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Race for New Jersey Governor Turns to Car-Insurance Reform
Originally appeared in the New York Times on October 9, 2001 WOODBRIDGE, N.J., Oct. 8 — James E. McGreevey used a day when the attention of many voters was directed far from New Jersey to outline his plan for reducing the state's exorbitant auto insurance rates. But he provided few details, and there was little in his proposal that he had not called for four years ago in his last run for governor.
And as much as he promoted his own ideas, Mr. McGreevey attacked the proposals of his Republican opponent, Bret D. Schundler, which include deregulating the auto insurance industry.
Mr. Schundler had no public events today. But his allies in the state Republican Party criticized Mr. McGreevey and his supporters for describing Mr. Schundler throughout the campaign as an "extremist," saying that the Sept. 11 terrorist attacks had made clear the true definition of the term.
"Americans have seen the face of extremism in the terrorist attacks against our nation," the state Republican chairman, Joseph M. Kyrillos Jr., said in a statement from Trenton. "For Jim McGreevey and the Democrats to label Bret Schundler an extremist at this time is offensive and irresponsible."
A McGreevey spokesman, Richard McGrath, replied that it was wrong to invoke the terror attacks and that "whatever word is used, there is no doubt that Bret Schundler is way outside the mainstream on important issues."
Mr. McGreevey said today that as governor he would seek to reduce auto insurance premiums in New Jersey, which are the most expensive in the country, by cracking down on fraud and uninsured drivers.
Mr. McGreevey, who is the mayor here, announced his proposal at a Columbus Day news conference at a local Dodge dealership, weighing in on one of New Jersey's thorniest issues on a day when most Americans were focused on the military action in Afghanistan.
"I think people in New Jersey think about auto insurance every day," he said in response to a reporter's question.
In outlining his initiative, Mr. McGreevey called for recreating the position of public advocate, ended by former Gov. Christie Whitman, to help drivers oppose rate increases in Trenton. He vowed to impound the vehicles of uninsured drivers and estimated that 600,000 New Jersey car owners have no insurance. He also called for better computerization of insurance records.
But as loudly as he championed his own ideas, Mr. McGreevey derided the auto insurance plan put forward by his Republican opponent. "Mr. Schundler's plan, respectfully, is dangerous," Mr. McGreevey said, attacking a proposal to let drivers waive their right to file certain lawsuits in exchange for lower rates.
"Mr. Schundler's proposal is actually rewarding bad drivers," Mr. McGreevey said. He also sharply criticized Mrs. Whitman for failing to adequately address the state's auto insurance problems. In 1997, Mr. McGreevey nearly defeated Mrs. Whitman in his first run for governor by harping on the issue.
Tom Gallagher, a spokesman for the Schundler campaign, criticized the McGreevey plan, saying it offered nothing new. "Like most of his plans, it's really style over substance," Mr. Gallagher said.
Mr. Schundler has said that he believes the auto insurance industry is too strictly regulated in New Jersey and that this drives up rates. He has proposed easing government regulation to make New Jersey a more attractive market to insurance companies. Several insurers have said they no longer want to do business in the state because it is too difficult to make a profit.
Mr. McGreevey maintains that state regulation is crucial if lower rates are to be realized. He has proposed bringing more criminal charges in insurance fraud cases and requiring mandatory jail sentences for serious fraud offenses.
But several insurance industry experts said that fraud and uninsured motorists were only a small part of a larger problem. They said they needed to hear much more detailed proposals from both Mr. McGreevey and Mr. Schundler before they could decide if either had any merit.
"We cannot offer our thoughts based on a press release," said Ryan Salonia, a spokesman for State Farm Indemnity Company, which is the largest auto insurer in New Jersey and has said that it would prefer not to do business in the state.
John K. Tiene, president of the Insurance Council of New Jersey, said that insurers always favored antifraud measures but that his group would oppose Mr. McGreevey's proposal for state public advocate to take over responsibilities now handled by the state banking and insurance commissioner.
"In the past the public advocate really didn't add anything to the discussion and just added more costs and bureaucracy to the process," Mr. Tiene said.
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