California Car Insurance Reform Would Level Playing Field

The Consumer Federation of California and Consumer Federation of America are applauding new rules on car insurance fairness proposed by California Commissioner of Insurance Ricardo Lara. The rules are expected to be presented today.

“Group insurance discounts are meant to empower consumers who purchase their car insurance through a group to which they belong, but some insurance companies have deformed this idea into discriminating against safe drivers in lower-wage occupations,” said J. Robert Hunter, CFA Insurance Director and former Texas Insurance Commissioner. “The draft regulations will stop insurance companies from punishing Californians who don’t have the right job title, while strengthening the ability of consumers to band together and get cheaper coverage.”

The regulations address a loophole that insurance companies have carved out, in which some insurers have created phony occupation-based groups in order to offer lower-priced coverage to white-collar professionals while charging higher rates to Californians with blue-collar jobs or who are unemployed. The rules also allow consumers to get group discounts through their organizations and require that insurers make those group discounts more accessible to lower-income communities of color, who face higher rates due to discriminatory occupation-based insurance pricing.

“Blue-collar Californians, including millions of essential workers, factory workers, farmworkers, and service employees, have been forced…