On car insurance, candidates for governor driven apart Schundler wants government to get less involved. McGreevey wants it more involved. Even the experts disagree.

The deep philosophical differences between the two major-party candidates for governor could not be more clear than on the always volatile issue of car insurance.

Democrat James E. McGreevey sees state government as the answer, while Republican Bret D. Schundler sees it as a big part of the problem.

At a car dealership yesterday in his hometown of Woodbridge, Middlesex County, McGreevey promised to use state government like a blunt instrument to keep New Jersey's car-insurance rates - already the highest in the nation - from rising. Fleshing out proposals that he had raised earlier in the campaign, McGreevey promised to crack down on uninsured drivers, impose tougher penalties for insurance fraud, and restore the Office of the Public Advocate to intervene for consumers in rate-hike cases.

Estimating that 22 percent of auto premiums pay for fraud and uninsured drivers, McGreevey said his administration's goal would be "to tackle those two challenges."

Even that would merely stabilize rates, not reduce them, he said.

When McGreevey hammered away at the issue during his unsuccessful campaign to deny Gov. Christie Whitman's reelection four years ago, he promised to cut auto rates by 10 percent. But this time, he said, "the need to be straightforward" with motorists prevented him from promising rate cuts.

By contrast, Schundler said he could cut premiums by easing government involvement, not expanding it.

In an interview last week to discuss the issues in the gubernatorial campaign, Schundler said he would seek to remove "regulatory barriers" that prevent free-market competition and fair pricing of insurance products.

He said, for example, that insurance companies should have the flexibility to raise and lower rates within a preapproved range to allow them to better react to the needs of the marketplace. He further said he thinks that lowering obstacles to doing business would prompt more insurance companies to enter the state.

Schundler was also critical of the state's excess-profits law, which requires insurers to refund policyholders if their profits average more than 6 percent over three consecutive years.

"If you have a system that says, 'If you make money, we will take the profits; if you lose money, that's your problem,' then that's a good way to make everybody want to leave this state," Schundler said.