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Assemblywoman Patty Berg, D-Eureka, and a group of rural-area lawmakers are urging Insurance Commissioner John Garamendi to drop plans that could raise auto insurance rates for North Coast residents while lowering them in the Bay Area and Los Angeles.
Garamendi is proposing a rate-setting policy that would prevent insurers from charging more in urban areas and less in rural areas. Supporters of that policy say it creates a level playing field. Opponents of the plan, including Berg, say it unfairly saddles motorists in rural areas with the cost of covering drivers on crowded city streets.
Lawmakers sent Garamendi a letter that says they are “surprised to hear you are again pursuing these changes despite the fact that they will have a significant and unfair economic impact on our constituents.”
During previous attempts to change rate-setting policy, experts estimated that drivers in Del Norte, Humboldt, Lake, Mendocino, Sonoma, and Trinity Counties could see rates increase up to 25 percent while some drivers in Los Angeles County would see rates drop as much as 40 percent. Garamendi's office, however, says such projections are premature and may not reflect the reality of the proposed changes.
”The bottom line,” said Berg, “is we have to have a system that reflects reality. And the reality is it costs less to ensure someone up here than it does in the Bay Area or Southern California.”
Norman Williams from the California Department of Insurance said the proposal -- as put forth by Garamendi -- is meant only to enforce the will of the voters as enacted by Proposition 103.
The reforms would make it so three factors would rank most highly in determining rates -- the insured's driving safety record, number of miles driven annually by the insured and number of years of driving experience the insured has had.
They won't eliminate ZIP codes as a factor, but only that they are considered less than the three mandatory elements.
”ZIP codes can still play a very significant role in setting prices,” he said.
Local Republican Party stalwart and insurance agent Mike Harvey said he was pleased to see Berg take the issue up.
”It's nice to see that Patty -- along with the majority of Republicans in the Assembly -- stepped up to the plate to fight this election-year legislation that Garamendi is proposing,” he said.
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