Pay-at-Pump Auto Insurance Backers May Try for Ballot

Unlikely to make progress in the Legislature, the chief advocate of pay-at-the-pump car insurance Wednesday took the first steps toward putting the proposal before California voters next year as an initiative.

Author Andrew Tobias announced he has hired political operative Mike Johnson, a former assistant to Ralph Nader, to supervise the drafting of a workable no-fault plan that would be “airtight” against defects. Johnson also will examine the political and financial feasibility of conducting what would be a very costly campaign.

“It is quite an undertaking to do an initiative. I’m not prepared to say I am going to do it, but it is certainly worth looking at,” said Tobias, a Time magazine columnist and author of the recently released book “Auto Insurance Alert.” He donates royalties from the book to consumer and energy conservation organizations.

Tobias made the announcement to reporters as the Senate Insurance Committee prepared to hear a controversial pay-at-the-pump no-fault insurance bill carried by committee Chairman Art Torres (D-Los Angeles). The committee postponed a vote until next week.

The legislation is opposed for different reasons by two veteran adversaries, the insurance industry and personal injury attorneys, both major campaign contributors with deep influence in the Legislature. It draws support from Insurance Commissioner John Garamendi and representatives of consumer, low-income and ethnic minority organizations, but the legislative obstacles are severe.

A few hours before the hearing, Torres conceded that the legislation would not win the approval of the Insurance Committee because it was certain to be defeated in its next stop, the Judiciary Committee.

Torres said some election-minded members of the Insurance Committee told him they did not want to vote for it and then “take all the heat from the insurance agents when the bill is going to die in the Senate Judiciary Committee anyway.”

Under the bill, individual premiums and the need for most insurance agents would be eliminated. Instead motorists would pay for no-frills coverage with a surcharge on their purchases of gasoline, higher license and car registration fees, and heavier traffic fines.

Depending on who is making the estimate, the extra cost per gallon varies widely. Tobias has figured it at about 30-40 cents on top of the cost of gas purchased at the same time; some opponents have maintained it could be as high as $1.

Advocates argued that motorists’ costs would be sharply reduced because a no-fault insurance system would be imposed, requiring a driver’s own insurance to pay costs of an accident regardless of who is to blame. This would eliminate much expensive litigation. But personal injury attorneys charge that it would also wipe out the ability of an injured motorist to sue for pain and suffering caused by another driver’s negligence.

The fate of the Torres legislation was largely decided last month when the Senate Rules Committee sent the proposal to both the Insurance and Judiciary committees for action. Although the insurance panel had been regarded as generally friendly to the program, the Judiciary Committee long has been a dead end for no-fault bills.