Print 102 comment(s) - last by Kenenniah.. on Nov 11 at 2:04 PM

Watchdog group says new rules give insurance companies all the power

In many states in America, auto insurance is a requirement. This is a good thing since that means any accidents that happen will be sure to have coverage by both drivers. The problem according to some drivers and insurance companies is that drivers that drive more miles and have a higher chance of accidents pay the same amount as drivers who drive significantly less.

California is closer to allowing insurance companies to sell insurance by the mile to drivers. This would mean that drivers who drive more would pay more than others would. The Sacramento Bee reports that Insurance Commissioner Steve Poizner has released regulations that will permit and authorizes insurance companies to verify mileage as part of insurance plans based on miles driven.

The ultimate goal of the new insurance plan in California isn’t to save drivers money, but to encourage people to drive less. Less driving will reduce the pollution in California, the number of accidents and ease traffic congestion according to lawmakers. California isn't the only state with insurance plans based on miles driven. Texas has such plans provided by a company called MileMeter that offers six month policies with chunks of mileage ranging from 1,000 miles to 6,000 miles.

MileMeter CEO Chris Gay said, "We absolutely anticipate coming to California." He continued, "Our take is that half the market out there is being overcharged and underserved – and that's who we aim to address."

Conventional mileage based policies would reportedly take an estimate of projected mileage for a year and then refund or bill the driver depending on the actual miles driven. Mileage could be verified in several ways such as at smog check stations, DMV records, and via electronic devices attached to the car.

The fear with mileage based insurance plans is that there will be a push to charge drivers to drive longer distances each year more money in insurance rates. However, there is reportedly no plan to do that at this time.

Two thirds of homes in the country would save about $270 per year per car with mileage based plans according to a study from Brookings. However, Carmen Balber from Consumer Watchdog says that the new policies cater to the insurance industry and don’t require the premiums to reduce when driving does.

"I think the regulations were drafted to guarantee that insurers win, because they were left with all of the choice," Balber said.

Insurance companies are taking the new proposal seriously and Michael Gunning, VP of the Personal Insurance Federation of California said, "Given the competitive nature of the marketplace, I think this is going to be a selling point for companies."

The members of the federation write more than 50% of all auto policies in California. Drivers concerned about their privacy with policies requiring a device be connected to the car need not be concerned according to lawmakers. Regulations prevent the devices from recording location information about the vehicle. However, Balber maintains that the mileage devices give insurance companies a foot in the door to push for the right to collect other data. Future policies could possibly rate drivers higher if they drive in high crime areas frequently.

There are also proposals in the works that would regulate gas taxes on a per-mile basis using GPS tracking.

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RE: California is stupid
By Donkey2008 on 11/10/2009 12:10:34 PM , Rating: -1
Wow, there sure are a lot of rants about California on this board. Apparantly there are a lot of lazy people that just can't make it in California.

Here is an idea; go back to the South or Midwest where you can work at the local Walmart and still afford a trailer to beat your girlfriend in ("No Billy Bob! Not the face!"). For us Californians, a lot us go to school or the military (or both), then work very hard to succeed. Of course to anyone outside this state, that is just more "lib talk" from a bleeding heart do-gooder. No wonder middle-America is such an economic failure (and ironically why Fox News is such a success).

I guess if you don't like it here, then move away. We really don't need more midwest or Southern, meth-head, white trash moving here. It just drags the state down while the rest of us are succeeding through hard work.


A white, middle-class, Republican Californian.

RE: California is stupid
By d3872 on 11/10/2009 12:22:45 PM , Rating: 4
...For us Californians, a lot us go to school...

I couldn't have said it better myself.


Wife beating redneck (i.e. anyone who wasn't born in California, apparently)

RE: California is stupid
By Spuke on 11/10/2009 12:58:26 PM , Rating: 3
As a transplant from other states, I can attest that California does have its own mini-culture but it seems that culture is more readily apparent in the cities. The rural areas of CA are more like the other southwestern states. CA isn't the only state with its own mini-culture, the US is made up of various sub-cultures. It's just how we are. No one is better than the other although we have our own preferences. I live in CA and LOVE the geographical diversity. How many places can you go to the beach and swim and go to the mountains and ski in the same day?

I don't like CA's government at all and am willing to give up what I do like to get a better government. It just seems their sole purpose in life is to f$%k its own residents. We're constantly having to fight these guys. It's ridiculous. There's a lot of people willing to stay and fight but I'm tired of it. Moving to AZ the second I get the opportunity.

RE: California is stupid
By Spuke on 11/10/2009 12:48:28 PM , Rating: 2
No wonder middle-America is such an economic failure (and ironically why Fox News is such a success)
And California is an economic success? LOL!

RE: California is stupid
By Donkey2008 on 11/10/2009 4:48:46 PM , Rating: 2
I'm sure the people at Northrup Gruman, Intel, Chevron, Dreamworks, Levi Strauss, VISA, Amgen, Apple, Taco Bell, CB Richard Ellis, Unocal, THQ, Disney, HP, Callaway, Nvidia, Jack in the Box, Google, etc...etc...etc...etc...etc...etc would disagree with that assessment.

RE: California is stupid
By mdogs444 on 11/11/2009 8:30:06 AM , Rating: 2
Perhaps you should reanalyze the situation that we're talking about here.

No one is saying that there are not good, well established companies in California who can make a profit. We're saying its the far left government of California (and now the US) who wants to penalize and tax to hell any company that makes a profit - then they complain about job cuts, layoffs, companies moving overseas, offshore tax havens, price increases, and companies holding out their hands for bailouts.

Its not the companies who are at fault - its the ever punishing government who changes the rules by the day and causes companies to not be able to function at margins they deem as profitable and forward looking for their own business plans.

"And boy have we patented it!" -- Steve Jobs, Macworld 2007

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