Insurance Discounts in California
In 1988, California passed Proposition 103; a law stating that drivers who have no risks within five years of driving are allowed to receive additional discounts, but only if they stay with the same insurance company. However, a newly passed law has changed how California insurance companies provide discounts to safe drivers, allowing drivers to still get discounts after five years of safe driving, even if they switch to another company.
Proposition 33, a newly passed California motorist law, states that consumers who have California auto insurance and have been safe drivers, can either keep their current insurance or switch to another company without their discounts being affected. This new law allows drivers to negotiate better rates and deals with their current insurance company. This gives the customers more power in regards to negotiations and their own insurance premiums.
Proposition 33 will also those who no longer need insurance the ability to keep their discounts. For example, people in the military, the unemployed, disabled, or those who no longer have a car may need to stop their insurance for a period of time. Under the new law, lapse of insurance doesn’t take away the persistency discount, allowing drivers to have customer protection.
In addition, Proposition 33 mandates that the California Department of Insurance, along with the elected insurance official, have the final say insurance prices. Any outrageous or excessive insurance will be banned. Extra fees and additional charges, although typical in many other states, is not allowed in California.
In conclusion, with a new law in place, California insurance companies will no longer be able to charge higher rates while knowing that their drivers cannot move onto other companies. Drivers now have the option to find the best rate and deals for their own situations without the fear of losing their driving discounts. This is turn will provide a more competitive insurance market, which will make for lower rates and more uninsured drivers coming forward to get insured.