California Insurance Officials under Fire for Weak Rules


Consumer advocates and environmental groups are criticizing how California Auto Insurance Commissioner Steve Poizner is handling the implementation of insurance laws in the great state. According to critics, Poizner has failed to fully implement some provisions voted on by car owners more than two decades ago.

California Insurance Officials under Fire for Weak RulesDespite news that the state would soon adopt a “pay-as-you-drive” policy to give policyholders more chance to save money from their insurance, some analysts say that California is wasting precious time. They contend that while the kinds of vehicles being driven in the state have changed a great deal since the 1960s, how Californians pay for insurance have remained virtually unchanged.

Consumer rights groups say that voters chose unanimously to pass Proposition 103, dictating how insurance providers would should come up with premiums. The provision placed importance on driving records as the primary basis for insurance rates. It also required providers to make use of the number of miles driven by a motorist each year as a secondary basis. Critics, however, are point out that even with the introduction of a pay-as-you-drive option, the state has failed to place emphasis on miles-based insurance in the past.

Experts say that while insurers are suppose to prioritize the number of miles driven each year by their policyholders, many companies still ignore existing legislation. Worse, some contend, California’s insurance officials have done almost nothing to ensure that the providers comply with the rules set by the state government. Many critic explain that if there had been a better and more effective implementation of the rules, then Californians would be paying less for insurance and helping reduce the effects of global warming.

Calls for a pay-as-you-drive policy have increased in recent years, thanks in part to environmental awareness and the dire global economic outlook. However, some analysts add that Poizner has actually left the implementation phase of the policy to the insurance industry. They add that because the insurers are left to decide how to come up with rates, there is no verifiable way to know if the premiums many Californians are paying are justified.

Industry sources say that there is an increasing call for transparency from the side of the providers, with many consumer advocacy groups and movements calling for a mile-by-mile computation shown to potential policyholders. The new provisions may be taken advantage of since the rules do not require new pricing regulations. Some experts say that car owners are left at the mercy of large providers telling their clients how much they have to pay.