Farm Bureau drives effort for fair insurance rates
» July 19, 2006 «
Farm group files lawsuit to block unwarranted increase in auto-insurance costs
To protect drivers in Blythe, Benton, Biggs and other rural areas from suffering sharp, unwarranted increases in auto-insurance premiums while drivers in Beverly Hills benefit from lower bills, the California Farm Bureau Federation filed suit to block changes in insurance regulations.
Farm Bureau filed the suit Tuesday, July 18, 2006 in Sacramento County Superior Court. The suit contends the new rules violate state insurance laws by requiring insurers to give artificially high weight to annual mileage and driving record in setting auto-insurance premiums, while giving artificially low weight to a driver˜s place of residence.
"As the largest organization representing rural Californians, we feel obliged to stand behind them," California Farm Bureau President Doug Mosebar said. "Our rural communities have lower average incomes than the rest of California and now many residents could face double-digit insurance-rate increases, through no fault of their own."
The new rules from the state Department of Insurance sharply penalize rural drivers even though they have fewer auto accidents and file fewer insurance claims. "What you pay for auto insurance should be based on your risk of having an accident or filing a claim. That's fair for everybody," Mosebar said. "The state's new rules use an arbitrary standard that ends up punishing rural drivers. It shouldn't matter if you live in the country or the city: You should pay a fair rate for auto insurance."
An analysis of the new Insurance Department rules, commissioned by the department and conducted by an independent actuarial consulting firm, shows that residents in many rural communities could see double-digit rate increases under the new regulations. Rates in places such as Beverly Hills and a number of densely populated areas could see double-digit decreases. Consumers may review the study on the California Farm Bureau Web site at www.cfbf.com/autorates.
Hundreds of family farmers, ranchers and rural Californians filed written comments with the Insurance Department earlier this year, protesting the new rules and the disproportionate burden they would cause in rural regions.
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.
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