Supervisors say insurance rates go up under plan

Tulare Advance-Register (Tulare, CA)

VISALIA – Tulare County supervisors have officially registered their opposition to a petition that they said could leave county residents paying as much as 7 percent more for car insurance.

A petition before Insurance Commissioner John Garamendi has asked that an investigation of how some factors, such as where a person lives, dictate the cost of car insurance.

The petitioners include the Consumers Union, the National Council of La Raza, the Foundation for Taxpayers, Consumer Rights, and the cities of Los Angeles, Oakland and San Francisco.

Small cities vs. big

But petition opponents – an organization calling itself Californians Against Higher Insurance Rates – say a change in the way rates are figured would leave residents in rural areas paying more for car insurance and those living in congested areas, such as Los Angeles, would pay less.

“We find it largely unreasonable that we would have to bear the burden,” Tulare County Supervisor Bill Sanders said.

In a rare action Tuesday, the board considered an item that was added to the agenda because of urgency and unanimously voted to pass a resolution opposing the petition.

It then asked county Chief Administrative Officer Brian Haddix to present the resolution at a public hearing on the issue hours later in Fresno.

The Fresno hearing was the last of seven held state-wide to gather public comment on factors used to set California auto insurance rates, said Gary Gartner, a spokesman for the department of insurance.

Workshops will follow the hearings in late summer, and a plan for determining insurance rates could be in place by fall, he said.

Rates

According to a study commissioned by the Personal Insurance Federation of California and the Association of California Insurance Companies on the effect of the proposals made by the petitioners, Visalia residents could see an increase, on average, of 5 percent in their auto insurance rates, but rates in the city of Los Angeles would go down by 21 percent. Rates in Tulare County would increase on average by 7 percent, it said.

Proposition 103, approved by voters in 1988, required auto insurance companies to base rates on driving safety record, annual miles driven and years of driving experience.

It said other factors, such as type of vehicle, driver gender and marital status and location, could also be used.

Those petitioning Garamendi are concerned that current regulations allow territory, usually defined by zip code, to have a greater effect on rates than the three individual, mandatory factors.

While Garamendi said basing premiums primarily on zip codes is unfair to people throughout the state, he said he has not yet proposed a way to change that.

“I have made no decision,” he said. “There is no proposal that I am going to make that will cause the rates in rural California to go up so they can be lowered in urban California.”

Tulare County residents are among those drivers who pay less for car insurance than people living in urbanized cities because of where they live, said Veronica Salazar, a personal lines agent with Buckman-Mitchell, a major insurance broker in Visalia.

That’s because traffic is less congested, so theoretically people aren’t as likely to get in accidents and file insurance claims as they would be in more congested areas of the state, she said. “For us, in our area, [current law] works out to be a good thing,” she said.

Visalia Councilman Jesus Gamboa said he wrote a letter to Garamendi opposing any increases in car insurance.

“In our community we have a lot of people on fixed incomes, we have a high poverty level, a high unemployment rate,” he said. “It’s going to put more of a burden on our residents if this passes.”