A Crying, Lying Shame

California voters who have been furious for years over their skyrocketing bills for automobile insurance now have something else to be mad about: the wretched campaign of distortion, deceit and demagoguery that the insurance industry has waged to defeat every reform initiative on Tuesday’s ballot and to protect its own profits and prerogatives. The industry already has acknowledged collecting $57 million for this media blitz, and reports by the Fair Political Practices Commission suggest that insurer spending may actually top $70 million once the mailings by individual insurance companies are tabulated; that’s more than the entire 1984 presidential election cost. Even the most fair-minded person may wonder, watching the insurance ads preempt the beer commercials on prime-time television, how an industry that constantly pleads poverty can afford to stage the most expensive political campaign in California history. The answer, of course, is that the insurers are using their policyholders’ money.

If, in this orgy of spending, the insurers’ ads have stated one truth, we missed it. Instead of explaining the root causes of California’s insurance crisis--climbing accident rates, litigious drivers, soaring medical costs, auto-insurance fraud, excessive pain-and-suffering awards--the insurers have taken the low road. As support for their flawed no-fault plan--Proposition 104--has evaporated, they have blamed the insurance crisis on trial lawyers who, along with key consumer groups, are backing rival Proposition 100. As Proposition 103--the Ralph Nader-backed initiative--has pulled ahead in the polls, the insurers have produced outrageous attacks on its author, Santa Monica activist Harvey Rosenfield, that are tinged with anti-Semitism.

But the insurers’ forte has been a classic divide-and-conquer strategy. In Northern California the insurers have saturated radio and television with commercials designed to capitalize on hostility toward Los Angeles. Northern Californians have been warned, in menacing tones, that Propositions 100 and 103 are designed to reduce Angelenos’ insurances rates while boosting rates throughout the north. “Why should we pay more while L.A. pays less?” wails the announcer. Those ads are based on a completely false premise, that Propositions 100 and 103 would abolish the territorial ratings that make insurance more expensive in the inner cities than in suburban and rural areas. In fact, both propositions would reduce but not eliminate the role of zip codes in rate-making and promise across-the-board reductions for safe drivers throughout the state.

Scare tactics also underlie new commercials aimed at drivers over the age of 50. A slightly graying man who boasts that he has not had a ticket since V-E Day complains to his wife that, under Propositions 100 and 103, they would “pay the same for auto insurance as teen-age drivers.” That, too, is a complete fiction; Proposition 100 would require insurance rates to be based primarily on a driver’s own record, and 103 specifically calls for a driver’s years behind the wheel to be taken into consideration.

Correcting all the insurers’ misstatements would require not a truth squad but a truth army. Their overriding philosophy seems to be to sow enough doubts about Propositions 100 and 103, the only measures endorsed by consumers’ groups and the state’s major newspapers, that nothing will pass on Tuesday. Although Gov. George Deukmejian has urged No votes on all the insurance initiatives, that would be a disaster; it would allow rates to continue to climb and would shield the insurance industry from meaningful state regulation.

On Tuesday voters can push California one step closer to insurance reform by voting for Proposition 100. It offers good drivers an immediate 20% rollback in rates and future 20% discounts. Its regulatory system, which we prefer to the more drastic scheme outlined in 103, would make insurers justify their rate increases without driving them to the brink of insolvency. And, most important, it leaves the door open to legislative action, like the adoption of a first-rate no-fault system, that could make it possible for insurers to afford the discounts. A Yes vote on Proposition 100 also will send a message to the spendthrift insurers: Californians cannot be bullied or bought.