NO-FAULT AUTO PLAN CLEARS ASSEMBLY.

Byline: Dan Bernstein Scripps-McClatchy Western Service

With proponents promising that auto insurance premiums would drop by 25 percent, the California Assembly on Wednesday approved a bill to create a sweeping no-fault automobile insurance system in California.

Proponents said it was the first time in about 25 years that a no-fault automobile insurance bill cleared one of the houses of the Legislature. The measure was part of the juggernaut of pro-business bills passed in recent days at the urging of Assembly Republicans.

The bill, which passed on a partisan vote of 42-29, would dramatically alter the automobile insurance system in California. Under the bill, accident victims could recover damages only from their own insurance companies. They would be precluded from suing other drivers, except under rare circumstances.

Supported by Gov. Pete Wilson, the bill is nearly identical to a voter initiative slated for the March primary ballot. But there is one key difference: Unlike the ballot measure, the bill would wipe out the no-fault system if premiums were not reduced by 25 percent within a year.

Proponents say the bill will result in lower premiums for most drivers because insurance companies would not have to spend money determining who is at fault in accidents and defending lawsuits by accident victims.

"The current system is a mess and it needs to be fixed," said Assemblyman Jim Brulte, R-Rancho Cucamonga, author of the bill.

But opponents argue that the system will result in grossly inadequate compensation for many accident victims who purchase the standard policy of $50,000 in medical coverage.

"People should not give up the right to sue - that's overreaching," said Harry Snyder, regional vice president of Consumers Union. "If your life is ruined because of somebody else's extreme negligence, you ought to have something to cover that."

Proponents acknowledge that under the proposed system there might be some cases in which accident victims may not recover the full amount of their damages. But they say the current system results in far greater inequities because the culpable driver often has no insurance or assets.

There have been a variety of no-fault proposals in California in recent years, but most of them have retained the right to sue if damages exceeded a certain amount. Regardless of the details, the issue invariably has pitted the insurance industry against the trial lawyers.

"This bill may not be perfect, but it is a heck of a lot better than the status quo that the trial lawyers are so anxious to defend," said Assemblyman David Knowles, R-Cameron Park, chairman of the Assembly Insurance Committee.

Assembly Democrats pointed to figures showing that six other states with no-fault automobile insurance systems have average premiums that are higher than California's. And they argued that the bill was a departure from the Republican tenet of individual responsibility.

"It means that a person who is responsible or guilty in a traffic accident doesn't have to pay damages he or she causes," said Assemblyman Phillip Isenberg, D-Sacramento.

Brulte framed the question differently: "People who buy insurance are guaranteed insurance coverage while people who don't get nothing," he said. "That is true responsibility."

The bill faces an uphill battle in the Democratic-controlled Senate, where President Pro Tem Bill Lockyer of Hayward is a strong opponent of no-fault automobile insurance. But another key Democrat, Sen. Pat Johnston of Stockton, has supported a limited version of no-fault insurance in the past.