Territorial Rating Battle Still Raging on Political Front

Insurance associations are up in arms again over the recent request of lawmakers that the California Supreme Court review the use of ZIP codes in rating auto policies. The Personal Insurance Federation of California, American Agents Alliance and others are on the defense against what they see as a renewed attack by Harvey Rosenfield and the Foundation for Taxpayer and Consumer Rights, who are attempting to do away with territorial rating.

Senator Jackie Speier has also joined the petition. “If territorial rating is banned, the hardening market we’ve been watching slowly approach will slam down on us like a guillotine blade,” opined a recent Alliance newsletter. Insurers say changing the rating factors will result in dramatic rate increases for good drivers in 51 of California’s 58 counties.

Jerry Davies, director of communications for PIFC, said: “It is unfair for those who can least afford to have their auto rates increased, meaning the rural poor, to have to subsidize the wealthy who live in Santa Monica, where the head of the Taxpayers Foundation lives, and Beverly Hills or on Nob Hill in San Francisco. If the Taxpayers Foundation and Senator Speier have their way, that’s exactly what would happen.”

Commissioner Harry Low has asked the court not to review the regulations, but he reportedly remains undecided about whether he’ll make changes to the law if the courts uphold it.