Governor signs insurance package;

Published on

Three of state Sen. Martha Escutia’s bills dealing with insurance coverage have been signed into law

Whittier Daily News (California)

Gov. Arnold Schwarzenegger has signed three of state Sen. Martha Escutia bills dealing with insurance, including her legislation to continue a low-cost auto insurance program through 2011.

Schwarzenegger also signed Escutia’s SB 150, which requires insurance companies to provide consumers with a written specific reason for declining or cancelling insurance. And he signed her SB 608, which provides consumers more representation before the state Public Utilities Commission.

"We’re very happy that the consumer protection bills that Sen. Escutia [D-Norwalk] has authored have been signed into law," said Suzanne Weirbinski, Escutia’s chief of staff.

"We now not only will continue to help low-income people to be able to afford auto insurance, but the consumers who battle the high electricity rates now have more protection," she said. "And if your insurance policy is canceled, you will be told immediately why and not left to figure it out."

SB 20, the low-cost auto insurance bill, extends the expiration date of the program for another four years and expands it to six other counties, including Alameda, Fresno, Orange, Riverside, San Bernardino and San Diego. The program was first established in 1999 in Los Angeles and San Francisco counties.

The program is needed because California law now makes car insurance mandatory, Escutia said. On Jan. 1, 2006, the state Department of Motor Vehicles will begin requiring electronic proof of insurance from insurers. It also will begin suspending the registrations of vehicles with 45 days of advance notice when coverage lapses and is not replaced.

The current annual premium for the liability-only insurance in San Francisco is $314 and $347 in Los Angeles. Only low- income residents qualify. Still, the program remains controversial, although the legislation wasn’t.

"At the end of the day, we withdrew our opposition, but we still believe more information is needed about the low- cost program before it should be expanded statewide," said Samuel Sorich, president of the Association of California Insurance Companies.

About 20,000 policies have been written, but there are more than 100,000 uninsured drivers in Los Angeles County alone, officials say.

"Given the potential number of people who could purchase the policy, the number of people who actually purchase it seems to be low," Sorich said.

Doug Heller, executive director of the Foundation for Taxpayer and Consumer
Rights, said that by encouraging more people to purchase insurance, the program already is saving consumers money.

"It’s less likely that we’ll be hit by uninsured drivers," Heller said. "It means the cost of insurance will go down as more people get insured."

There was more disagreement on SB 150, the bill making insurance companies provide a written reason for declining or cancelling an insurance policy.

"This bill pro-actively adds a line of protection for call California homeowners who are unfairly denied or canceled coverage without any reasons," Escutia said.

But Sorich, whose organization asked Schwarzenegger to veto the bill, said the legislation will add extra paper work for insurance companies and isn’t needed.

"For most consumers, this is probably information they don’t really want or need," he said.
Mike Sprague can be reached at [562] 698-0955, Ext. 3022, or by e-mail at
[email protected]

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.

Latest Videos

Latest Releases

In The News

Latest Report

Support Consumer Watchdog

Subscribe to our newsletter

To be updated with all the latest news, press releases and special reports.

More Releases