Great service! Low prices!
Shannon S.
South Chicago Heights, IL
By Dean Calbreath, The San Diego Union-Tribune
Mar. 20--Two of the state's biggest auto insurance companies have reduced their charges to customers under provisions of Proposition 103, a voter initiative that turns 20 years old this year.
On Friday, the Auto Club of Southern California -- the state's fourth-biggest auto insurer -- settled a Proposition 103-related lawsuit with a pledge to issue $22.5 million in refunds to about 120,000 customers.
On the same day, the Insurance Department, under Proposition 103, ordered Allstate Insurance Co. -- the state's fifth-largest auto insurer -- to lower its auto premiums by 15.9 percent. The proposed rate change would roll back payments for Allstate customers by about $120 per vehicle annually, totaling about $250 million statewide.
The Foundation for Taxpayer and Consumer Rights in Santa Monica, which crafted Proposition 103, praised the two actions.
"After 20 years, Prop. 103 is still paying dividends to consumers, whether it's protection against unfair surcharges or against broad-based price gouging," said Doug Heller, a foundation spokesman.
California voters passed Proposition 103 on Nov. 8, 1988, requiring most insurers to get approval from the Department of Insurance for rate changes. Before its passage, only health and life insurers needed such approval.
State Insurance Commissioner Steve Poizner used his powers under Proposition 103 to determine that Allstate had set its insurance rates too high, requiring a sharp reduction.
Allstate spokesman Peter DeMarco said the company wanted to reduce rates but believed that the 15.9 percent cut was not fair compared with the rates of its rivals.
"We are reviewing the details of the commissioner's announcement and will continue to explore our options going forward," DeMarco said.
The Auto Club settled a suit filed by the consumer rights foundation, which charged that the company added improper fees when insuring drivers who could not show proof of prior insurance when they applied for coverage.
Steve Lenzi, senior vice president at the Auto Club, said the company believed that its practices -- which former Insurance Commissioner Chuck Quackenbush approved -- did not violate Proposition 103. He said the company settled to avoid costly litigation.
-----
To see more of The San Diego Union-Tribune, or to subscribe to the newspaper, go to http://www.uniontrib.com.
Copyright (c) 2008, The San Diego Union-Tribune
Distributed by McClatchy-Tribune Information Services.
For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
ALL,
Car Insurance News: Auto Insurers' Rate Cuts a Result of Prop. 103...Get an auto insurance quote!