Don\’t worry folks. It is not likely any insurers will withdraw. They have had plenty of time to plan the end of ZIP risk grouping. They have surely developed much more finely detailed data from recent population density maps to replace the coarser ZIP divisions.
It is clear that the industry cannot ignore density-related risks. This gives insurers a fine opportunity to replace ZIPs with an even more accurate population density model. So everyone can proclaim, NO MORE ZIP RATING!!, and technically be right.
I think it might be a wise investment to buy stock in firms mapping population density. Then sit back, get rich and watch Prop 103 fans Cheshire grins over their victory fade into stunned pouts when they realize they got exactly what they bargained for; essentially micro-subdivided ZIP codes.
Otherwise, I will be amazed to see their attempt at class warfare work out the way the pro-103 folks envisioned; where drivers in quiet little towns pay exactly what urban LA & SF drivers pay for the same car, mileage and driving experience. It will be very interesting to see the new rating plans filed.
California is not Massachusetts and carriers won\’t withdraw, some cannot because they only write in CA. Besides, shoting oneself in the foot is an insurance industry specialty.
It\’s not the industry that\’s shooting itself in the foot, it\’s our delightful commish!! I will be happy to send my rate increases to Quackamendi personally so he can pay the difference caused by his ineptitude.
If you were around in 1988 when the law was changed, you will remember how much hype was associated with Harvey Greenberg. What happened afterward was that most everyone\’s premium went UP because the carriers were following the law that the people voted for.
Unfortunately its not a law of the people in this state. It\’s the 5 communist counties that passed it 51.2% to 48.8% in 1988 that are going to benefit. The rest of us get to pay for their selfishness and stupidity. They take our water, live in earthquake and fire prone areas and expect all of the smart people to bale them out!
I almost forgot. They also have a higher risk of loss not only due to traffic but a marked difference in the cost of repair, medical and living in general!
If population density with its attending social and crime issues is not related to increased risk, when was the last time you critics of territorial rating of any kind left your Escalade or BMW parked overnight in an unprotected spot and expected it to be there as you left it in the morning?
Also, the urban residents drive at the same time as all the commuter and entertainment traffic congestion that comes into their area. They all have to deal with far more cars per square mile of pavement and parking that in lower population areas. In reality, commuters and entertainment fans are on the urban streets for a relatively short time, park and leave. Compare that to urban residents doing most of their driving in those areas. Then overlay that with the premiums paid by the urban areas versus the claims dollars paid out there. As they say…money talks.
To say that most or all of the urban risk (collision AND comprehensive loss) is caused by non-resident commuters and concert/sports attendees is at best faulty logic, and at worst a self-serving urbanite talking.
It\’s seems a bit odd that AAA, who was the first carrier to annouce it would comply with the new rating regulations promulgated by the commissioners office, announced that roughly 85% of thier drivers would see a reduction and the other 15% would experience an average 5% increase in their rates.
To develop rates based on population density would be as inaccurate as Zip codes. It does not take a rocket scientist to figure out that you will have more accidents where there is more traffic and more traffic congestion. When you examine where and why the congestion, it is mostly commuter traffic by people who don\’t live where most of the traffic congestion occurs.
When there is a concert at the Hollywood bowl or a game at Staples center, look at all the traffic. Most of that traffic isn\’t from people who live near the Hollywood bowl or Staples center but rather people living elsewhere driving to these events. The same occurs every weekday as people convege on downtown LA and other business/office zones.
Insurers have too long gotten away with using driver resident Zip codes which in reality have very little relationship to where auto accidents occur. The insurance industry regretably is always very slow to change and will argue and fight to the end to maintain the status quo. When change does finally occur, they always find a way to still make a buck or two.
It\’s seems a bit odd that AAA, who was the first carrier to annouce it would comply with the new rating regulations promulgated by the commissioners office, announced that roughly 85% of thier drivers would see a reduction and the other 15% would experience an average 5% increase in their rates.
