Cal-FAIR Responds to Opposition of the Continuous Coverage Auto Insurance Discount Act

SACRAMENTO, Calif., Jan 20 /PRNewswire/ -- Californians for Fair Auto Insurance Rates, a coalition of consumer advocates, businesses, taxpayer advocates and insurers, issued the following statement today in response to opponents' conference call news conference opposing the Continuous Coverage Auto Discount Act which will be on the June 2010 ballot. The statement below can be attributed to Kathy Fairbanks, spokesperson for Californians for Fair Auto Insurance Rates.

"Contrary to what opponents have said about the measure, the fact is that the Continuous Coverage Auto Insurance Discount Act will encourage competition and choice in the auto insurance marketplace. It will save consumers money on their auto policies, and it will reward the more than 80% of responsible California drivers who maintain auto insurance as required by law.

"Today, those drivers are penalized. Current law restricts drivers from going to other insurers to shop for lower prices because they can't take the continuous coverage discount with them.

"Our measure instead rewards responsible drivers by extending the already-existing, continuous coverage discount so that California drivers who continually maintain auto insurance qualify for the discount even if they switch insurance companies.

"Opponents' objection to a measure that will benefit more than 80% of California consumers is baffling and unequivocally anti-consumer. And attempts to compare our California-specific measure to a fictional example in Nevada is a misleading and lame attempt to make a connection where none exists.

"California's regulatory and rate-setting environment is completely different from Nevada's or any other state's. In fact, current California law mandates that your driving safety record, miles driven annually and years of driving experience be the top three factors in determining auto insurance premiums. Nevada has no such requirements.

"Comparing California to Nevada is like comparing apples to oranges.

"The Continuous Coverage Auto Insurance Discount Act will mean more competitive auto insurance rates, more choice for consumers and lower auto insurance premiums. That's why it's endorsed by groups like Consumers First, Consumers Coalition of California, Citizens Against Regulatory Excess, California Chamber of Commerce, Small Business Action Committee, League of United Latin American Citizens, California Taxpayer Protection Committee and many more.

"At a time when California's economy is slow to recover and voters are pessimistic about the future, providing an additional discount to lower auto insurance for more than 80% of drivers is a change that should be made and one we believe will be strongly favored by voters."

Background:

Under current law, insurance companies are allowed to offer a discount to their customers who maintain continuous coverage. However, an inconsistency in the law prohibits drivers from being allowed to take their continuous coverage discount with them if they change insurance carriers. The Continuous Coverage Auto Insurance Discount Act will fix this inconsistency and make the already-existing discount portable even if motorists change insurance companies. In doing so, it will reward responsible drivers who maintain auto insurance as required by law, and promote competition and lower rates by encouraging consumers to shop around when purchasing insurance.

The vast majority of California drivers (82%) maintain insurance and should be rewarded for keeping their insurance current.  Extending this discount will bring California up to speed with the vast majority of other states that already offer it.

Insurance companies still will be required to base a driver's auto insurance rates primarily on their driving safety record, miles driven annually and driving experience. Other discounts, like the good driver or student discount, will not be taken away.

More than 700,000 signatures to qualify the measure were submitted to county registrars in December. Signature verification is nearly complete and the initiative could qualify for the ballot any day.

SOURCE Californians for Fair Auto Insurance Rates

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