Insurance Rates

Insurance industry representatives Thursday unveiled a proposed 1988 ballot initiative that would institute a sweeping no-fault system in California automobile insurance, giving policyholders an average 20% rollback in liability premiums and freezing the rates for two years. Under the plan as submitted by an alliance of the state's leading insurance agents and company associations and its largest insurance lobby, most lawsuits in automobile accidents would be banned.

Gender matters to auto insurer Mercury General Corp., while Farmers Insurance Exchange cares more about marital status. And at Automobile Club of Southern California, the people setting the rates look closely at how many vehicles you want to insure. California's biggest auto insurance companies use a variety of factors to set rates, and no two are exactly alike in how they weight them.

George Joseph has always had a head for numbers. In World War II, he navigated a B-17 bomber through 50 combat missions. After the war, he earned a degree in mathematics and physics from Harvard. And the company he launched in 1962, Mercury General Corp., pioneered the use of ZIP Codes and other data in fine-tuning auto insurance rates.

Title insurance, an expensive and often confusing home-buying requirement that costs people $17 billion each year, came under congressional scrutiny Wednesday over allegations of kickbacks and other abuses. Premiums can account for as much as one-third of the closing costs in purchasing a home. The more expensive the property, the higher the premium. The average title policy in California, for example, runs about $1,400.

A growing number of American workers at companies offering health insurance are turning it down because of a 42% jump in recent premiums, a nonpartisan health think tank said Thursday. The Robert Wood Johnson Foundation said 3 million fewer workers eligible for employer-sponsored health plans enrolled in 2003 compared with 1998.

It may be payback time this summer for Insurance Commissioner John Garamendi. And Wednesday he came out swinging at the state's insurance industry after emerging victorious from this week's Democratic primary election for lieutenant governor. He blasted the industry's $2 million of preelection advertising attacking his proposal on auto insurance rates and vowed to move quickly this summer to hold hearings aimed at slashing homeowners' insurance bills.

Rate increases for health maintenance organizations are set to decline in 2007 for the fourth consecutive year, but still create challenges for employers, according to a report released Tuesday. Preliminary figures indicate that HMO rates will jump 11.7% next year, down from initial estimates of 12.4% in 2006 and 13.7% in 2005, said Hewitt Associates, a consulting firm based in Lincolnshire, Ill.

California Insurance Commissioner John Garamendi ordered four big insurers Wednesday to justify their home insurance rates, saying he would order cuts if the charges were found to be too high. Garamendi said a Department of Insurance study found that the four companies -- State Farm, Allstate, Farmers and Safeco -- paid out in claims less than 50 cents of each premium dollar taken in last year.

In a move that could presage lower auto insurance premiums for many of California's 23 million drivers, the state's fourth-largest provider has agreed to base its rates on how safely and how much its customers drive rather than primarily on where they live. The plan, to be announced today by the Automobile Club of Southern California and California Insurance Commissioner John Garamendi, would slice as much as $133 million from the annual bills of the club's nearly 1 million policyholders.

Major auto insurers said Monday that they would not back down from a threat to sue California's insurance commissioner over proposed new rules on how drivers' rates are set. Associations that represent several of the state's largest insurers said they would continue to weigh legal challenges to regulations that would compel them to set rates according to Proposition 103, which mandated that motorists' safety records and driving habits should matter more than where they live.