Insurance in California
most populous state in the U.S. (about 37 million people as of 2009);
13% of the GDP of the total GDP of the United States (as of 2006, only eight countries in the world's GDP had more than one California);
- The greatest (of all fifty states), the number of people who have driver's license – 23,697,667 as of 2008, that is, two out of three residents of the state, including the elderly and infants;
168,076 kilometers of public roads.
The most powerful state of the strongest economies in the world, heavily urbanized, covered by a dense network of roads, which moves the number of cars comparable to the all-Russian, of course, is of interest in terms of its insurance unit.
California Department of Insurance (California Department of Insurance, CDI) was founded in the early 1900s and has since firmly stands on protecting the interests of state residents. Currently, the Department issued a license to operate more than 1500 insurance companies and approximately 340,000 agents and brokers. The state agency is made up of 1,300 people. Livelihood CDI are various charges, including royalties. Learn more about KOBELCO spare parts catalog!
The key point in the recent history of insurance in the state was adopted in 1988 Regulation № 103 (Proposition 103), which radically changed the role of CDI and set the rules of the game. Prior to the adoption of Regulation 103 Commissioner – head of CDI – appointed by the governor, but now it is selected residents of the state.
Prior to the adoption of Regulation 103 CDI carries out its functions in accordance with the Insurance Act McBride – Grunsky (McBride-Grunsky Insurance Regulatory Act), under which insurance companies were not required to justify the rates of insurance rates, except life and health insurance. At that time, California was considered a state of "open competition", where the act only market mechanisms. Division of Consumer Services (Consumer Services Division) was obliged to follow (and only!) To see how insurance companies formed their own tariffs. December 16, 1988 in the framework of the tariff control unit was established, responsible for the following provisions of paragraphs 103:
Reduction of rates
All insurance companies have been obliged to reduce their tariffs by 20% compared with the current at the end of 1987. An exception was made only for those insurers that this reduction would lead to bankruptcy. However, subsequently, the provisions of paragraph 103 was amended by the Superior Court of California to allow insurance companies to get a fair return, that is, in each case, the decline was an individual.
In the calculation of the cost of insurance should affect three important factors:
- History of a particular driver's driving (driving safety record);
- The number of miles, overcoming the insured while driving;
- The driving experience.
Additionally, the Commissioner may add a few other factors, which in a particular case could affect the probability of loss occurrence.
Discounts careful drivers
The provisions of careful drivers 103 recognizes those who have the driving experience of at least three years, the last three years has not more than one penalty point on their license, and was chiefly responsible for accidents that result in a person's death, total loss vehicle or property damage to more than $ 500. So the drivers insurance company must provide no less than 20% reduction compared to the rate for "normal" driver.
Approval of rates
With the "market insurance" is over, insurers are now required to approve all insurance rates with the insurance commissioner, and as rates on new programs and changes to existing ones.
Any California resident can subscribe to the California Department of Insurance to find out which rates which companies approved by officials. Free of charge, paper copies are sent a list of approved tariffs. To see an example of such a copy online here.
Time for reflection
The new tariffs are approved sixty days after they were published, except for three cases:
- The consumer or consumer group within 45 days after publication requested a public hearing on the new tariffs, and insurance commissioner gave them the good (if he refuses, he must justify its refusal in writing);
- Commissioner's own initiative, decides to appoint a hearing;
- The proposed final tariff rate exceeds that (other insurers) for more than 7% for the insurance to individuals and more than 15% for insurance entities. Facilities for public hearings are in San Francisco and Los Angeles.
Regulation 103 governs not only the car insurance, but even private homes, and insurance, inland marine transportation, commercial aircraft, the liability of doctors and other professions insurance against earthquakes, fire, theft, etc.