California Commissioner: Data Shows ‘Disturbing’ Disparities in Auto Insurance Discounts

13-percent-increase-in-fatal.jpg

The California Department of Insurance on Tuesday released data from an investigation showing what the CDI is calling “wide socioeconomic disparities” in auto insurance group discounts offered to millions of California drivers.

The CDI says the investigation illustrates that many affinity groups disproportionately and adversely affect drivers residing in ZIP codes with lower per capita incomes, lower levels of educational attainment, and larger communities of color.

Some insurers offer lower automobile premium pricing to certain “affinity groups” including white-collar occupations and highly skilled workers, according to CDI data, which shows that one-quarter of Californians receive an affinity group premium reduction ranging from 1.5% to 25.9% depending on the insurer and group.

California Insurance Commissioner Ricardo Lara called the new data “disturbing” after the first affinity group fact-finding hearing in the CDI’s history last week in Los Angeles.

“This disturbing data confirms what we have heard for years, that auto group discounts do not apply equally across California,” said Insurance Commissioner Ricardo Lara. “We are evaluating whether insurer affinity group discounts violate state laws, and I am prepared to act to ensure all Californians have access to affordable auto insurance regardless of their income, education, or ethnicity.”

Mark Sektnan, vice president for the American Property Casualty Insurance Association, issued the following statement in response to the investigation:

“It must be made clear that affinity groups are created by consumers not insurers. California law only allows for the creation of consumer-initiated affinity groups. Insurers are explicitly prohibited from creating these groups. Over the last 30 years, a wide range of organizations have formed and benefited from affinity groups including labor unions, teachers, small business owners and their employees, law enforcement, among hundreds of others.”

Sektnan in his statement argued that if affinity groups are restricted, millions of California drivers already in these programs could be forced to pay more for auto insurance, but if changes are to be made, more affinity groups should be created to encourage greater access.

Among the findings released by the CDI:

This content was originally published here.

Auto Listings
Motorcycle Listings
Life Listings
Health Listings
Home Listings
Small Business Listings

Leave a Comment





This site uses Akismet to reduce spam. Learn how your comment data is processed.

RECENT POSTS

Kobe Bryant’s Tragic Loss Reminds Us of the Fragility of Life

January 27, 2020

Kobe Bryant’s passing is a terrible tragedy. It’s easy to forget how fragile life is. Unfortunately, we can get caught up in the hustle and bustle. It is not uncommon…

Read More

Home Insurance Premiums: Democratic Candidates Talk Effects of Climate Change

February 11, 2020

Climate Change is a term that hit the scene in 2006 with the release of Al Gore’s “An Inconvenient Truth”. Since then, the topic has been the subject of heated…

Read More

Home Insurance: Climate Change a “Hot” Topic at Final 2019 Debate

January 14, 2020

Climate Change is one of those buzz phrases that we hear all the time. The conversation has been happening for years, but it has been hard to get people on…

Read More

Guide to Open Enrollment: Making Sure You Are Insured for Next Year

December 3, 2019

‘Tis the season! That doesn’t just apply to the holidays, but also to health insurance. You have probably heard the phrase “open enrollment” tossed around either on the news or…

Read More

Life Insurance Needs Assessment: Top 5 Reasons You Need Life Insurance

November 24, 2019

We are all guilty of procrastinating every now and then. Especially when it comes to the somewhat morbid topic of life insurance. We all know that our death is an…

Read More

Health Risks and Insurance Costs of Vaping: Is It Really “Cool to Vape”?

November 14, 2019

For decades, smoking has been advertised as cool, sexy, and trendy. With the invention of the e-cigarette, tobacco companies did not stray from their tried and true marketing strategy. Plus,…

Read More

Evaporated into Thin Air: Unseen Effects of Vaping on Health Insurance

October 31, 2019

Among many of the world’s new inventions, e-cigarettes have become a new craze. A recent article from Reuters reported that roughly 1 in 20 Americans are currently vaping or using…

Read More

Save on Car Insurance: Top 5 Ways to Secure a Cost-Effective Auto Policy

October 17, 2019

We are all trying to save more money, but sometimes there don’t seem to be any areas to cut back. One avenue to explore is ways to save on car…

Read More