If a 42-year-old married man moved a few blocks from North Long Beach to Compton last November, the insurance premium for his 1981 Dodge Colt would have jumped from $650 a year to $1,518.
If the same man had moved to Downey, Bellflower, Paramount, northeastern Long Beach or most of Lakewood, his Automobile Club of Southern California insurance would have remained at the original $650 rate.
But if he had lived in Whittier or Cerritos, the fee would have been $717, and in Long Beach's downtown and Belmont Shore areas it would have been $816. In Huntington Park it would have been $1,006, and in Lynwood, $1,107.
That the same driver with the same car and driving record would pay such widely varying premiums because of where he lives was underscored last week by the first state survey of Los Angeles County insurance rates since 1978.
The survey, which sampled rates of 18 companies that write 75% of California's insurance, also found that premiums varied sharply from company to company.
State officials cautioned that the survey should be read only as a general indicator of premiums, since special features or discounts may not have been reflected in its figures.
Nowhere were company-to-company rate differences seen more clearly than in the Long Beach and Southeast areas. Data on four different types of drivers showed that residents with good driving records can often cut their premiums at least in half by buying insurance from companies that specialize in low-risk policies.
For example, a 23-year-old single woman from South Gate, who drives a 1984 Ford Mustang L and had no tickets or accidents, could have paid $567 for a 20th Century policy last November. A similar policy from the Automobile Club would have cost $927, State Farm $1,209, Allstate $1,525 and Farmers $1,545. (Those companies are the five largest writers of private auto policies in Los Angeles County.)
The same 23-year-old woman could have paid as much as $2,815 for a Farmers policy in Compton or as little as $464 for 20th Century coverage in Artesia-Cerritos, La Mirada, Norwalk, Santa Fe Springs and Whittier.
City-to-city rate disparities are the result of an insurance industry system that sets premiums based on claim losses in a specific area. Statewide, this system has meant that residents of poorer communities often have been charged more for insurance than those of wealthier ones. Rates are also far lower in rural areas. The state's highest rates are in Los Angeles County.
Legislative backers of a change in this system have argued that it penalizes those least able to pay for insurance, regardless of their driving records.
Great Discrepancy Cited
Everett Brookhart, consumer affairs chief for the state Insurance Department, said last week that his department is no longer satisfied with the present system. He said the discrepancy in prices is now so great that many residents of poor communities cannot afford to buy insurance, as is required by law.
A bill introduced last week by state Sen. Art Torres (D-South Pasadena) would base premiums on a driver's record. The Insurance Department is studying the same alternative, Brookhart said. The department is also analyzing a change that would establish a "bare-bones, no-fault" liability policy for all motorists at a flat rate, he said.
The Insurance Department will send its full Los Angeles County rate survey to anyone who sends a self-addressed, 9x12 envelope with stamps totaling 70 cents to: Department of Insurance Rate Survey, 600 S. Commonwealth Ave., Los Angeles 90005.