Insurance Commissioner John Garamendi proposed changes he said would make insurance costs more equitable by tying rates to drivers' records, how long they've been driving and how many miles they drive a year -- instead of ZIP codes.

Rates would likely drop in big cities, where people cover fewer miles and have paid a higher price for living in more congested, risk-prone neighborhoods. But rates would rise in the remote countryside, where a trip to school or work can mean hours behind the wheel.

"We're rural, rural, rural," said Inyo County Supervisor Linda Arcularius, pointing out that her county has only 10 stoplights over 10,000 square miles. "Our risk is just so low."

The plan, announced in December, is supported by Los Angeles and San Francisco city governments, the National Association for the Advancement of Colored People and consumer groups.

"This is, we hope, the final lap in a long race to fix a broken system in California , and base it on how you drive, and not where you live," said Mark Savage, attorney with Consumers Union, who spoke before a public hearing on the proposal.

Minorities living in lower-income urban neighborhoods have long complained of being penalized by the current system, and many were on hand to describe how living in the "wrong'' neighborhood can mean sky-high rates, even for drivers without an accident to their name.

"It's time to end socioeconomic discrimination in the auto industry," said Henry Rosales, with the Spanish Speaking Citizens Foundation.

Proponents of the change said it was time the state implemented the changes described in Proposition 103, approved by voters in 1988, which asked insurers to give more weight to a driver's safety record and experience instead of gender, marital status, ZIP codes and other factors currently used to calculate rates.

"The aim is to increase fairness and reward consumers with good records," said Bryant Henley, staff counsel with the California Department of Insurance.

Insurance companies don't think the new plan would accurately reflect the risks drivers face, making the pricing system less fair and going against the intentions of California voters.

"You find that you're now subsidizing one set of individuals through another, and that's not fair," said Kate Diehl, legislative advocate for Association of California Insurance Companies.

Farmers and officials from rural communities also opposed the proposal.

If the idea is to avoid taxing minorities, the state commissioner should make sure rates don't go up in rural counties, where immigrants gravitate toward farm jobs, officials from rural areas said.

Most of Imperial County 's residents are minorities, and the southern California county has the state's highest unemployment and poverty rates, said Supervisor Gary Wyatt.

"This will hit our people even harder," he said.

The public comment period on the proposed changes was extended to March 6.

(Article taken from Insurance Journal)