|
|
California Persistency Discount Comes to BallotFebruary 1, 2010 – The “persistency” rating factor is one of sixteen optional factors that insurers in California are allowed to use to adjust their premiums for each individual: the qualification says that insurers can reward their long-term customers with a discount for their continued loyalty.
A new initiative by Californians for Fair Auto Insurance Rates has gained sufficient support to reach the June 8 ballot. The CalFAIR proposal would allow consumers to take a persistency discount from one company with them as they shop for new insurance at different companies, turning it into a transferable benefit more like a “good driver discount.” CalFAIR believes that treating the discount in this way would reduce insurance costs for a majority of consumers by increasing the competition between insurance companies for new subscribers. “Like a good driver discount, this ballot measure would reward more than 80 percent of responsible California drivers who maintain insurance coverage as required by law” says a spokesperson of CalFAIR.
However, the Campaign for Consumer Rights points out that people who do not have prior insurance are surcharged under the portable persistency policy, and that “many of these people are those that can least afford to pay for insurance, or who already have high premiums caused by other rating factors.” The organization suggests that this measure will increase their costs further, discourage them from buying insurance, and drive up the number of uninsured motorists on the road.
The Legislative Analyst Office of the state of California predicts that the measure could change the total cost of premiums, but expects an impact that is “probably minor.”
|