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Interested in a convincing explanation as to how the above ruling is consistent with the following section of the California Insurance Code:
1861.05. Approval of Insurance Rates. (a) No rate shall be
approved or remain in effect which is excessive, inadequate, unfairly
discriminatory or otherwise in violation of this chapter. In
considering whether a rate is excessive, inadequate or unfairly
discriminatory, no consideration shall be given to the degree of
competition and the commissioner shall consider whether the rate
mathematically reflects the insurance company’s investment income.
In my view, the court has said that it is okay to charge excessive rates to people with a continuous history of being insured who exercise their choice to shop for a new company.
Basically this new ruling states that those drivers who have been abiding by the law and continuously been paying insurance premiums now get penalized so that those who have been uninsured can get a better price.
If there really are people who can\’t afford insurance, maybe the Low Cost Automobile Insurance Program should be expanded, rather than pass the price increase to responsible drivers.