A proposed regulation that would restrict an insurance company’s access to information about accident history would make it difficult for California carriers to be certain that an individual is entitled to a good driver discount policy according to the National Association of Independent Insurers.
“An insurance carrier’s right to ask a driver for additional information about his or her accident experience is necessary for the fair administration of the good driver discount policy,” Sam Sorich, vice president and western regional manager of the NAII, testified.
“Without access to complete information, drivers with poor accident histories would be able to purchase the good driver policy—a benefit they do not deserve,” Sorich went on to say. “On the other hand, drivers who properly qualify for the good driver discount policy would have to pay more to subsidize risky drivers. If the California Department of Insurance adopts the proposed restriction on insurer requests for information, it will authorize unfair discrimination.”
According to the NAII, the proposed regulation would force an insurer that is trying to determine a person’s accident history to accept a person’s own declaration about whether or not he or she was at-fault in a prior driving accident. Mandating that insurers rely on a driver’s statement could prevent companies from asking the driver for further information about his or her accident history.
“This type of self-verification is not sufficient proof of accident history to determine eligibility for the good driver discount policy,” Sorich added. “It also works against Proposition 103, which requires rates be based on risk of loss. To accurately peg whether a person is a safe or risky driver, it is critical that accident history is complete and accurate—which often requires requests for further information from drivers.
“Good driver discount eligibility should be based on accurate information about accident history, and the Department should avoid whittling away access to such data,” Sorich said.
Topics California Carriers Legislation
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