In late December of last year, the Court of Appeal of the 1st District in the State of California ruled than an automobile insurer could in fact use zip codes to determine automobile insurance rates.† This ruling brings us back to good old Proposition 103, the validity of which was upheld† by a trial court in 1998.† The trial court issued a ruling indicating that where a motorist lives cannot be used to determine how much auto insurance he should pay.† The Court of Appeal reversed this ruling.† The appellate court noted the contradictory nature of Proposition 103, indicating that while its goal is to protect automobile drivers from arbitrary insurance rates, it requires that where a motorist resides cannot be considered in the price of the auto insurance charged to the driver.† Proposition 103 states that the driving history of the individual as opposed to where he parks his car at night should be all that is considered when deciding his insurance rate.
The Court of Appeal disagreed, holding that it is not how a person drives, but actually where a person lives that is the most significant factor in quoting a fair price for automobile insurance.† Harvey Rosenfield, the activist who was behind the passage of Proposition 103, indicated his extreme disappointment with this ruling.† His goal for Proposition 103 was to lower auto insurance premiums for drivers, and he sees this ruling as in effect undoing this law.
The theory behind the use of zip codes is that accident rates are higher in big cities.† Rosenfield states that is prejudicial to those who live in the city.† The counter argument is that those who live in the suburbs should not have to unfairly pay a higher premium due to the fact that most large losses take place in the city.
It seems to me that all the above should be taken into consideration when determining an insurance premium.† It should include the driverís driving history along with the driverís residence.† I agree that the driving history is important but I also feel that oneís location is important.† I think that to use one factor to the exclusion of the other is unfair to all who drive and to all who pay automobile insurance.† I believe that a combination of factors as opposed to using one and excluding all others will benefit all parties involved and is the most fair way to determine what one should pay for insurance.
I do not like legislating through propositions.† We elect assemblymen and senators to pass bills and address issues and when ďthe peopleĒ attempt to circumvent that process and legislate through poorly considered propositions, that which is passed usually sounds quite appealing, but ultimately leads to problems such as what we have here.