Consumer Watchdog Condemns $202 Million Auto Club Insurance Overrides & Discrimination in Employment-Based Insurance

ANGEL, July 28, 2022 /PRNewswire/ — Insurance Commissioner Ricardo Lara must reject the Interinsurance Exchange of the Automobile Club’s (“Auto Club”) offer $202 million Rising auto insurance rates and their employment-based and education-based practices are driving Californian workers’ premiums up to 9% higher, wrote Consumer Watchdog in a petition filed with the California Department of Insurance (CDI) today.

Under the 6.9% increase of Auto Club, which has 1.44 million members, with 2.68 million vehicles insured by the company, they are experiencing an average annual increase. $75 for car insurance ($140 on the schedule). Because the Insurance Commissioner has failed to enforce the anti-discrimination law in employment and education, these worst rates will fall on low-income drivers who do not have one of the professional services that Auto Club offers. price discounts, said Consumer Watchdog.

Hotel staff, hotel staff, hotel staff, caretakers, domestic helpers, and other non-domestic drivers will be paid, pay up to. $167 higher annual premiums per policy than drivers who are part of the Auto Club’s preferred auto club.

“This economy is as bad as it gets – Californians shouldn’t be adding insurance company rates to their growing list of financial problems,” said a staff attorney at Consumer Watchdog. Benjamin Powell. “These cuts to high-paying professional jobs leave low-income drivers out of the loop, because of their responsibilities.”

A 2019 investigation by the Department of Insurance found that Auto Club and other companies are charging certain drivers based on education and experience, resulting in lower-income drivers and communities of color paying more. But After three years, Commissioner Lara has yet to receive an order to stop this practice. The last draft of a potential law was issued by the Department of Insurance about a year and a half ago—nothing has been done about it.

Consumer Watchdog asked Commissioner Lara to reject the Auto Club’s use of jobs and training to increase the number of Californians who work at this rate, and advance legislation to make all insurance companies rate Californians fairly, regardless of their job or education.

The Auto Club’s petition comes as rising gas and food prices have low-wage workers struggling more than ever to make ends meet. Many people with policies – from waiters to accountants, construction workers to call drivers – will see their car insurance rates increase to about 9% more than drivers with professional jobs and advanced degrees, such as engineers, doctors, and accountants, or members of the alumni association.

“The Commissioner needs to protect working families and end the charges that would harm Auto Club customers more than anything else $160 a year. His 2019 study found that they make ‘a huge social difference.’ It’s time to take action and stop them once and for all,” Powell said.

The Commissioner finally approved Auto Club’s employment discrimination, as well as an overall increase of 6.9% for Auto Club policyholders, effective May 2018.

Employment was not legislated as a valid voter-approved item on Proposition 103. The Auto Club’s unfairly discriminatory policy means that low-income and uneducated drivers continue to pay higher wages based on their job titles.

The Consumer Watchdog petition also says that Auto Club increased its policyholders during the COVID-19 shutdown, when accident claims dropped, and could be owed hundreds of millions in other claims.

Read Consumer Watchdog’s Petition for Hearing and Petition to Intervene:

Consumer Watchdog, along with ten civil rights organizations, accused auto insurers of using illegal and discriminatory practices and training to set premiums. February 2019. In September 2019a study by the Department of Insurance confirmed this, finding a “significant disparity in financial performance” created by insurance companies. California drivers based on nothing more than their job or education. In December 2019, the Department issued regulations to end this unfair discrimination. However, after almost three years, the laws have not yet been implemented.

Read the petition from the community and civil rights organizations:

The department’s analysis shows that drivers with the highest per capita income are more than twice as likely to receive a service-based discount than drivers with the lowest per capita ZIP codes, with only 29% of drivers in low-income areas most of the ZIP. numbers receiving such discounts compared to 47% of drivers who live in ZIP codes with a majority of whites. Additionally, 75% of drivers in Underserved Communities (as defined by the Department of Insurance regulations) do not receive this discount.

Voter-Approved Proposition 103 requires that car insurance premiums be based primarily on three acceptable factors – a car’s safety record, annual mileage, and years of driving – and prohibits unfair discrimination. Proposition 103 prohibits such unfair discrimination based on occupation, education, income, or race.

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SOURCE Consumer Watchdog