‘87 Auto Insurance Survey Still Shows Wide Disparity in Rates
The state Insurance Department on Wednesday released its 1987 statewide comparative survey of auto insurance rates and, as in the first survey last year, the figures show a wide variation in what Californians pay for auto insurance, depending on where they live and what company they buy from.
For example, the same policy purchased from State Farm, the state’s largest auto insurance seller, that cost a South-Central Los Angeles couple an annual premium of $2,270 this past July 15 would have cost a Canoga Park couple $1,503, a Costa Mesa couple $994, a San Diego couple $799, a Bakersfield couple $724 and a Shasta couple $620.
This reflects the so-called “territorial rating†system of marketing auto insurance under which those who live in more congested areas where there are more accidents and higher claims pay more than others.
But even within the same neighborhoods prices can vary sharply depending on what insurance company one chooses, or, as is often the case, which company is willing to sell a policy.
In the same Canoga Park neighborhood in the San Fernando Valley where State Farm would charge one of the sample couples listed in the Insurance Department’s survey an annual $1,503, Farmers would charge $1,611, Allstate $1,732, 20th Century $1,262, Mercury’s preferred company $1,122, Geico $1,651 and Hartford $2,304.
In the Orange County city of Costa Mesa, where the State Farm price to the example couple would be $994, Farmers would charge $1,031, Allstate $980, 20th Century $856, Mercury’s preferred company $728, Geico $1,024 and Hartford $1,314.
15 Companies
Altogether, the Insurance Department survey listed 15 different companies and their prices in 10 localities, designed to show the variety that exists in prices between different communities and companies.
Last October, when the department issued its first survey, it was criticized because the samples it chose reflected drivers buying state-mandated minimum policies, and, accordingly, the prices quoted struck many people as too low.
In the survey released Wednesday, the department selected for one of its samples a couple buying a more complete policy that is typical of the buying patterns of most California motorists.
The other sample chosen dealt, as did the sample last year, with a couple buying the state-required minimum liability insurance, with no coverage for collision or theft. Such purchases are not all that common, since most people owe money on their cars and the lenders require them to purchase collision and theft insurance, or what is known as comprehensive.
In a statement accompanying the survey, Insurance Commissioner Roxani Gillespie cautioned consumers that they would not in most cases fit the samples so they would not be able to buy a policy for the amount listed, even if they lived in the specific zip code.
“No rating example would fit a majority of California’s policyholders,†Gillespie said. “However, the simplicity of our example allows for comparison among many insurers and reduces the chance of (interpretive) error.â€
The more typical sample cited involved a 45-year-old married couple with no violations or accidents on their three-year driving record kept by the state Department of Motor Vehicles.
The couple cited would own a 1987 Oldsmobile Cutlass with six cylinders, four doors and automatic transmission that cost $12,728 new, and was driven to and from work by the couple 20 miles one way and ran up an annual mileage of more than 15,000. Only one car would be insured.
The coverage would include a $100 deductible for comprehensive and a $200 deductible for collision, liability coverage of $100,000/ $300,000/$50,000, or a combined single limit of $300,000 for bodily injury and property damage, medical payments of $5,000 and uninsured motorist coverage of $30,000/$60,000 or a combined single limit of $60,000.
The other sample was of a couple of the same age but owning an older car, commuting a shorter distance, driving less each year and buying only the state-required liability insurance of $15,000/$30,000/ $5,000 bodily injury and property damage, plus minimal medical and uninsured motorist coverage.
The department noted that more than 200 companies insure autos in the state. It said the 15 selected companies are among the largest sellers.
Two of the companies included in the survey, USAA and California Casualty, sell only to restricted groups. The listed Mercury company, whose rates often are among the lowest in the survey, is a preferred sales company not available through all Mercury Casualty agents.
The other companies listed were the Auto Club, State Farm, Farmers, Allstate, 20th Century, Geico, SAFECO, Ohio Casualty, Nationwide, Aetna, Hartford and Liberty Mutual.
Some of these companies have tried to explain their apparently higher-than-average rates in the past by saying they offer special discounts to certain drivers that are not included in the sample package provided by the Insurance Department.
Gillespie, for her part, cautioned those reviewing the survey that both samples listed were for so-called ‘good drivers’ of mature age.
“Inexperienced drivers, or those with tickets or accidents, would pay a higher premium,†she noted.
In short, those in South-Central Los Angeles paying between $1,742 and $3,462, depending on what company they purchase from, would probably be paying far more, regardless of company, if they had accidents or citations on their records.
COMPARING AUTO INSURANCE COSTS
The state Department of Insurance assembled this comparison of auto insurance rates by locality. The department warned that factors affecting premiums are extremely varied and that this was a survey, not a catalogue, of insurance premiums. Rates given here are for a 45-year-old married couple with no violations or accidents, driving a 1987 Oldsmobile Cutlass, 6 cylinder, four door, automatic, costing $12,728 new. They drive it to work 20 miles one way and their annual mileage is over 15,000. Only one car is insured on the policy. Deductibles are $100 comprehensive and $200 collision, and the policy includes liability coverage of $100,000/$300,000/$50,000, or a $300,000 combined single limit for bodily injury and property damage, $5,000 in medical payments and uninsured motorist coverage of $30,000/$60,000, or a combined single limit of $60,000. These 15 companies sell most private preferred auto insurance in the state. Their rates--these were in force on July 15--may reflect some differences in coverage. In general, all rates vary by such factors as age, sex, type of car, commute and driving record, in addition to home address.
San San Bakers- Canoga Insurer Shasta Francisco Mateo Fresno field Park (96087) (94102) (94401) (93701) (93301) (91303) Auto Club 861 1,746 1,114 1,027 891 1,566 State Farm 620 1,296 782 846 724 1,503 Farmers 680 1,557 833 884 747 1,611 Allstate 748 1,356 844 973 771 1,732 20th Century 668 1,158 754 792 690 1,262 USAA (military) 711 1,303 826 881 788 1,364 Mercury* 602 1,670 736 680 746 1,122 Cal Casualty** 635 1,291 767 847 711 1,467 Geico 672 1,167 774 836 739 1,651 SAFECO 696 1,320 797 776 720 1,554 Ohio Casualty 759 1,393 833 854 777 1,680 Nationwide 742 1,544 919 997 851 1,776 Aetna 996 2,320 1,074 1,098 1,022 1,600 Hartford 1,114 2,896 1,354 1,292 1,302 2,304 Liberty Mutual 720 1,628 934 1,012 849 1,904
Insurer Los Angeles Glendora Costa Mesa San Diego (90011) (91740) (92626) (92101) Auto Club 2,236 944 1,012 828 State Farm 2,270 1,004 994 799 Farmers 2,755 655 1,031 739 Allstate 2,610 1,077 980 827 20th Century 1,796 916 856 632 USAA (military) 1,978 893 905 695 Mercury* 1,742 758 728 672 Cal Casualty** 2,437 985 951 753 Geico 2,063 1,130 1,024 826 SAFECO 2,476 941 913 742 Ohio Casualty 2,659 1,167 1,024 844 Nationwide 2,687 1,179 1,151 948 Aetna 2,651 1,246 1,061 924 Hartford 3,462 1,606 1,314 1,296 Liberty Mutual 2,942 1,230 1,196 958
* Premiums are for Mercury Insurance Co., not available through all Mercury Casualty agents. ** California Casualty is primarily available through employee groups and is not available to the general public.
