Twitter You Tube Facebook Autobodynews Linked In

Monday, 29 October 2018 18:41

Insurer Group Hammers Claim that CA Prop 103 Saved Drivers Billions

Written by Staff, Insurance Journal

Index

The insurance industry is taking exception to a new report commemorating the 30th anniversary of one of California’s primary auto insurance laws that claims the law has saved drivers billions of dollars.

 

The Consumer Federation of America reported on Oct. 17 that Proposition 103, the insurance reform law passed by California voters in 1988, has saved drivers $154 billion on their auto insurance and that the law has lowered auto liability premiums in California by 5.7 percent since 1989, even as liability premiums rose across the rest of the country.

 

Mark Sektnan, vice president of the Property Casualty Insurers Association of America, said it wasn’t Prop 103 that saved Californians all that money but other reforms that have been made since then.

 

“California has a healthy and competitive auto insurance market despite Prop. 103,” Sektnan said. “The exorbitant liability and auto insurance costs plaguing California in the 1980s, which drove passage of Prop 103, were reduced through court decisions, stronger highway safety laws, increased seat belt usage and safer car manufacturing.

 

“No other state has adopted the same anti-competitive, restrictive regulatory system as Prop 103 since it was enacted in 1988.”

 

According to Sektnan, insurers routinely work to keep auto insurance costs lower by advocating for auto safety laws, controlling liability costs and keeping auto body repair rates under control.

 

“It is these actions to reduce underlying costs that have provided benefits to Californians, not Prop. 103,” he added.

 

The CFA credited the savings and stability of rates to the provisions in Prop 103 that require insurance companies to justify and get approval for rate increases, allow the public to challenge unfair insurance company practices and excessive rates, and that made the insurance commissioner an elected post.

 

Californians will elect a new insurance commissioner in November.

 

“Three decades ago, California voters joined together with tens of thousands of small donations to put Proposition 103 on the ballot and pass it, despite an unprecedented $63 million campaign of lies and deception by the insurance industry,” Harvey Rosenfield, the author of Proposition 103 and the founder of Consumer Watchdog, said in a statement. “$154 billion is a 30th birthday gift from Prop 103 to the people of California, rewarding a battle against insurance company overcharges and abuses that has been waged every day for the last three decades.”


Previous Page Next Page »

Read 475 times