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Gubernatorial candidates miles apart on auto insurance
Originally appeared in Press Plus on October 9, 2001
WOODBRIDGE - Democratic gubernatorial nominee Jim McGreevey promised to crack down on uninsured drivers and toughen penalties for insurance fraud as part of his plan to deal with rising auto-insurance rates.
Appearing at a car dealership in his hometown, McGreevey also criticized his Republican opponent, Bret Schundler, Monday for calling for partial deregulation of the auto-insurance industry, saying it would force good drivers to pay for bad drivers' mistakes and increase rates.
"If you want to get (a settlement that includes payment for) pain and suffering, you have to initiate a first-person lawsuit against your own insurance company," McGreevey said. "This is the absurdity of the Schundler plan. You're driving up your own rates."
But the Schundler campaign said McGreevey's plan will do nothing to lower rates, which are the highest in the nation for the seventh consecutive year, and partial de-regulation would lead to further competition, which would accomplish that goal.
The Schundler campaign also said McGreevey's opposition to their plan stems from the opposition of trial lawyers, key supporters of the Woodbridge mayor's campaign.
McGreevey, who made auto insurance a central theme in his run against former Gov. Christie Whitman in 1997, has not emphasized the issue as much during his second run.
In a sense, the plans of the two candidates mirror their overall platforms - McGreevey favors more modest changes made within the current system while Schundler calls for sweeping, systemic change. Both candidates charge that their opponent's plan is a sign of being beholden to a major interest group - whether it be the insurance industry or the trial lawyers.
McGreevey said Monday that about 600,000, or 15 percent, of drivers in the state are uninsured, costing the state $600 million a year.
He supports the restoration of the office of Public Advocate, who would review any planned automobile-insurance rate hikes.
McGreevey's plan also would call for:
[] Development of a computer database connected to all police cars so officers would know if a stopped driver has insurance or not.
[] Impounding cars of drivers without insurance if they can't prove they are insured within 24 hours.
[] Requiring insurance identification stickers.
[] Tougher penalties for fraud, including mandatory jail time.
[] Requiring auto-insurance companies to open hearings.
"The mayor's top priority is protecting New Jersey drivers," McGreevey spokesman Sean Walsh said. "Mr. Schundler's top priority is protecting the auto-insurance industry."
Schundler supports the elimination of state regulation of insurance-rate increases.
He has called for state motorists to have the option to waive the right to sue for pain and suffering, a plan that a study by the RAND Institute found could reduce premiums by 20 percent to 30 percent.
Schundler, in an interview last Thursday, said that the RAND study showed that if motorists have insurance that protects only against losses, it would be much less
expensive than a combination of insurance and pre-paid litigation coverage.
"The nature of pain and suffering law is that it's not about your losses, but it's about a penalty, on top of your losses," Schundler said.
"Now that kind of a thing drives up the cost of car insurance. I think it's fine for people who want to buy more. They should be able to. But I don't want to have to buy that. Why should I have to buy that? I want insurance that will cover me for my losses," he said.
Schundler spokesman Bill Guhl said the only reason McGreevey opposes the plan is the opposition of trial lawyers, who have been significant contributors to the Woodbridge mayor's campaign.
"Jim McGreevey's plan lacks pretty much all of the essential elements that you would need to lower auto-insurance rates in the state," Guhl said.
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