PROP. 103 PROVISIONS NULL

A California appeals court ruled Dec. 29 that auto insurers can calculate premiums based on where a customer lives, a ruling that could result in a California Supreme Court showdown. The decision from the First District Court of Appeal nullified provisions of Proposition 103, a 1988 initiative that required insurers to base prices on a driver’s safety record, years of experience and miles driven. The proposition provided for insurers to consider ZIP code as an “optional” factor. The three-judge court agreed that insurers need to give significant weight to a customer’s ZIP code because risk factors affecting the price of a policy vary from area to area. The Foundation for Taxpayer and Consumer Rights, which sponsored Prop. 103, plans to appeal the decision. 21st