Insurance Rates

Insuring a car is about to get a little cheaper for many Southland motorists. The Automobile Club of Southern California, the state's fifth-largest car insurer, is expected to announce a 5.4% rate cut today that will save 1 million customers an average of $100 per vehicle. The new rates become effective April 1 for new policies and those renewed on or after that date. The auto club cited a drop in policyholder loss claims during the last two years as well as its tight controls on operating expenses for creating the flexibility to lower premiums.

It might have looked as if real progress toward healthcare reform was made last week when leading insurers proposed ending their long-standing practice of charging higher rates to sick people and denying coverage to those with chronic conditions. But not so fast. A closer look at the insurance industry's plan reveals a potentially huge loophole that could short-circuit genuine reform.

California Insurance Commissioner Steve Poizner proposed emergency changes Monday to regulations that help determine rates for auto and homeowner policies, saying the changes would "help speed lower insurance rates to consumers." The proposal would make changes to the formulas used to set rates. These changes would require insurance companies to show premium trends over the last six years. Under the current regulation, they must show trends going back three years.

Elaine Farrell deals with insurance forms and rules every day at the dental office where she works. But she recently found out that she's as much a novice as anyone else when it comes to general health insurance. ? Her oldest daughter, Kristen, turned 23 last week and was booted off her parents' medical plan. The insurance company had mailed a notice about the impending change in status only a month earlier, sending Mom into panic mode. ?

Mercury General Corp., a Los Angeles-based low-cost insurer, today is expected to announce rate cuts for about 1.7 million of its automobile and homeowner insurance customers, mainly in Southern California. Most of the cuts will go to automobile policyholders and, perhaps, offset at least a little pain from weekly hikes in gasoline prices. The owners of 1.5 million cars will shave 3% off their annual bills, about $30 per vehicle, according to the California Department of Insurance.

Getting too much junk mail touting low automobile insurance rates? Being bombarded by television commercials featuring a cute gecko? ? Think of them as opportunities, not just irritations. ? California is enjoying a buyer's market for auto insurance. And consumers can find bargains -- whether they comparison shop, pick up the phone, check out the Internet or just ask around. ?

Allstate Corp., the state's third-biggest home insurer, must slash its annual premiums by more than one-quarter, saving more than 850,000 customers about $250 apiece. The rate reduction, to be announced this morning in Los Angeles by state Insurance Commissioner Steve Poizner, marks the end of a battle of more than two years between state regulators and Allstate. The company covers about 1 in 7 homes, condominiums and rental units insured in California.

California Insurance Commissioner Steve Poizner has quietly dropped an effort to seek refunds for Allstate Corp. policyholders who might have paid too much for their homeowners' coverage in recent years. Critics immediately denounced his decision. On July 10, Poizner announced that Allstate had been ordered to slash its homeowners' rates by 28.5% for policies that begin or renew after July 30.

It's the peak of what is now a year-round fire season. And throughout Southern California, homeowners in blaze-prone regions are having a hard time finding fire insurance. Tens of thousands of homes are in the region's brushy canyons, with still more under construction.

As if plummeting real estate values weren't enough, insurance rates are heading up for many California homeowners. State Insurance Commissioner Steve Poizner late last month quietly approved rate-increase requests from two of the state's three largest homeowner insurance companies. No. 1 State Farm Mutual got the go-ahead for a 6.9% increase, its first in five years, while rates at third-place Farmers Group Inc. will rise 4.1%. A similar request for a 6.9% increase from No. 2 Allstate Corp.