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Friday, May 25, 2007

Auto-Insurance

Auto-Insurance
Today, a new auto insurance bill is considered by California Assembly Insurance Committee which is bound to prevent the Department of Insurance from changing auto insurance rating factors without first checking the rates and loss risks.
The ACIC President, Sam Sorich said that he believes the bill is a good policy to undertake that would spare many consumers an unfair auto insurance treatment.
In other words, the auto-insurance bill would prevent the Department of Insurance from swinging the auto insurance rates without first verifying that the changes would not shatter the relationship between rates and the risk of loss.
The current legislation exerts a direct effect on the authority of Department of Insurance substantially impeding its scope of operation in terms of setting arbitrary insurance rates.
In making the Department of Insurance to first study the consequences of regulatory changes, before enacting them, the bill ensures that these alternations would not result in any type of unfair discrimination.
Sorich has further argued that the proposal would generate subsidies among drivers, thus increasing rates for most Californians.
"The department's proposal is contrary to a 2000 state court of appeal ruling that concluded rates must be substantially related to risk and they must not be arbitrary or unfairly discriminatory.
" According to Soriach, the preliminary study, called for by the current auto-insurance bill, ensures that auto insurance ratings comply with the law.
Undoubtedly, owning a car these days is becoming a luxury; insurance alone drains on average $939 a year.
All in all it costs somewhere around $7,834 a year to drive a car, according to Automobile Association of America.
Hence, a solid auto insurance policy is an absolute must.

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