the same ground, its language was tougher and would have prohibited employers from requiring workers to speak only English on the job.

An annoyed Brown insisted that the governor’s veto exhibited “a callous disregard for the basic rights of many Californians who have felt the sting and humiliation of discrimination.”

But in his veto messages, Wilson was careful to favorably acknowledge several of the provisions in Brown’s bill and saved his harshest comments for the auto insurance proposal.

He called that legislation “nothing more than an empty promise to lower the cost of insurance. Californians don’t want any more empty promises, they want guaranteed, available, low-cost auto insurance.”

Wilson, who had been pressed to veto the measure by a wide range of interests, including the insurance industry and doctors, said there can be no true insurance reform until California adopts a no-fault system. Under no-fault, a consumer’s insurance company pays for the costs of an accident regardless of who is to blame.

The veto was a particularly bitter defeat for Sen. Bill Lockyer (D-Hayward), who had managed to get bipartisan support for the legislation despite opposition from some of the most powerful interests in Sacramento.

“There have been numerous actuarial analyses that suggest (the bill) would have saved a significant amount of money,” Lockyer said. “The governor’s view obviously is that only no-fault works and coincidentally that is also the position of his pals at the insurance companies.”

Lockyer said voters rejected no-fault in 1988 by 3-1 margin and speculated that voter distrust of that kind of system is still widespread.

A consultant for Lockyer said the senator’s legislation went much further than just reducing levels of coverage by providing a series of cost-containment measures that would have limited the compensation for doctors who treat accident victims and lawyers who represent them. He said the bill requires both sides in a lawsuit to voluntarily exchange information, which would save significant investigation and litigation costs.

Beginning in 1994, the measure also would have required motorists to prove that they were insured before their vehicles could be registered, but it would have reduced the minimum levels of coverage for bodily injury and property damage for those opting for the no-frills policy at a cost of $350 a year.

Consumer groups were divided on the merits of the legislation. The Consumers Union had expressed concerns that “possible savings claimed in the system are not adequately documented.” On the other hand, Harvey Rosenfield, the head of Voter Revolt, argued that the measure “fixes everything that Gov. Pete Wilson and the insurance companies have ever claimed is wrong with the legal system.” Voter Revolt is the citizens group that sponsored Proposition 103, a measure that attempted to reshape the state’s insurance system.

Meanwhile, Insurance Commissioner John Garamendi, like Wilson, took the position that “no-fault is the best way to go.”

“We communicated our concerns about the bill to the governor. . . . We expected a veto and think that’s an appropriate action for the governor to take,” said Tom Epstein, deputy commissioner for consumer protection.

Epstein said there were several provisions that Garamendi liked about the bill, especially the cost-containment measures. But Garamendi was concerned that the reductions in the limits of coverage were too severe, he said. Rather than a $10,000 limit for personal liability, Garamendi preferred a $15,000 limit, Epstein said.

Neither Lockyer nor Brown seemed inclined to seek an override, but Brown said civil rights legislation will not go away.

“Everyone in our society, especially those who have suffered discrimination . . . should receive redress for bias,” he said.

Although Lockyer said he did not expect to ask the Legislature to overrule the governor’s decision on the auto insurance bill, he would ask for a veto override on a sentencing bill.

In his vetoes Saturday, Wilson also rejected a measure sponsored by Lockyer that would give judges more flexibility in sentencing. The governor said he was concerned that judges would be tempted to give shorter sentences to clear congested court calendars.

“He seems to think all those judges who have been appointed by George Deukmejian (Wilson’s Republican predecessor) and himself these last 10 years are somehow soft on crime. I beg to disagree,” Lockyer said.