Garamendi Calls For Auto Insurance Changes to End "ZIP Code" Rates
The days of California drivers paying wildly different car insurance rates based solely on where they live may soon become a thing of the past.
California insurance commissioner John Garamendi called for new regulations Thursday that would require insurers base their auto rates primarily on a driver's driving record, not on the ZIP code in which the driver resides. Currently, drivers can be charged from $500 to $1,000 more per year for living in mostly urban areas of California, where instances of auto accidents and thefts are higher, according to a non-profit Consumer Union report.
"A good driver wherever they are in the state of California ought to have a lower rate than a bad driver, whereever that person is in the state," Garamendi said.
Garamendi said the changes will help bring California auto rates more in line with the wishes of state voters as outlined in Proposition 103. Passed in 1988, the proposition imposed a 20 percent reduction in auto insurance rates and established strict insurance rate regulations while repealing the industry's protection from antitrust laws.
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