Los Angeles Daily News
I gagged on my coffee Wednesday morning as I scanned the pile of bills I had been ignoring. My auto insurance carrier, Woodland Hills-based 21st Century, had sent the usual biannual renewal notice. But for some reason, my rate had doubled.
Normally, my rate goes down a few bucks every year as my car depreciates and I get closer to being an old-lady driver. I hadn’t had any change in address or speeding ticket since the last bill. Perhaps, I reasoned, the company had simply decided to save paper by sending annual bills.
Nope. This was my bill for six months and it wasn’t a mistake, I found out after an odyssey through voice trees, unhelpful customer service people and, finally, someone who explained that a new insurance regulation this year is sure to produce dramatic changes in insurance bills all over the state. And chances are I’m not the only one choking in surprise this month over whopping auto insurance bills.
The seeds of my bad Wednesday were planted a long time ago, in the ’80s, when Californians voted for Proposition 103. This state measure reined in out-of-control home, auto and business insurance premiums.
There’s a provision of Prop. 103 that’s responsible for a serious change in insurance pricing that’s already being felt by California consumers. Doug Heller of the Foundation for Taxpayer and Consumer Rights, whose founder, Harvey Rosenfeld, wrote Prop. 103, explained that last year former Insurance Commissioner John Garamendi issued a regulation forcing auto insurers to stop jacking up rates in certain neighborhoods — redlining — and base rates only on driving records.
Because of redlining, residents of certain ZIP codes — such as those in Van Nuys, East L.A and South L.A. — have historically paid higher rates for the same insurance package as those in ritzier communities, even if they were good drivers.
That’s good news for good drivers in Van Nuys and South L.A. who will see their premiums go down substantially. But it’s going to be an unpleasant discovery for anyone with a speeding ticket or a recent accident, especially if they live in neighborhoods that have been subsidized by redlined drivers, such as Thousand Oaks.
“They will find shocking rates if they are bad drivers,” Heller said.
Ultimately, it’s a fair realignment of the insurance rates. Crappy drivers should pay more than non-crappy ones. And one day I will be very happy about this change since I live in 90026, one of the traditionally redlined Los Angeles ZIP codes.
But first I have to suffer through a year of hell while the auto insurance industry soaks me while it still can. You see, I am a “bad driver.”
This classification sticks to me like a bad dye job due to a fender-bender two years ago. At the time I considered the accident fairly minor because: 1) the CHP wouldn’t take an accident report; 2) while the impact buckled my hood, the car I rear-ended escaped with a dented fender; and 3) my air bag didn’t even deploy.
I assumed my insurance company paid $500 or so to pay for the fender because my rates only went up slightly. Yet I found out Wednesday that insurance company settled this little incident (my buckled hood, incidently, was fixed for less than $300) for $8,000, clearly without anyone investigating the veracity of the claims.
Now I have a two-point accident on my record. That means I can either pay $2,500 this year for the pleasure of having basic insurance coverage — or I can ride the bus. There’s always the third option of joining the ranks of uninsured drivers, which I am seriously considering. This whole thing would have been a lot less expensive if I had slipped a couple of grand to the person I hit right on the spot.
Of course, none of this was explained to me by the impervious customer service people at 21st Century who merely said some new law required my rates to go up. And don’t expect your company to be forthcoming, either. Why? Because this whole thing wasn’t their idea. Redlining might be morally repugnant, but it’s profitable.
The moral of this story is that sometimes good things are bad for a little while. Or that bad things are good, if they don’t happen to you.
Or just that everyone should always have a camera in their car because the insurance company you’ve been loyally paying thousands to for a decade isn’t really on your side and, whatever you do, don’t hit anything.
Mariel Garza is a columnist and editorial writer for the Los Angeles Daily News. Write to her by e-mail at [email protected]