Court to Hear Arguments in Major 103 Lawsuits Challenging the Continued Use of Arbitrarily-Based Auto Insurance Rates

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Consumer and Civil Rights Organizations Joined by Cities of Los Angeles, Oakland and San Francisco in Lawsuits Against Insurance Commissioner

An Alameda Superior Court judge will hear oral arguments on Friday that insurance companies are continuing to illegally use arbitrary factors, such as ZIP-code, gender, marital status and persistency, as major determinants in auto insurance rates, in direct contrast to voter-approved Proposition 103.

Proposition 103, approved by voters in 1988, requires that a motoristís auto insurance rates be based primarily upon three mandatory factors, in decreasing order of importance: driving safety record, annual mileage driven and years of driving experience. Insurers are then permitted to use optional factors approved through regulations by the Insurance Commissioner, but the optional factors can not have a greater impact on rates than the mandatory factors approved by the electorate.

However, Commissioner Chuck Quackenbush is allowing insurance companies to evade the rules through statistical manipulation. Consumer organizations challenged the regulation which permitted ZIP-code to be given more weight than 103’s mandatory factors in hearings before the Department of Insurance last year.

But, this January, Quackenbush upheld the continued use of territory, or ZIP-code, as a primary factor in rate-setting, as well as the use of other arbitrary and discriminatory factors, such as gender, marital status and persistency (the length of time a policyholder has been with the insurer). By taking this legal action, the Project fully intends to expose the ruse that the Commissioner has perpetrated on California’s beleaguered motorists.

Joining the Project in two lawsuits against the Commissioner are the cities of Los Angeles, Oakland and San Francisco, as well as other leading consumer and civil rights organizations.


Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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