Alliance Looking for Broker/Agent Responses to Low Cost Auto Survey

With the California Low Cost Automobile Insurance program developing into a major issue this year, both in the Legislature and at the Department of Insurance, the American Agents Alliance is interested in finding out what producers have to say on the issue. Toward that end, the Alliance has posted a producer survey on their Web site at www.agentsalliance.com. The survey consists of 13 questions about Low Cost Auto customers and what is involved in selling this coverage.

“Since the Low Cost Auto program became operational in 2003, the Department of Insurance and the Legislature, especially the authors of the legislation that enacted the program, have both kept a sharp eye on how it has progressed, and neither seem to be very pleased with the results thus far,” said Alliance Executive Director Lorelle Kitzmiller. “Last year, the CDI launched a marketing campaign for Low Cost Auto in Los Angeles and San Francisco, which apparently did not boost policy figures as much as they were hoping. Now, some are accusing producers of deliberately ignoring the program. We want to find out if producers are selling Low Cost Auto and, if not, then why not.”

Those completing the Alliance survey, which is also available via e-mail request at memberinfo@agentsalliance.com, can remain anonymous. The goal of the Alliance is not to “out” any producers refusing to sell the coverage, but to put together a report illustrating the frustrations of some agents, especially in the areas of required paperwork and low commissions. The association plans to present their findings to Insurance Commissioner John Garamendi, as well as to members of the Legislature.

“The Alliance believes the Low Cost Auto program provides an affordable way for lower income drivers to comply with California’s mandatory insurance laws without breaking their budgets. However, we also feel that the application process could be streamlined and the commission could be brought more in line with a producer’s cost of doing business,” said Kitzmiller. “There’s only one way to find out what reluctance, if any, producers have to selling the Low Cost Auto coverage, and that’s to ask producers directly.”

Topics Trends Auto Agencies