To develop rates based on population density would be as inaccurate as Zip codes. It does not take a rocket scientist to figure out that you will have more accidents where there is more traffic and more traffic congestion. When you examine where and why the congestion, it is mostly commuter traffic by people who don\’t live where most of the traffic congestion occurs.
When there is a concert at the Hollywood bowl or a game at Staples center, look at all the traffic. Most of that traffic isn\’t from people who live near the Hollywood bowl or Staples center but rather people living elsewhere driving to these events. The same occurs every weekday as people convege on downtown LA and other business/office zones.
Insurers have too long gotten away with using driver resident Zip codes which in reality have very little relationship to where auto accidents occur. The insurance industry regretably is always very slow to change and will argue and fight to the end to maintain the status quo. When change does finally occur, they always find a way to still make a buck or two.
You are right about the fact that a majority of Californians were duped into shooting themselves in the wallet. you howver, forgot to remind folks that Harvey Rosenfeld bought their votes with the false promise of a rebate of 20% of their insurance bills (One of the most amzing things about this vote was that more than 48% of the voters turned down the inherent bribe). What they were left with is a hgihly political and huge bureaucracy that assured industry profit levels that have averaged almost twice what they were in the years before prop 103. Now many in suburban and rural California will be given the privilege of helping out their urban brothers and sisters by by subsidizing the cost of insurance in much higher cost areas. The sad thing is that as a result of how prop 103cwas crafted their is virtually nothing the legislature can do to fix things. Their only choice remains is to elect a Commissioner who will prevent the automobile insurance market from becoming a highly subsidized mess or go back to the ballot box and force a return to a more openly competitve world where consumers had the athority to keep rates and profits in line by their decisions. companies always have and always will respond more quickly and directly to consumers than regulators. California continues to take the power out of the hands of consumers by transferring more of it ambitious politicians
Don\’t worry folks. It is not likely any insurers will withdraw. They have had plenty of time to plan the end of ZIP risk grouping. They have surely developed much more finely detailed data from recent population density maps to replace the coarser ZIP divisions.
It is clear that the industry cannot ignore density-related risks. This gives insurers a fine opportunity to replace ZIPs with an even more accurate population density model. So everyone can proclaim, NO MORE ZIP RATING!!, and technically be right.
I think it might be a wise investment to buy stock in firms mapping population density. Then sit back, get rich and watch Prop 103 fans Cheshire grins over their victory fade into stunned pouts when they realize they got exactly what they bargained for; essentially micro-subdivided ZIP codes.
Otherwise, I will be amazed to see their attempt at class warfare work out the way the pro-103 folks envisioned; where drivers in quiet little towns pay exactly what urban LA & SF drivers pay for the same car, mileage and driving experience. It will be very interesting to see the new rating plans filed.
Is this unrealistic ruling going to cause carriers to withdraw from CA?
California is not Massachusetts and carriers won\’t withdraw, some cannot because they only write in CA. Besides, shoting oneself in the foot is an insurance industry specialty.
It\’s not the industry that\’s shooting itself in the foot, it\’s our delightful commish!! I will be happy to send my rate increases to Quackamendi personally so he can pay the difference caused by his ineptitude.
It\’s funny how people like to blame our officials for enforcing a law that we (the people) voted for. I guess ignorance is bliss.
If you were around in 1988 when the law was changed, you will remember how much hype was associated with Harvey Greenberg. What happened afterward was that most everyone\’s premium went UP because the carriers were following the law that the people voted for.
Unfortunately its not a law of the people in this state. It\’s the 5 communist counties that passed it 51.2% to 48.8% in 1988 that are going to benefit. The rest of us get to pay for their selfishness and stupidity. They take our water, live in earthquake and fire prone areas and expect all of the smart people to bale them out!
I almost forgot. They also have a higher risk of loss not only due to traffic but a marked difference in the cost of repair, medical and living in general!
