Dec 15, 2009

News

As is the case with any issue, there are differing views—the auto insurance initiative that California voters will see on the ballot this June is no different.

The Continuous Coverage Auto Insurance Discount Act, if passed, will allow automobile insurance providers to offer up discounts to any driver who has continuously maintained insurance coverage. That does not just mean drivers who have continued their coverage with the same provider, either.

If a driver has maintained auto insurance coverage, any automobile insurance providers can offer a discount. This means that drivers would be able to do research and shop around more for insurance. It might even mean a few extra pennies in the policyholder’s pocket—or, if you ask drivers who have not maintained coverage or have a less than preferable driving record they say it will mean a few extra pennies in the insurance provider’s pocket.

Of course there will be rules and regulations, as there are always are when it comes to any type of insurance policy. For example, if there is a record of late payment, even if coverage has been maintained, this may be a discount disqualification factor.

Also, this does not mean that drivers who have a record of auto accidents but have continued their auto insurance coverage will be off the hook for increased rates. Insurance providers will still be required, by law as they are now, to base auto insurance rates on a driver’s safety record, average number of miles driven on an annual basis, and number of years of driving experience.

This all sounds like a great act for those drivers who have clean records and have maintained an automobile insurance policy. On the other hand, for those drivers who have not maintained an auto policy the act is not favorable. Those drivers see this as one more way for auto insurance providers to make more money—providers would likely raise the cost of premiums for drivers who have a lapse of coverage.

What will the insurance environment be like for California drivers in the coming years? Will drivers who have maintained auto insurance coverage soon be able to shop around for better deals, and switch providers when their plan is up if a better deal is available? Only time will tell, and if citizens have a strong opinion about it, it is a good idea to head to the ballot box this June.