Call us at 855-735-1600
Home Page Get A Quote Contact Us Newsletter Home Page
  • Home
  • Get A Quote
    • AutomobileImage of right arrow
      • Auto Insurance Quote
      • Los Angeles Car Insurance
    • Business & CommercialImage of right arrow
      • Commercial Auto Insurance Quote
      • Los Angeles Commercial Insurance
    • Dental
    • Flood
    • HomeownersImage of right arrow
      • Homeowners Insurance Quote
      • Los Angeles Home Insurance
    • Life
    • Motorcycle
    • Other
    • Renters
  • Customer Service
    • AutomobileImage of right arrow
      • Request ID Card for Auto Policy
      • Send Declaration and Coverages Information to Lien Holder
    • Homeowners
  • Blog
  • Make a Payment
  • Resources
    • Secure File Area
    • Refer a Friend
    • Important Links
    • Insurance Glossary
    • Frequently Asked Questions
    • News Center
  • About Us
    • About True Rate Insurance
    • Our Locations
    • Employee Directory
    • Privacy Policy
  • Contact
    • Contact Us
    • Join Our Newsletter
Lines of business buttons Auto Home Commercial Life Dental Registration Services International Drivers' License Mexican Insurance Motorcycle Boats Road Side Service
Home > Blog > California Proposition 33, Automobile Insurance Persistency Discounts (2012)
FRIDAY, SEPTEMBER 28, 2012

California Proposition 33, Automobile Insurance Persistency Discounts (2012)

When it comes to pricing insurance, it's best to match risk and reward, and the only way to match risk with reward is by using information about past behavior. Insurance markets fail when that information is not forthcoming. Or when it is deliberately withheld, as it currently is in California, thanks to Proposition 103, passed in 1988. Under California law, drivers who follow the rules and carry car insurance earn a discount after five years of continuous coverage. But if they decide to switch insurance carriers, or drop coverage because of illness or because they were serving in the military, they lose that discount.

Prop. 33 on the Nov. 6 ballot allows consumers to keep their "continuous-driver" discount if they switch insurers. Drivers also would keep a persistency discount if their coverage lapses because of military service or unemployment of at least 18 months.

In a perfect world, insurers would be able to create whatever rating models they wished and would be free to compete for customers. California's Insurance Commission, however, allows insurers to write policies based solely on 18 criteria. Prop. 33 would add another criteria – continuous driver history – and that would likely go a long way to lowering car insurance rates, as has been found in the 48 other states that allow continuous-driver discounts.

The reason a continuous-driver discount winds up reducing, rather than boosting, insurance prices is evident when you consider two hypothetical drivers. The first driver's insurance history is transparent to every insurer, including competitors, while the second driver has no checkable history. Which driver would be riskier for to an insurer?

Read the full story from the Orange County Register.

(Please note the opinions expressed here are from the Orange County Register and are in no way endorsed by True Rate Insurance.)
Posted 2:00 PM

Tags: insurance, proposition 33, auto insurance, california
Share |


No Comments


Post a Comment
Required
Required (Not Displayed)
Required


All comments are moderated and stripped of HTML.

NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2013
  • 2012

  • insurance(22)
  • california(19)
  • los angeles car insurance(15)
  • los angeles(13)
  • auto insurance(6)
  • true rate insurance agency(5)
  • car insurance(5)
  • los angeles auto insurance(4)
  • true rate insurance(3)
  • home insurance(3)
  • california car insurance(3)
  • los angeles insurance(2)
  • teen drivers(2)
  • homeowners(2)
  • california home insurance(2)
  • comprehensive auto insurance(2)
  • true rate auto insurance(1)
  • refer a friend(1)
  • home fires(1)
  • superstorm sandy(1)
  • family(1)
  • auto insurance rates(1)
  • carpooling(1)
  • car share(1)
  • save on los angeles car insurance(1)
  • teen driving violations(1)
  • proof of car insurance(1)
  • brush fires(1)
  • vision insurance(1)
  • car(1)
  • win prizes(1)
  • san francisco(1)
  • auto policy(1)
  • reimbursement(1)
  • referrals(1)
  • ventura county(1)
  • proposition 33(1)
  • preparations(1)
  • leased vehicle(1)
  • california insurance commisioner(1)
  • state minimum requirements(1)
  • los angels.(1)
  • house insurance(1)
  • car shopping(1)
  • sports car insurance(1)
  • teen car insurance(1)
  • contra costa county(1)
  • liability auto insurance(1)
  • fraud(1)
  • older drivers(1)

View Mobile Version
follow us quick links mission statement
Facebook

LinkedIn

Yelp
RSS Feed

Twitter

Google+
Home Page
About Us
Our Services
Newsletter
Get A Quote
Contact Us
"We are dedicated to providing you with the best possible service.
This includes finding you the best quote possible!"
True Rate Insurance | 3 Locations to Serve You: Los Angeles - Bell - Whittier | Ph: 323-735-1600 | CA License#0C26157            Copyright True Rate Insurance 2012
RSS Twitter Facebook LinkedIn Rss Feed Twitter Google+ Facebook LinkedIn Yelp