If population density with its attending social and crime issues is not related to increased risk, when was the last time you critics of territorial rating of any kind left your Escalade or BMW parked overnight in an unprotected spot and expected it to be there as you left it in the morning?
Also, the urban residents drive at the same time as all the commuter and entertainment traffic congestion that comes into their area. They all have to deal with far more cars per square mile of pavement and parking that in lower population areas. In reality, commuters and entertainment fans are on the urban streets for a relatively short time, park and leave. Compare that to urban residents doing most of their driving in those areas. Then overlay that with the premiums paid by the urban areas versus the claims dollars paid out there. As they say…money talks.
To say that most or all of the urban risk (collision AND comprehensive loss) is caused by non-resident commuters and concert/sports attendees is at best faulty logic, and at worst a self-serving urbanite talking.
It\’s seems a bit odd that AAA, who was the first carrier to annouce it would comply with the new rating regulations promulgated by the commissioners office, announced that roughly 85% of thier drivers would see a reduction and the other 15% would experience an average 5% increase in their rates.
To develop rates based on population density would be as inaccurate as Zip codes. It does not take a rocket scientist to figure out that you will have more accidents where there is more traffic and more traffic congestion. When you examine where and why the congestion, it is mostly commuter traffic by people who don\’t live where most of the traffic congestion occurs.
When there is a concert at the Hollywood bowl or a game at Staples center, look at all the traffic. Most of that traffic isn\’t from people who live near the Hollywood bowl or Staples center but rather people living elsewhere driving to these events. The same occurs every weekday as people convege on downtown LA and other business/office zones.
Insurers have too long gotten away with using driver resident Zip codes which in reality have very little relationship to where auto accidents occur. The insurance industry regretably is always very slow to change and will argue and fight to the end to maintain the status quo. When change does finally occur, they always find a way to still make a buck or two.
It\’s seems a bit odd that AAA, who was the first carrier to annouce it would comply with the new rating regulations promulgated by the commissioners office, announced that roughly 85% of thier drivers would see a reduction and the other 15% would experience an average 5% increase in their rates.
To develop rates based on population density would be as inaccurate as Zip codes. It does not take a rocket scientist to figure out that you will have more accidents where there is more traffic and more traffic congestion. When you examine where and why the congestion, it is mostly commuter traffic by people who don\’t live where most of the traffic congestion occurs.
When there is a concert at the Hollywood bowl or a game at Staples center, look at all the traffic. Most of that traffic isn\’t from people who live near the Hollywood bowl or Staples center but rather people living elsewhere driving to these events. The same occurs every weekday as people convege on downtown LA and other business/office zones.
Insurers have too long gotten away with using driver resident Zip codes which in reality have very little relationship to where auto accidents occur. The insurance industry regretably is always very slow to change and will argue and fight to the end to maintain the status quo. When change does finally occur, they always find a way to still make a buck or two.
You are right about the fact that a majority of Californians were duped into shooting themselves in the wallet. you howver, forgot to remind folks that Harvey Rosenfeld bought their votes with the false promise of a rebate of 20% of their insurance bills (One of the most amzing things about this vote was that more than 48% of the voters turned down the inherent bribe). What they were left with is a hgihly political and huge bureaucracy that assured industry profit levels that have averaged almost twice what they were in the years before prop 103. Now many in suburban and rural California will be given the privilege of helping out their urban brothers and sisters by by subsidizing the cost of insurance in much higher cost areas. The sad thing is that as a result of how prop 103cwas crafted their is virtually nothing the legislature can do to fix things. Their only choice remains is to elect a Commissioner who will prevent the automobile insurance market from becoming a highly subsidized mess or go back to the ballot box and force a return to a more openly competitve world where consumers had the athority to keep rates and profits in line by their decisions. companies always have and always will respond more quickly and directly to consumers than regulators. California continues to take the power out of the hands of consumers by transferring more of it ambitious politicians