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California Seniors Assail Insurance Commissioner on Proposed Changes to Auto Insurance Regulations

Say Misguided Regulatory Changes Will Raise Auto Insurance Rates for Seniors and Drivers in Rural Areas

SACRAMENTO, Calif., Dec. 22 -- John Kehoe, policy chair for the California Senior Advocates League, issued the following statement today in response to the new auto insurance regulations proposed by California Insurance Commissioner John Garamendi.

"Once again Commissioner Garamendi is proposing a plan to modify auto insurance regulations that dramatically reduces the weight given to location and zip code when insurers calculate auto insurance rates. Under this proposal, premiums will likely increase for millions of drivers and end up harming more people, particularly seniors living on fixed incomes, than it will help. It just doesn't make sense.

"The Insurance Commissioner considered similar changes two years ago, but dozens of local elected officials and community and business groups throughout the state raised strong opposition. We were under the impression he heard us loud and clear -- but apparently, we were mistaken.

"It only makes sense that a driver's location -- where you drive and keep your vehicle -- influences the likelihood that you might need to file a claim. Drivers who drive on more congested, accident-prone roads or drivers who live in neighborhoods with more auto theft claims are more likely to have an insurance claim.

"Ignoring a driver's location does not reduce the likelihood a claim will be filed, it simply transfers the cost of that claim across the pool of all insured drivers -- resulting in significantly higher premiums for good drivers, seniors, and in suburban and rural areas to subsidize drivers in higher risk major cities such as Santa Monica, Beverly Hills, Los Angeles and San Francisco.

"Many seniors have chosen to live in rural areas precisely because they are on a fixed income and want to live in an area with a lower cost of living. It is simply not fair to ask good drivers, seniors, rural drivers and others to subsidize drivers in more densely populated regions of the state. But that is exactly what would happen under the new regulations proposed by Insurance Commissioner Garamendi.

"Ironically, Commissioner Garamendi likes to portray himself as a protector of consumers' rights, but these proposed regulations will likely cause auto insurance rate increases for the majority of drivers statewide."

CALSAL is a bipartisan network of people 50 years of age and older who believe that effective policy solutions are forged through compromise and conciliation. Indeed, CALSAL members believe it is more important to educate our children, provide affordable housing, secure affordable, quality healthcare for our citizens and support social services to keep our communities productive than adhere to partisanship or calcified ideology.