Agents Report Big Rise in Uninsured Driver Fees

Insurance agents who sell automobile policies in Southern California inner-city areas reported Monday that since Insurance Commissioner Roxani Gillespie authorized an average 85% increase in assigned-risk rates 10 days ago, there has been a huge jump in uninsured motorist premiums.

A large number of customers say they will drop all coverage, the industry representatives said at a South Gate news conference.

Representatives of the Alliance of Los Angeles Inner-City Brokers and Agents, the American Agents Alliance and the International Agents and Brokers Assn. of California appealed to Gov. George Deukmejian to call a special legislative session to seek passage of a low-cost auto policy that would provide minimum benefits.

South Gate insurance agent Javiar F. Rodriguez said that prices for uninsured-motorist coverage sold optionally with assigned-risk coverage have gone up 150% since Gillespie’s action.

Rodriguez said that with so many people dropping their auto insurance, the chances that a policyholder will collide with an uninsured motorist are mounting astronomically, necessitating the higher premiums.

When uninsured-motorist coverage and medical payments are combined with the minimum assigned-risk liability coverage, premiums for a Los Angeles-area driver over 25 years of age are increasing from $850 to $1,850 a year, Rodriguez said. Rates for a 23-year-old male with one minor violation are going up from $1,178 to $2,636 a year, he said.

Rodriguez added that a check of his customers showed 60% saying they will drop their assigned-risk coverage when it comes up for renewal.

Marie Holguin, an agent from Bell, said that when she told one policyholder Monday morning what his new price would be, “the guy came right back at me, ‘You guys are crooks.’ ”

Holguin said she had been trying to contact various companies asking how their rates would compare with the new minimum rate for assigned-risk coverage of $1,000, but had found that their quotations were all higher than that.

Lourdes Garcia of Hawthorne, representing International Agents, said inner-city agents have “hit a brick wall” trying to secure policies in the regular market, and that for many of her customers assigned risk will remain the only practical alternative.

Kerry Wright of Los Angeles, representing the inner-city alliance, said state leaders must realize that without legislative action soon, the liability insurance system in California will collapse for most drivers of modest means.

But Donald R. Stewart, a Pasadena agent who is executive director of the American Agents Alliance, said Deukmejian Administrative representatives want assurances that any special legislative session would be successful, but he has been unable able to give such assurance.