Proposition Summary

AUTOMOBILE AND OTHER INSURANCE. INITIATIVE STATUTE. Establishes no-fault insurance for automobile accident injuries, covering medical expenses, lost wages, funeral expenses. Accident victim may recover from responsible party only for injuries beyond no-fault limits. Prohibits recovery for noneconomic injuries except cases of serious and permanent injuries and specified crimes. Reduces rates for certain coverages 20 percent for two years. Cancels Propositions 100, 101, 103. Restricts future insurance regulation legislation. Requires arbitration of disputes over insurers' claims practices, limits damage awards against insurers. Prohibits agents and brokers from discounting. Increases Insurance Commissioner's power to prosecute fraudulent claims. Limits plaintiffs' attorney contingency fees in motor vehicle accident cases. Summary of Legislative Analyst's estimate of net state and local government fiscal impact: Would increase state administrative costs by about $2.5 million in 1988-89, varying thereafter with workload. to be paid by additional fees on the insurance industry. State and some local governments would have unknown savings from lower insurance rates and liability limitations. Possible but unknown effect on recovery of workers' compensation. Possible reduction in court costs and court revenues could result from limitations on claims for noneconomic damages. Would reduce state revenue from the gross premiums tax by about $25 million a year for two years if no other changes are made in insurance rates.

Proposition Number




Document Type




Popular Vote Results

Y: 2391287; A: 25.42; N: 7015325; B: 74.58

Election Type

General Election

Proposition Type

Initiative statute

Relevant Case


For Author

Dianne Feinstein, Former Mayor of San Francisco; Alfred F. Federico, President, California State Automobile Association (AAA); Pat Nolan, Member of the Assembly, 41st District Assembly Minority Leader

Against Author

Ralph Nader, Consumer Advocate; Harvey Rosenfield, Chair, Voter Revolt to Cut Insurance Rates/Proposition 103

Rebuttal Author

Harvey Rosenfield, Chair, Voter Revolt to Cut Insurance Rates/Proposition 103

Rebuttal Against Author

Richard U. Robison, President, Southern California Auto Club; Betty Smith, Former Chair, California Democratic Party; Jim Nielsen, State Senator, 4th District Vice Chair, Senate Insurance Claims and Corporations Committee