I'm pleased to present our second installment of Reader Spotlight in this week's issue. That in addition to two letters to the editor makes this week more action-packed than usual! I'm happy that so many of our readers are taking an active role in CAW. Keep it up.

On a personal note, I spent the weekend completely redesigning my Web site. It's still not entirely finished just yet (are sites ever totally done? =), but please take a look (www.gabeanderson.com) if you'd like.

Have a great week!

-Gabe

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The reason is simple: Any real change in the multi-billion-dollar auto insurance system requires a compromise between two of the state's most powerful special interests, the trial lawyers and the insurers. Thus far an agreement has proved elusive.

This year, however, insiders in the Capitol say that some form of compromise is likely to be reached, a compromise that could directly affect millions of California motorists in the place they feel most -- their pocketbooks.

With both houses of the Legislature and the governor's office in the hands of Democrats for the first time in 16 years, the likelihood is that some type of low-cost policy will be approved, and that it won't take the form of no-fault, the policy traditionally favored by insurers.

The lawyers have bitterly opposed no-fault, in which a motorist's insurer settles most claims outside of court regardless of who is to blame. No-fault exists in several states, and insurers contend it lowers premiums because it lowers court costs -- a savings that is passed on to the consumers. Not surprisingly, lawyers oppose no-fault because it cuts them out of fees, particularly contingency fees. And, they add, who wants to trust insurance companies to pass on their savings to customers?

With no-fault off the table -- and both the lawyers and insurers say it is because Gov. Gray Davis would be unlikely to sign such a bill -- that leaves some other form of low-cost policy. There are at least two options this year, and the probability is that one of them will be approved. Both are still in draft form.

The first would set a ceiling on premiums, perhaps $300 annually, for good, low-income drivers regardless of where they live. This proposal is backed by inner-city Democrats, who are allies of the lawyers. But insurers don't like it, because they say it would create subsidized auto insurance that would be cheaper in urban areas while forcing increases in low-risk areas.

The second would reduce the minimum level of liability required to meet California's mandatory insurance law. Because the coverage is less, the policy would cost less. This proposal is sponsored by the insurance industry as a means of lowering costs without making changes in the tort system.

What both sides don't want is the kind of costly battle that erupted in 1988, when voters approved the insurance-overhaul inititiative Proposition 103, or in 1998, when voters approved Proposition 213, which barred uninsured motorists from collecting pain-and-suffering damages. The merits of each initiative aside, both wound up costing the lawyers and insurers tens of millions of dollars. Both sides want to reach a compromise without a ballot-box war.

Given the money-driven politics of the Capitol, along with Davis' self-professed moderation, the likelihood is that Option 2, a lowered liability policy, ultimately will be approved.

A simple truth of politics is that voters like politicians who save them money. That means that state politicians from Davis on down view a workable low-cost auto insurance program as a big political plus, and they'll be sure to remind voters of that in coming campaigns.

They are overshadowed now in Sacramento by education and the environment, but insurance issues are likely to capture increasing attention as the year progresses. You can depend on it.

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