Featured

Calif. Law Expanding Auto Insurance Discounts Takes Effect

Loading...

Thanks! Share it with your friends!

You disliked this video. Thanks for the feedback!

Source " />
Loading...
Added by admin
0 Views

California Governor Gray Davis recently signed a bill supported by the Association of California Insurance Companies (ACIC) that allows insurance companies to grant a rating discount on private passenger automobile policies.

Senate Bill 841, authored by Senator Don Perata, expands the availability of a discount—known in the insurance industry as a “persistency discount” — to more consumers. The new law took effect Aug. 2.

Before SB 841 was enacted, an automobile insurer was authorized to utilize an optional rating factor to give policyholders a discount based upon their loyalty and “persistency” of insurance coverage with that insurer. SB 841 expands that optional rating factor to allow insurers to grant the discount based upon persistency of coverage with another insurer. The feature is referred to as “portability” of the persistency discount.

The key purpose of the “portability” authorized by SB 841 is to enhance competition in the automobile insurance marketplace by enabling consumers to shop for the best price and product to meet their insurance needs, noted ACIC president Sam Sorich. ACIC lobbied in support of SB 841 and urged Gov. Davis to sign the bill into law.

“Actuarial evidence shows that drivers who maintain insurance for an extended period of time have lower loss costs than drivers who allow their insurance to lapse,” Sorich said. “The ‘persistency’ factor allows insurers to recognize this relationship by discounting the rates for drivers who maintain insurance for a significant period of time.”

Insurance coverage purchased under the state’s low-cost automobile insurance program or assigned risk plan will qualify a policyholder for the “portable” persistency discount. A policyholder will be eligible for a discount and persistency will be deemed to exist “even if there is a lapse of coverage of up to two years due to an insured’s absence from the state while in military service, and up to 90 days within the last five years for any other reason,” according to the new law.


Source
Category
Misc

Post your comment