Despite my post earlier this week about ratings for auto insurance and the value of zip codes, Commissioner Garamendi has proposed changes to how insurance rates will be set.
Apparently, Mr. Garamendi believes that zip codes should not carry any more weight than driving record, average annual mileage and years of driving experience. Clearly these three categories are important. But, zip code is important as well.
What is the likely effect? Probably none for a few reasons. First, the legislature probably will not enact any reforms. Second, the governor would not sign anything that might upset the insurance companies. Third, Garamendi is looking for press right about now, not results. These three things all have one thing in common: it is an election year in California in 2006 and this is more political posturing.
I would suggest that Mr. Garamendi start looking at making real changes to how insurance claims are handled, how people are dealt with by insurance companies, and how the insurance companies continue to make huge profits. Anything short of that is just political posturing for his next job.