Gilroy drivers may see their insurance bills increase by 11
percent, while some San Jose rate payers should expect a drop of as
much as 6 percent, thanks to new rate hikes proposed by the
California Department of Insurance.
Gilroy – Gilroy drivers may see their insurance bills increase by 11 percent, while some San Jose rate payers should expect a drop of as much as 6 percent, thanks to new rate hikes proposed by the California Department of Insurance.
The new rates primarily affect rural areas, such as Gilroy, where car thefts, uninsured motorists and dangerous roads are more prevalent than in urban locales.
“Uninsured motorists is extremely high,” in the Gilroy and Hollister areas, said Serena Rojas, an insurance associate for State Farm Insurance in Gilroy.
Actually, the numbers are so high that the odds of hitting an uninsured driver are way higher than the chances of being involved in an accident with an insured driver, she said.
“Most often people will just hit and run,” Rojas said.
She recently had a client move to a small town and he was angry to learn that his rates had risen, but Rojas explained to him that in a rural area there are more two-lane roads, such as Highway 25 which leads to Hollister, and wildlife that can damage vehicles.
But California Farm Bureau Federation Spokesman Dave Kranz said the increases force rural and suburban drivers to subsidize rate decreases for urban drivers. Also, rural drivers, who on average have lower incomes than urban residents, will bear the brunt of the insurance burden, he said.
Kranz said the main factor isn’t simply that rates are increasing, but that the new proposal waters down geography, which often deflates costs. Currently, insurance companies calculate rates using three primary factors including driving record, estimated mileage and experience behind the wheel, he said.
“Where you live has a big impact on how likely you are to file an insurance claim,” Kranz said. “If you live in an area with more traffic the odds of bumping into a car are higher.”
If you’re involved in an accident in an urban area, the cost to repair a car and health care costs are likely to be much higher, he said. Also, if geography is discounted then there will be more of an emphasis placed on mileage which would penalize rural and suburban drivers who put lots of miles on their vehicles.
Under the new proposal auto insurance rates would rise in 52 of California’s 58 counties, according to the results of a study conducted by the CDI.
A public hearing will be staged by CDI on Feb. 24 at 10am at 45 Fremont St., 22nd floor in San Francisco.
