Auto Club of SoCal Agrees to Cut Car Insurance Rates By $70 Million, After Originally Proposing No Reduction

PHOTO (select to view enlarged photo)

SANTA MONICA, Calif. May 22, 2013;bCalifornia drivers insured by Auto Club of Southern California will receive an average rate decrease of 4.1% after the company agreed to lower premiums following discussions with the California Department of Insurance and Consumer Watchdog.  The nonprofit Consumer Watchdog challenged a 2012 Auto Club filing with the Department of Insurance that would not have decreased rates.  As a result of the challenge and subsequent agreement, the company will lower its rates by $70 million, or an average of $35 per policyholder.

Under California's insurance reform law, Proposition 103, consumers and consumer groups have the right to challenge rates and practices of insurance companies, and companies cannot alter rates without the prior approval of the Insurance Commissioner.  Without those protections Auto Club would not have lowered rates, according to Consumer Watchdog.

"California's insurance reform laws were written to ensure that we don't overpay for insurance, and today marks another successful implementation of the quarter century old initiative that voters passed to protect themselves and keep rates down," said Consumer Watchdog's Litigation Director Pamela M. Pressley.

Among the items challenged by Consumer Watchdog, was Auto Club's decision not to exclude from its rate calculation its expenditures on various advertising efforts related to sports sponsorships.  Under California's rate regulation rules, insurance companies cannot pass on to policyholders the costs of "institutional advertising," that is non-specific advertising expenditures aimed at promoting brand-awareness rather than providing customers with information about specific insurance products available.  Excluding several million dollars a year that Auto Club spends on NASCAR and other such sponsorships helped reduce the overall rate that the insurance company will be charging as of July 1, 2013, when the new rate takes effect.

Although the Auto Club will reduce its overall rates by $70 million, the 4.1%, or $35 per policyholder decrease is only an average. The actual premium change will vary for each customer and some customers may see small premium increases as a result of their unique coverage needs and other factors. 

Over the past decade, Consumer Watchdog has challenged more than 75 rate filings by auto, home, earthquake and medical malpractice insurance companies, saving California consumers over $2.6 billion on their insurance premiums. 

tml">Web Site:

Home | Buyers Guides For Every Auto Make | New Car Buyers Guide | Used Car Super Search | Total New Car Costs | 2016-1993 Car Reviews Truck Reviews
1996-2016 Automotive News | TACH-TV | Media Library | Discount Auto Parts

Copyright © 1996-2016 The Auto Channel. Contact Information, Credits, and Terms of Use. These following titles and media identification are Trademarks owned by The Auto Channel, LLC and have been in continuous use since 1987 : The Auto Channel, Auto Channel and TACH all have been in continuous use world wide since 1987, in Print, TV, Radio, Home Video, Newsletters, On-line, and other interactive media; all rights are reserved and infringement will be acted upon with force.

Privacy Statement | Size Does Matter | Media Kit | XML SITE MAP | Affiliates

Send your questions, comments, and suggestions to

Submit Company releases or Product News stories to
Place copy in body of email, NO attachments please.

To report errors and other problems with this page, please use this form.

Link to this page: