Auto Insurance Report Card Released

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Two advocacy groups released a report card Tuesday on how well car insurance companies tie your premiums to the number of miles you drive.

Most of California’s largest auto insurers received failing grades.

It seems simple enough. The fewer miles you drive, the less likely you are to get into an accident. Few would disagree with that. But, when it comes to giving you a discount for driving less, not all insurance companies are created equal.

Carmen Balber is with Consumer Watchdog and says, "We are finding that unfortunately, California’s insurance companies don’t make the grade when it comes to closely tying insurance premiums to drivers’ annual miles driven."

21st Century and Northern California AAA tied for first in Consumer Watchdog’s rankings, but both only received a "C" grade. State Farm received the worst grade with an "F."

Balber says, "State Farm receives a failing grade because most drivers with State Farm policies who drive less will not pay less."

State Farm told 7 On Your Side it offers its customers numerous discounts and that "miles driven" is only one of many available.

Tully Lehman with the Insurance Information Network says, "Some companies will be a little more friendly. Some will not be. It just depends on the company. If the mileage is most important to you as a consumer, that’s one of the things you need to do, is just shop around."

Insurance Commissioner Steve Poizner says this year he will release new regulations more closely tying insurance premiums to miles driven. He is trying to come up with ways to help those companies verify the actual miles driven by their customers.

"This is actually one of the best things for consumers because when consumers actually have this mileage discount that’s available to them, it is important for them to know how many miles are being driven, so that way, everyone can pay exactly what it is that their driving for," says Lehman.

The Natural Resources Defense Council (NRDC) says that in the end everyone will benefit with cleaner air.

Justin Horner with the NRDC told 7 On Your Side, "If all California drivers utilize pay-as-you-drive insurance, we would project that there would be an 8 percent reduction in total vehicle miles traveled, which is a significant decrease in global warming pollution."

All sides of the issue agree. Insurance companies need to do a better job getting an accurate reading of the actual miles driven by their customers each year.

Click here to see Consumer Watchdog’s "Pay As You Drive" Scorecard.

Consumer Watchdog
Consumer Watchdog
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