Insurers See Major County Car Rate Cuts With Props. 100, 103

Times Staff Writer

In a flyer made available over the weekend at a meeting of the Democratic State Central Committee, insurance industry campaigners said that two initiatives they oppose, Propositions 100 and 103, would, if passed, result in auto insurance rate decreases ranging as high as 55% in Los Angeles County.

The industry flyer also predicted that the two measures would mean a decrease of 11% in Orange County.

At the same time, the flyer repeated contentions that despite their rate rollback provisions, Propositions 100 and 103 would actually raise auto insurance prices in 54 of the state’s other 57 counties.

The industry’s estimates are challenged by both the Proposition 100 and 103 campaigns, who assert that the rollbacks their measures call for would apply uniformly throughout the state. They say the industry is trying to defeat their initiatives by convincing voters outside of Los Angeles and Orange Counties that the two measures are unfair to them.


The insurance industry contends that Proposition 100, backed by the California Trial Lawyers Assn., and Proposition 103, supported by consumer advocate Ralph Nader, would do away with the territorial rating system under which insurance prices are based on where a policyholder lives. Forcing insurers to charge uniform rates regardless of risks in particular areas, the industry argues, would result in most areas getting increases while only a few would get decreases.

The Proposition 100 and 103 campaigns say territorial rating is unlikely to end under their measures, which contain provisions that would allow the state insurance commissioner to preserve the system.

The industry flyer, however, was the first time the insurers have estimated the precise size of rate reductions they say would occur in parts of Los Angeles if the measures they oppose are passed.

Many companies have been raising rates in recent months for policyholders in the Los Angeles area. The decreases mentioned in the industry flyer would be figured from rates in effect on election day.


According to the flyer, the Burbank-Foothill area would get a 36% decrease in rates, Commerce-South Gate a 29% decrease and other decreases would be Glendale-Pasadena, 36%; Harbor, 21%; Long Beach-Montebello, 21%; Los Angeles inner suburban, 29%; Los Angeles metropolitan east, 47%; Los Angeles metropolitan north, 54%; Los Angeles metropolitan south, 55%; North Bay, 50%; San Fernando east, 48%; San Fernando west, 43%; San Gabriel central, 17%; San Gabriel east, 15%; San Gabriel north, 15%; San Gabriel south, 17%, and South Bay, 17%.

The areas were not further defined and in some cases do not correspond to geographical sections usually referred to in the Los Angeles area.

The flyer also said Orange County would get an 11% decrease, but it said San Diego County would get a 23% increase and other increases would amount to 38% in Santa Barbara County, 4% in Ventura County, 9% in Riverside County, 42% in San Bernardino County and 9% in Kern County.