Auto insurance rates vary by city in the San Gabriel Valley, but are among the county's lowest, according to a new survey by the state Department of Insurance.
The survey released by the department last week showed that San Gabriel Valley residents would pay much more for car insurance if they lived in central Los Angeles, Beverly Hills, Long Beach, Santa Monica, Canoga Park or North Hollywood. In some cases, the rates outside the San Gabriel Valley are double.
The survey also showed that car insurance is generally cheaper in the eastern half of the valley than the western half, but that does not hold true with every company. And rates of individual companies vary greatly.
For example, a 23-year-old single woman who lives in Claremont and drives a 1984 Honda LX to work 10 miles a day and drives less than 15,000 miles a year could buy insurance from the Automobile Club of Southern California for $575, getting about the same coverage that would cost $809 from Allstate.
But a 42-year-old married man, also living in Claremont, who drives his 1981 Dodge Colt three miles to work daily and under 12,000 miles a year, could get a better rate from Allstate, paying $553 for the same sort of coverage that the Automobile Club sells for $601. If the man moved to Altadena, his insurance bill would increase to $853 with the Automobile Club and $858 with Allstate.
The lesson to be drawn from these examples is that it pays to shop around, said George Watts, president of the Western Insurance Information Service, which is funded by insurance companies.
Watts said each insurer has its own claim history and its own way of computing risks. While rates are regulated by the government in some states, the practice in California has been to let companies set their own rates.
Jerry Clemans, vice president for public relations at Farmers Insurance, said the rate examples released by the state can be misleading because they fail to take a wide variety of discounts into account. For example, Farmers offers special rates to nonsmokers, persons between 30 and 60 years of age and students with good grades.
Clemans said that because insurance rates are tailored to individual circumstances, the only way a person can find out the exact rate for his car is to see an insurance agent.
There are generally three ways to buy insurance: from an agent who represents a single company; from an independent agent who represents several lines of insurance, or directly from an insurer by mail or phone.
The state survey shows that some of the lowest rates available in the San Gabriel Valley are offered by 20th Century, a company that limits its clientele to low-risk drivers and sells only by phone. Some of the highest rates are listed for Hartford Casualty, a company whose passenger car insurance makes up only a small part of its business.
Watts said insurers use many factors to determine rates, from the driver's age to his driving record to the potential costs of car repairs, but the most controversial lies in the fact that much of what a person pays for insurance is based on where he or she lives.
It is apparent from the state survey that insurers have differing views on which San Gabriel Valley cities present the highest claim risks. Claremont, San Dimas and La Verne tend to have lower rates than Altadena, Monterey Park and Rosemead, but there are exceptions.
20th Century offers identical rates in 24 San Gabriel Valley communities, but charges higher premiums in part of El Monte. On the other hand, Mercury Casualty divides those same 24 communities into 11 rate areas and gives El Monte one of its lowest rates.
Some legislators have questioned the fairness of territorial differentials because poor neighborhoods often have the highest rates. State Sen. Art Torres (D-South Pasadena) has introduced a bill requiring insurers to shift the basis of pricing from territories to driver records.
But attempts to eliminate territorial rating have been scuttled in the past at least partly because so many people benefit from the current system. Insurance industry officials claim that two-thirds of the state's motorists would face rate increases if insurers were no longer allowed to charge higher rates in high-risk neighborhoods.
Highest and Lowest
According to the Western Insurance Information Service, the highest rates in the state are paid by residents of San Francisco and parts of Los Angeles; some of the lowest by residents of Santa Barbara and San Diego.
Wayne Wilson, manager and general partner of Insurance Sales and Service in El Monte, said the San Gabriel Valley has historically benefited from low rates dating to a time when companies set one rate for nearly the entire area. Now that companies are analyzing their claim losses by ZIP code area, he said, small rate differences are emerging within the San Gabriel Valley, but "not enough to get excited about."