YOUR RATE NO LONGER FIGURED BY ZIP CODE
New state regulations for car insurance mean that how much you drive plays a bigger role in how much you pay for insurance.
For one Modesto man, it really paid to keep track: He saved about $200 on his next premium when he saw a disparity between how much he drove his 1991 Chevrolet pickup and how much he previously had estimated he drove.
“If I hadn’t checked, it would’ve went on and I would’ve kept paying them,” said Clarence Blom, a retired law enforcement officer. “That mileage has a real determining factor in the rate you pay.”
This month, the California Department of Insurance received final approval to require insurance companies to stop using ZIP codes as the primary factor in how much to charge for auto insurance.
Department officials said that under the new regulations, a person’s driving record and miles driven are the top two factors in insurance rates.
A consumer advocate said that means drivers would do well to follow Blom’s example when they get their copy of an insurance policy.
“This is made more important by the new rules that will take effect,” said Douglas Heller, executive director of the Foundation for Taxpayer and Consumer Rights.
Insurance companies have two years to fully implement the new regulations, he said, but one company, the Auto Club of Southern California, already has done so. Others will follow soon, Heller predicted.
He said drivers who recently changed their driving patterns, such as recent retirees or people who took a new job, are most likely to benefit from studying their actual mileage.
“You should call your agent or your insurance company and say you need to be re-rated,” Heller said.
Spokesmen for both AAA and State Farm Insurance said a policyholder who discovers a mileage discrepancy should contact his or her agent and provide proof if possible.
“It’s a good thing to get in touch with an agent on a regular basis,” said Vickie Williamson, a public affairs specialist with State Farm. “You adjust the mileage, and everything else falls into place.”
Blom said his carrier, AAA, reduced his premium to $1,286 for a year for two vehicles after he showed proof of his mileage.
The previous policy estimated he and his wife would drive a total of 7,000 miles on the pickup and a 1998 Lexus. They drove 4,500 miles.
State insurance officials said that under the regulations, the policyholder’s estimate is what determines a mileage figure. Insurance companies can request, but not require, service records to verify mileage.
Tully Lehman, a spokesman with the Insurance Information Network of California, said most insurance companies will be happy to adjust a premium, because fewer miles driven also means less risk for them.
“If you overestimate, you’ll be paying too much,” said Lehman, whose group represents 70 percent of the state’s auto insurers.
* THE ISSUE: New California Department of Insurance regulations make a driving record and the number of miles driven the top two factors in determining insurance rates.
* WHAT IT MEANS: Drivers who see that their policy overstates the number of miles they drive can ask to have their insurance premiums adjusted.
* WHAT’S NEXT: Consumers who see a discrepancy should contact their insurance company. Providing proof, such as a statement that shows mileage from the last few times the vehicle was serviced, will help.