Garamendi Calls For Auto Insurance Changes to End "ZIP Code" Rates

[The Straight Story]

Garamendi Calls For Auto Insurance Changes to End "ZIP Code" Rates

The days of California drivers paying wildly different car insurance rates based solely on where they live may soon become a thing of the past.

California insurance commissioner John Garamendi called for new regulations Thursday that would require insurers base their auto rates primarily on a driver's driving record, not on the ZIP code in which the driver resides. Currently, drivers can be charged from $500 to $1,000 more per year for living in mostly urban areas of California, where instances of auto accidents and thefts are higher, according to a non-profit Consumer Union report.

"A good driver wherever they are in the state of California ought to have a lower rate than a bad driver, whereever that person is in the state," Garamendi said.

Garamendi said the changes will help bring California auto rates more in line with the wishes of state voters as outlined in Proposition 103. Passed in 1988, the proposition imposed a 20 percent reduction in auto insurance rates and established strict insurance rate regulations while repealing the industry's protection from antitrust laws.

http://www.kxtv.com/storyfull2.aspx?storyid=14961

[Semi_subversive]

1. That's why I like working for him

Very pro-consumer. He'll be a great Lt. Gov.

[pitohui]

2. how is that pro consumer?

there are good driver rates available anyway, however, when i moved to a zip code w. a low theft & lower accident rate, my insurance rates dropped again, the zip code price break was IN ADDITION to the good driver price break

that sounds more pro consumer to me

how is that better than at least a few people get a deal?

[Semi_subversive]

3. For folks like me

I have an excellent driving record. If I moved 1/2 mile to the east I'd be under a different zip. And my rates would be lower. I think it should be to be based on your driving record and not on whether you live in a ritzier neighbohood. Sound fair?

[MercutioATC]

4. BAD idea. Your driving record is only ONE part of the equation.

The insurance companies base rates on how much it will cost them to insure your car (statistically).

One part of that equation is how well you drive.

Another part is how likely the model of car you own is be stolen.

Another is the accident/theft statistics where you live.

Still another is the cost of repairing the vehicle you own after an accident...

...the list goes on.

ALL of these conditions factor in to how much it costs the insurance company to insure your car. Calling for companies to base rates solely (or even primarily) on driving record just shows a lack of understanding of the issue.