Californians for Fair Auto Insurance Rates (CalFAIR), a coalition of consumer advocates, businesses, senior organizations, taxpayer advocates and insurers, announced last week that the California Secretary of State has certified the “Continuous Coverage Auto Insurance Discount Act,” so that it will appear on the ballot for the June 8, 2010 Primary Election. The measure will allow auto insurance companies to give discounts to customers who have maintained continuous insurance coverage. It required 433,971 valid signatures in order to qualify for the ballot, and CalFAIR submitted 726,199. The group has been pushing for auto insurance reform of this kind.
Current California auto insurance law does allow loyalty discounts to be given to customers who maintain continuous car insurance coverage with the same company, but if they transfer to a different company, they cannot take their discount with them. If the Continuous Coverage Auto Insurance Discount Act is passed in the June election, drivers would be able to take their discount with them while changing carriers, as long as there is no lapse in coverage.
Like the good driver discount already available to California motorists with clean driving records, this ballot measure would reward more than 80% of drivers who maintain their legally-required minimum coverage. It is felt that making the continuous coverage discount portable will give people access to more insurance options, as well as sparking increased competition for insurance business, and the possibility of lower rates and lower premiums.
Organizations endorsing the measure include: Consumers First, Consumers Coalition of California, Citizens Against Regulatory Excess, California Chamber of Commerce, Small Business Action Committee, League of United Latin American Citizens, and the California Taxpayer Protection Committee, among others.
In a statement to the press on January 20th, Jim Conran, co-chair of the Coalition, president of Consumers First, and former director of the California Department of Consumer affairs, said, “We are pleased that the Continuous Coverage Auto Insurance Discount Act has qualified for the June ballot. California consumers will be happy to know that by voting for this measure, they will be eligible to take their continuous coverage discount with them if they decide to change insurance carrier. The current inconsistency in the law prevents insurance companies from extending the continuous coverage discount to new customers and punishes good drivers who want to change insurers. That will change when this measure is passed and will provide consumers the opportunity to shop around for more savings and with more options.”
Even if the measure passes, insurance companies will still be required to base their rates primarily on each driver’s safety record, annual mileage, and driving experience. Other discounts normally given, such as good driver or student driver discounts, will be treated as they already are.
It is estimated that roughly 82% of Californians maintain continuous insurance coverage.