LOS ANGELES, Oct. 17, 2018 /PRNewswire/ -- Today the
Consumer Federation of America reports that Proposition 103, the
insurance reform law passed by California voters on November 8, 1988, has saved drivers
$154 billion on their auto insurance, says
Consumer Watchdog. The report also finds that the law
has lowered auto liability premiums in California by 5.7% since 1989, even as
liability premiums increased 58.5% across the rest of the
country.
The Consumer Federation of America credited the savings and
stability of rates to the provisions in Proposition 103 that
require insurance companies to justify and get approval for rate
increases, allow the public to challenge unfair insurance company
practices and excessive rates, and that made the insurance
commissioner an elected post. Californians will elect a new
insurance commissioner next month.
"Three decades ago, California
voters joined together with tens of thousands of small donations to
put Proposition 103 on the ballot and pass it, despite an
unprecedented $63 million campaign of
lies and deception by the insurance industry," said Harvey Rosenfield, the author of Proposition 103
and the founder of Consumer Watchdog. "$154
billion is a 30th birthday gift from Prop
103 to the people of California,
rewarding a battle against insurance company overcharges and abuses
that has been waged every day for the last three decades."
"As voters consider twelve different measures on the ballot next
month that impact everything from housing to the food they eat,
they have $154 billion in proof that
citizen initiatives can change the way consumers are treated and
make the system fairer," said Carmen
Balber, executive director of Consumer Watchdog.
CFA Studies Prop 103 at
30thAnniversary
The Consumer Federation of America (CFA), a national non-profit
research and education organization based in Washington D.C., found that:
- Californians have saved $154
billion, or $6 billion a year,
since 103 took effect in 1989 compared to what premiums would have
been had they followed the national average growth rate.
- Auto insurance liability premiums, excluding comprehensive and
collision coverage, went down 7% in California since 1989; during the same period,
liability premiums went up 58.5% nationwide.
- While the total amount of auto insurance premiums paid by
motorists across the nation rose 61.1% in the same time period, the
premiums paid by California
motorists increased just 12.5% in California since Prop 103 passed.
- Californians spent just $93.48
more on auto insurance in 2015 than they did in 1989; nationwide
drivers spent $352.71 more – nearly
four times as much.
- California has the
2nd most competitive auto insurance market in the
nation.
View the Consumer Federation of America's findings
here: https://consumerfed.org/press_release/30-years-and-154-billion-of-savings-californias-proposition-103-insurance-reforms-still-saving-drivers-money/
Fight for Lower Insurance Premiums
By giving members of the public the ability to monitor the
insurance industry's compliance with the law and challenge unlawful
insurance premiums or abusive practices before the California
Department of Insurance and in the courts, Proposition 103 has
enabled California consumers to
protect themselves against insurance overcharges and unfair
rates. Since 2003, Consumer Watchdog alone has invoked
these procedures to stop $3.3 billion
in unnecessary rate increases on auto, home, renter, small business
and even the professional insurance that doctors have to pay.
The insurance industry has never stopped its attack on
Proposition 103. Its lobbyists have sponsored countless bills in
Sacramento to repeal parts of
Proposition 103, sponsored two ballot initiatives to undo
Proposition 103 protections, and continuously challenged the law in
court. All of these attacks on 103 have been defeated.
The battle continues to this day. There are currently five
proceedings in court and at the Department of Insurance to defend
and enforce Proposition 103.
- State Farm is fighting in San Diego Superior Court to overturn
an order by the Insurance Commissioner that State Farm reduce its
homeowners rate by $150 million and
refund $100 million in
overcharges;
- The insurance industry is also trying to overturn Proposition
103's requirement that insurance companies publicly disclose
financial information to help determine whether rate increases are
justified, and the Prop 103 rules that give the public the ability
to defend 103;
- The Department of Insurance is holding two public inquiries as
to whether Farmers and Allstate are using illegal rating factors to
discriminate against drivers.
Read more about the cases
here: http://www.latimes.com/business/hiltzik/la-fi-hiltzik-state-farm-20180216-story.html
Proposition 103 was passed by California voters on November 8, 1988. Insurance companies filed over
100 lawsuits to block Proposition 103 from taking effect. In
May 1989, the California Supreme
Court unanimously upheld all major provisions of the law. 103
forced insurance companies to pay over $2 billion in refunds for overcharges
between 1987 and 1988.
Proposition 103 requires that auto insurance rates be based
primarily on a driver's safety record, miles driven and driving
experience. It requires all automobile rating factors be approved
by the Department of Insurance and prohibits discriminatory rating
factors including credit score, ZIP Code and race. Prop 103
prohibits excessive, inadequate and unfairly discriminatory auto,
home and business insurance rates and requires insurance companies
to open their books and justify those rates before they are
approved. 103 applied the state's consumer protection, civil rights
and antitrust laws to insurance for the first time. It also created
the funded public participation process to level the playing field
and ensure consumers have the resources to hire the technical
experts – including economists, actuaries, geologists and attorneys
– needed to go up against the insurance industry. In addition to
regulating rates, Proposition 103 made the insurance commissioner's
office an elected position that is accountable to the voters.
Californians will choose a new insurance commissioner this
November.
For more information about Proposition 103
visit: https://www.consumerwatchdog.org/prop-103-california-insurance-reform
Consumer Watchdog is a non-profit, non-partisan citizen
organization.
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SOURCE Consumer Watchdog