Auto Insurance Companies Comply

Twenty years ago, the landmark 1988 insurance reform initiative Proposition 103 was passed in the state of California. Now, auto insurance companies have to prove that they have been following the letter of the law, and have been complying with it. They have until end of business today to do so, or they will be facing some real consequences.

Auto insurance companies have to set their customers’ premiums based on how they drive instead of where they live. The proposition said that instead of setting them based on their zip codes, they have to set them on their driving habits – such as how they drive and how much they drive.

There were many drivers that were paying more for their auto insurance rates simply because of where they lived – meanwhile they had excellent driving records. Someone with a lesser driving record, but living in a better zip code could possibly pay less than them simply because of their location.

Harvey Rosenfield was the author and driving force behind the proposition and he was glad to see that the auto insurance companies had finally fallen to the new law. He says that he never felt that it was right the way that residents were being treated, and the “defiance” of the auto insurance industry had finally come to an end.

The new proposition will save those that have auto insurance millions of dollars a year overall, so it is more than worth it.




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