Insurance rates for vehicles discussed

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Residents at a Fresno hearing voice concerns about increases.

Fresno Bee (California)

Ask someone who moved from a downtown Fresno neighborhood to northwest Fresno what they would do with $368.

That’s the difference in price for auto insurance for two women the same age with identical driving records.

It’s also something state Insurance Commissioner John Garamendi promised to change during testimony Tuesday night at California State University, Fresno. The hearing was the last of seven held throughout California since December.

At issue is a petition on Garamendi’s desk calling for a change in the structure of insurance rates proposed by a coalition of groups representing the cities of Los Angeles, Oakland and San Francisco, as well a cross section of ethnic, religious and consumer rights organizations.

They claim the method used in assigning auto insurance rates to California drivers is out of whack — where people living across the street from each other could be charged wildly varying rates because their ZIP codes are different.

It was what Proposition 103, approved by voters in 1988, was designed to defend against, said Douglas Heller of the Santa Monica-based Foundation for Taxpayers and Consumer Rights.

“It’s a rude joke on California voters,” he said. “How well you drive should come first.”

The other two factors that were supposed to have the greatest weight were the number of miles annually driven and years of driving experience, he said.

When former Insurance Commissioner Charles Quackenbush was in office, Heller said, a “scheme” was developed to skirt that system.

Instead, he said, marital status/gender and ZIP codes have been given the greatest weight.

“You are being hit because you don’t live in a nice ZIP code and you’re being hit because you’re not married,” Heller said.

But Valley leaders said they are concerned rates for their constituents will rise and rates in the state’s major cities will fall.

In Coalinga, City Manager Richard Warne said auto insurance rates would rise 11% if one of the proposals backed by the consumer groups was approved.

“If you lower the rates in L.A., Hollywood and San Francisco, then you will have higher rates in the San Joaquin Valley,” Warne said.

Russell Johnson, who represents state Sen. Roy Ashburn, R-Bakersfield, said cities throughout his district will see increases of 7% and higher.

Susan Good, representing Sen. Dean Florez, D-Shafter, said the consumer groups’ proposal will raise auto insurance rates in 52 of 58 counties.

Stuck somewhere in between is Gracie Sanchez, a 42-year-old married mother of three from Parlier who supports neither side.

A school district employee, Sanchez had to shell out $400 to renew her insurance because she had been driving without it.

“If you can’t afford it, you can’t afford it,” she said. “If I have to choose, I will choose feeding my family and putting a roof over their heads.”

Garamendi said he has made no decision about a formula he supports but accused the state’s insurance industry of employing scare tactics to get cities and counties to lobby against any changes in the rate structure.

Garamendi said his office will begin analyzing the public comments and data next week. “This system is unfair,” he said. “You ask the industry or others why it happens and they shrug their shoulders. … The insurance industry says this will raise rates throughout California. That is a lie.”
The reporter can be reached at [email protected] or 441-6166.

Consumer Watchdog
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