Under new rules proposed by the California Department of
Insurance, automobile insurance rates in San Benito County could
jump anywhere from 8 to 18 percent after August.
Hollister – Under new rules proposed by the California Department of Insurance, automobile insurance rates in San Benito County could jump anywhere from 8 to 18 percent after August.
The new rules, which were designed to make insurance rates fair for everyone, would require insurers to give more consideration to driving record and annual mileage in setting auto insurance premiums, while giving less consideration to a driver’s place of residence, according to the Department of Insurance. The California Farm Bureau has staunchly opposed the proposed changes, claiming that they would force rural residents to subsidize the cost of auto insurance for urban residents.
Byron Tucker, deputy commissioner of the California Department of Insurance, isn’t surprised by the opposition and said the new plan was designed with fairness in mind.
“Any time you try to improve the system, there is going to be dissension,” he said. “These rules are about making sure insurance rates are determined by how you drive, not where you live.”
But Farm Bureau spokesman Dave Kranz said that even though rural drivers have considerably fewer auto insurance claims than their urban counterparts, the new proposal would force them to pay rates higher than needed to cover the expected cost of their auto accidents.
And the possible rate spike has many rural San Benito County residents concerned.
“It’s a concern for everyone who lives in a rural area,” county Supervisor Reb Monaco said. “But there doesn’t seem to be anything we can do about it.”
Despite the local concern, San Benito County isn’t alone. Average auto insurance rates would rise in 52 of the state’s 58 counties, said Nancy McDonough, the Farm Bureau’s General Counsel. The Farm Bureau, which represents more than 88,000 farmers and ranchers, opposes the plan because it unfairly targets rural drivers, McDonough said.
“In urban areas the cost and frequency of claims is much higher,” she said. “Yet in the most rural areas of the state these insurance rates go up nearly 40 percent.”
When determining premium rates, insurers look primarily at a driver’s record, annual mileage and the number of years they have been driving, McDonough said. However, other factors, such as where the driver lives and how long they have been continuously insured, are also considered. The Farm Bureau believes more weight should be given to where the driver lives, McDonough said.
“We would like to see geographical factors given more consideration,” she said. “But now they want to give it even less.”
While some rural residents may believe they’re being unfairly targeted for raised rates, Tucker said the Farm Bureau’s fears my be unfounded.
“We don’t think rates are going to rise automatically in rural counties,” he said. “We just want every driver to be treated as an individual – why should a good driver, who hasn’t had an accident in 30 years, have to pay more because of where he or she lives.”
Brett Rowland covers public safety for the Free Lance. Reach him at 637-5566, ext. 330 or [email protected]
