Informa Insurance News 24
CALIFORNIA COURT LETS MOTOR INSURERS SET RATES BY POSTAL CODE
A California state appeals court has ruled that motor insurers may base premiums on where a motorist lives. The court reversed a 1998 trial court ruling that said former insurance commissioner Chuck Quackenbush had erred in allowing motor writers to set rates according to postal codes rather than a driver’s record. Consumer activist Harvey Rosenfield said that he would appeal against the ruling to the state supreme court, remarking that the appellate court had ignored the intent of a 1988 voter initiative that was designed to lower motor premiums. The court said that the voter initiative, known as Proposition 103, was contradictory and that merely abandoning postal code-based pricing would not necessarily produce lower rates. New insurance commissioner Harry Low has not yet commented on the appeals court ruling.