California's Prop. 213 Cuts Auto Insurance Rates

12/18/96

California's 209 auto insurance providers have been ordered by State Insurance Commissioner Chuck Quackenbush to reduce their rates in light of expected savings from the recently-passed Proposition 213.

Prop. 213, which prevents uninsured motorists and drunk drivers from receiving "pain and suffering" damages in auto accident cases, may reduce the annual payouts for insurance companies by as much as $327 million, according to the State Insurance Department. The insurance companies' 1997 rates are required by law to reflect these projected savings.

Totalling $7.6 billion per year, California's private auto insurance premiums are the highest in the U.S. Supporters of Prop. 213 say that it will provide car owners with much-needed relief from these high rates, while opponents are skeptical that it will have any significant effect.

Ryan Houlette -- The Auto Channel