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EXPLAINING THE PROPS

This is a package deal. Prop 105 would amend the Arizona Constitution to eliminate the right of one motorist to sue another for damages in most circumstances. Prop 203 implements the "no-fault" plan, which is touted as "consumers' choice." A no-fault "personal protection" policy would provide coverage of $15,000 for medical claims and lost wages (with a maximum $5,000 death benefit) and $10,000 for property damages. But if the driver buys a no-fault policy, he waives the right to sue someone who may be at fault for damages, pain or suffering. In return, the insurance company agrees to a one-time rollback of rates.

If two drivers with no-fault policies collide, each insurance company pays for its driver's medical, wage and property losses up to the limits of the policy. It doesn't matter who is to blame, and nobody sues for damages.

Some highlights from the 33 pages of legalese that make up Prop 203:
* A no-fault driver still could be sued by a motorist holding a traditional policy--and the no-fault driver would have no insurance coverage to protect him from a possibly devastating jury verdict.

* A no-fault driver must pay a $250 deductible before receiving any benefits--even if the other party is completely at fault in an accident.

* If an injured no-fault driver misses work, the insurance companies must only pay a maximum of $200 a week in compensation. Under traditional policies, that amount is negotiable.

* All insurance holders will automatically be given no-fault policies. If a driver wishes to keep his traditional liability policy and reserve the right to sue for damages, he must contact his agent and sign a request. Traditional policies are expected to cost more than they do now.

* The insurance companies would pay less in benefits to policyholders who have other sources of steady income like social security. For example, the elderly, students and homemakers could get no compensation if they are involved in an accident because they aren't actually losing any wages. For this reason, the American Association of Retired Persons has blasted Prop 203.

* The insurance companies could choose which doctors treat injured drivers holding no-fault policies.

* Insurance agents couldn't be sued for misrepresenting or lying about a policy or benefits.

MDRVProposition 201

Authored by state representative (and insurance-industry nemesis) John Kromko of Tucson, Prop 201 is backed by representatives of the Arizona Trial Lawyers Association as a "rational insurance reform option" to Props 105 and 203.

Prop 201 would slash insurance rates by 20 percent, create an independent consumer advocacy office to represent citizen interests in rate-hike hearings and give the state Department of Insurance prior approval over all rate hikes. It is viewed by insurance companies as an intolerable choke collar that would create a layer of expensive bureaucracy.

The industry says Arizona motorists are as likely to see lower rates as they are snow in July. California passed a rollback measure in 1988, but its state Supreme Court ruled it unconstitutional, saying it prevented the insurance companies from making a "fair and reasonable profit." A Nevada rollback met a similar fate last month in federal court.

Prop 201 still could have far- reaching effects. Establishing a consumer-advocacy organization in the Department of Insurance would triple the department's $3 million budget and make each hike in auto-insurance rates a highly publicized slugfest, akin to rate battles between utilities and the Arizona Corporation Commission. The advocacy group called for in Kromko's measure would be similar to the Residential Utility Consumer Office, which is a watchdog on utility rates. Insurance companies currently don't need state approval for rate hikes.

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Darrin Hostetler