Car insurance rates downshifting

by admin

Gregg Jones had been with Triple AAA of Northern California for more than 30 years before he decided to shop around for a new auto insurance policy.

“Once you get something in place it’s hard to change. You just get to the point where the (premiums) were becoming a major factor,” said the 62-year-old Martinez resident and attorney. So in 2007, he switched from Triple AAA to Mercury Insurance, a move he said has resulted in substantial savings while maintaining the same level of coverage for his late-model BMW. The change resulted in his yearly premium going down about 30 percent, said Jones.

Starting about three years ago, many auto insurers in California have lowered their rates, setting the stage for drivers to shop around.

Fewer accidents, industry competition, a cut back on driving due to higher gas prices and a slowing economy along with a regulatory push are among the reasons for lower rates, observers say.

“We believe the auto insurance market is very competitive and insurers know that people can shop around to find lower rates,” said Darrel Ng, a spokesman for the state Department of Insurance, which requires auto insurers to obtain prior approval for rate changes or leaving them unchanged.

Another factor is fewer accidents, due to higher gas prices and a slowing economy, he added.

Proposition 103, the landmark auto insurance reform initiative passed by voters in 1988, has also played a significant role, said Doug Heller,

executive director of Consumer Watchdog.

Prop. 103’s best-known provision — that insurers base premiums more on motorists’ driving records as opposed to where they live — began to be rolled out two years after a long fight between consumer groups and department officials that supported that provision and insurers that fought it.

That provision may result in lower or higher premiums for some drivers but it has not had a significant impact on overall rates sought by insurers, Ng added.

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