New Effort to Educate Californians About Pending Auto Insurance Rate Increase

Mail & Television Ads Will Urge Drivers to Contact Insurance Commissioner Garamendi and Tell Him to Drop Department's Unfair Plan

SACRAMENTO, May 8 -- A diverse group of local elected officials, chambers of commerce, tax groups and insurance companies today announced that Californians to Stop Unfair Rate Increases (CSURI) will begin immediately educating Californians through television ads and mail to their homes about proposed auto insurance regulations that will unfairly raise rates for millions of drivers statewide.

To see a list of CSURI Steering Committee members, a PDF of the mail piece and the script for the TV ad, go to http://www.stopunfairrates.org/ A list of CSURI Steering Committee members also follows this press release.

"I testified at a town hall meeting in Fresno and expressed my concerns when these auto rating changes were being discussed in early 2004," said Kings County Supervisor Jon Rachford. "I also drove from Hanford to San Francisco in February of this year to testify against the changes again at the public hearing. I'm not alone in my opposition or in my frustration. Over the past several months, dozens of local elected officials, chambers, and other community leaders have registered concerns with the regulations. Unfortunately, we have been ignored."

"I want to ensure my constituents understand how this regulatory change will impact their pocketbooks," said Inyo County Supervisor Linda Arcularius. "I'm sure elected officials from other negatively affected regions would feel the same. We are confident that when more Californians are made aware that they are about to pay as much as 30% more for auto insurance -- just to subsidize arbitrary rate decreases for drivers in the state's biggest cities -- they will take action and urge Insurance Commissioner Garamendi to drop the plan before it is implemented."

The law requires auto insurance rates to be based on the actual costs and risks associated with providing insurance to each driver. That's the way rates are calculated today and that's the way it should be. But, under the plan first announced by the Department of Insurance in December, 2005, drivers in the state's biggest cities will receive arbitrary rate reductions, while drivers in other regions of the state will be forced to pay more.

The proposed changes seek to reduce the influence location carries in the formula when insurers calculate auto rates. By reducing the influence of location, drivers in more congested areas of the state like Los Angeles, San Francisco and Beverly Hills, where there are more people on the road and more risk of an accident or theft, will pay less for auto insurance. Alternatively, rates will go up for drivers in more rural and suburban areas, where there are fewer people on the road and less risk of an accident.

The proposed changes ignore factors that greatly contribute to risk associated with certain regions. Population density and congestion are two such factors, another is fraud. According to the National Insurance Crime Bureau, there are more staged accidents in Los Angeles than any other city in the country, except Miami.

"This proposed regulation is simply unfair," said Michael Turnipseed, executive director of the Kern County Taxpayers Association. "Rather than invest time and resources in fighting fraud so that insurance rates can be reduced for all drivers -- this misguided proposal would shift the cost of that fraud to drivers who live in less populated regions of the state -- like ours, where there is less fraud."

Some members of CSURI also participate in Californians Against Higher Insurance Rates, a loosely formed coalition that has been speaking out against the proposal during regulatory proceedings held by the Department of Insurance. Many local leaders became frustrated with the lack of response to their opposition and look forward to participating in a more expansive effort to educate and engage more Californians before it's too late.

CSURI will be requesting contributions from the public and businesses, but in the meantime a few insurance companies, Farmers, 21st Century, State Farm, Safeco and Allstate agreed to fund the education effort because they strongly believe that auto insurance rates should be based on actual costs and risks and not arbitrary desire to reduce rates for certain customers.

A budget of approximately $2 million will allow the coalition to educate households in the following counties: Butte, Del Norte, Humboldt, Imperial, Inyo, Kern, Kings, Mendocino, Nevada, Lake, Plumas, Santa Barbara, San Benito, San Diego, Solano, Tulare and Yolo. Additional counties may be added later.

  CSURI Steering Committee (partial list)

  Elected Officials
    Linda Arcularius, Inyo County Supervisor
    Rob Brown, Lake County Supervisor
    Anthony W. Farrington, Lake County Supervisor
    Sue Horne, Nevada County Supervisor
    Curt Josiassen, Butte County Supervisor
    Leslie McNamer, Del Norte County Supervisor
    Reb Monaco, San Benito County Supervisor
    Joe Neves, Kings County Supervisor
    Jon Rachford, Kings County Supervisor
    Sarah Sampels, Del Norte County Supervisor
    John Woolley, Humboldt County Supervisor
    Gary Wyatt, Imperial County Supervisor
    Mark Ashiku, Ukiah Mayor
    Ruth Asmundson, Davis Mayor
    Mary Ann Courville, Dixon Mayor
    Maureen Kirk, Chico Vice Mayor
    Peter La Vallee, Eureka Mayor
    Richard Ortega, Tulare Mayor
    Michael Smith, Dixon Councilmember
    Jerome Stocks, Encinitas Councilmember
    Philip E. Vandegrift, Tulare Councilmember

  Business/Taxpayer Groups
    Greater Bakersfield Chamber of Commerce
    Carpinteria Valley Chamber of Commerce
    Kern County Taxpayers Association
    Lakeport Regional Chamber of Commerce
    Oxnard Chamber of Commerce
    Paradise Ridge Chamber of Commerce
    Quincy Chamber of Commerce
    San Diego Taxfighters
    Templeton Chamber of Commerce Board of Trade