Auto insurance rates must be fair for all, Farm Bureau says

» February 24, 2006 «

Strange as it may sound, a Bentley owner in Beverly Hills may get a big break on auto insurance, while a family farmer driving a pickup truck in Beckwourth, Bishop or Buellton could see premiums skyrocket.

Challenging new rules proposed by the California Department of Insurance, a farmer urged the department today to reconsider its proposal.

Ron Taddei, a farmer from Napa, testified on behalf of the California Farm Bureau Federation today at a public hearing held by the state Department of Insurance in San Francisco. He said the department's plan would raise auto insurance rates for most California drivers, and that rural residents would be hit especially hard. In some rural areas, average rates could jump 40 percent or more.

"It shouldn't matter where drivers live, in the city or in the country. We should all pay fair insurance rates that are based on our risk of having an accident or filing a claim," Taddei said, noting that average rates could rise 12 percent where he lives.

The department's proposal would require insurers to give artificially high weight to driving record and annual mileage in setting auto insurance premiums, while giving artificially low weight to a driver's place of residence.

"Rural drivers have to drive more miles to go to the store, take the kids to school and run other daily errands," Taddei said. "This rate proposal punishes them for that. But where those miles are driven makes a big difference. Rural drivers have far fewer auto insurance claims than drivers living in cities."

In addition, he noted that average incomes in rural areas are generally lower, making the impact of sharply higher auto insurance rates even more severe.

During the past two weeks, hundreds of farmers and rural residents have e-mailed the insurance department, urging it to reconsider its proposal.

The insurance department's deadline for submitting written comments on the proposal has been extended until March 6. Information about how to submit comments, and about the potential impact of the rate proposal in each California ZIP code, may be found on the Farm Bureau Web site at www.cfbf.com/autorates.

The California Farm Bureau Federation, the state's largest farm organization, works to protect family farms and ranches on behalf of more than 88,000 members.

Contact: Dave Kranz
Phone: 916/561-5550
news@cfbf.com

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.