Great Insurance Debate

ONE thing appears certain about California's car insurance initiative, Proposition 103: It's forcing needed debate on an issue that hits millions squarely in the pocketbook. Now that the California Supreme Court has upheld most provisions of the proposition, the way is open for dozens of consumer groups in other states to hop aboard the insurance-reform bandwagon. The industry, which argued that voter-set rate reductions amount to punishment without due process, is bracing itself.

A danger in this debate is the tendency to quickly latch onto ``solutions'' that promise immediate relief. Consumers want instant rate rollbacks, but rate chops by public fiat may only delay coming to grips with the underlying reasons rates are high to begin with.

For the industry, the cure-all is no-fault insurance. This approach addresses one source of high costs - escalating court settlements. But it doesn't satisfy a public suspicious of industry practices such as sharing rate-setting data among companies. Critics view this as price fixing and are battling it all the way to Congress.

What's needed, overall, is a careful reassessment of the way auto insurance is handled. Ultimate solutions, if such are to be found, might end up embracing ideas coming from both sides.

For instance, many consumers can't understand why, no matter how good their driving record, their insurance rates still climb. One of the provisions of Prop. 103 requires that driving records, not place of residence, be the dominant factor in determining rates. The industry has its arguments, related to actuarial findings, but there should be ways of giving an individual's record added weight.

On some reforms - safer cars, better road design, lowering auto repair costs - industry and consumers ought to join forces.

Under the California ruling, insurance providers can apply to the state for relief from the 20 percent rollbacks mandated by Prop. 103. In the course of showing they're being deprived of a ``fair and reasonable'' return, insurers will have to open their books to public scrutiny. That should give people a little better idea of who - the industry or its critics - is closer to the truth about costs and rates.

The insurance debate is likely to be a long one. Let's hope that a fair-minded concern for the facts, not emotion, characterizes it.