Editorials
Monday, March 10, 1997
House reform of
auto insurance law flawed
THE Legislature is busy with bills aimed at reducing the cost of auto insurance, but the claims of savings are disputed. An analysis of the House version of auto insurance reform by AIG Hawaii Insurance Inc. concludes that the measure, rather than reducing premiums by 25 to 35 percent, as claimed, would lower premiums by at best 3 percent and at worst increase them by 20 percent.
A hypothetical couple who owned a townhouse and had two cars would probably see their costs rise from the current $2,017 a year to $2,361, AIG figures. Linda Gilchrist, AIG executive vice president, said, "Anyone who owns a home or has assets, in our view, is not going to see a discount under this bill."
Tim Dayton, local manager of Geico General Insurance Co., said his company would need to raise premiums at least 8 percent to meet the added costs under the House measure.
The bill would repeal the no-fault system and replace it with a tort-based system in which accident victims would sue drivers for damages. This is not going to make insurance cheaper, because it is likely to increase the number and cost of lawsuits. That's why abolishing no fault would be a mistake. Rather, it should be strengthened.
Another defect of the House bill is that it would shift the medical costs for auto accidents to the state health-care system, which means a heavier financial burden for employers.
Insurance company numbers may be challenged on the basis of self-interest, but the companies have the expertise to get it right. The co-chairmen of the Senate Consumer Protection Committee, David Ige and Rosalyn Baker, are taking the companies' estimates seriously. The Senate should be encouraged to insist on improvements to this flawed proposal.
One sweet dream
UNDERSTANDABLY, Aiea residents want to save the historic but non-operating sugar mill in their midst -- although that does not look fiscally feasible in the short term. Some middle-ground compromise may have to be reached between completely razing the mill and memorializing the landmark as a garden or a park.
Selective Service
THE East-West Center is struggling for survival, with its federal funding cut brutally and the Clinton administration trying to phase out its money entirely. But the White House's budget request for 1998 contains almost exactly the amount needed to restore the center to normalcy -- $24 million. And it's for a program that -- unlike the East-West Center -- is no longer needed.
Diamond Head trail
IT'S not quite Mount Fuji, but Diamond Head has become phenomenally popular with hikers. Nearly a million people made the 0.7 mile trek to the summit last year. With all that traffic plus erosion, the trail had become badly worn, with some areas deeply rutted. Now that's been corrected, with the application of an acrylic latex polymer to the surface. It looks like dirt but it's paved and mud-free.
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