The insurance industry’s rate structure is blatantly discriminatory, and, in basing rates on zip code and ethnicity, it fails to take advantage of the largest market opportunity in the state.
So said California Insurance Commissioner John Garamendi, speaking to Alameda Rotary Club members Tuesday.
"It’s flat-out discriminatory" that rates are based on zip code and ethnicity, not on the individual person, home or car, said the not-formally-declared 2006 candidate for lieutenant governor.
"Insurance should be affordable, available and able to pay claims in a fair and quick way," he said. "Unfortunately it doesn’t always happen that way."
Garamendi is pushing for insurance legislation that would have the same effect as the Community Reinvestment Act does on banking — requiring investment in communities of all economic levels.
"The single biggest market is underserved communities in America," he said. "(The industry) is ignoring the Latino community in California. With 25 to 30 percent of the population, it’s a big-time opportunity. The same is true for African-American and Asian communities."
He chastised the industry for needing a "kick" from the commissioner to enter those markets.
Garamendi is also pushing a home owners’ bill of rights that would end the industry’s "use it and lose it" procedures, in which insurers drop policies or raise rates for customers who make an insurance claim.
"The risk isn’t any higher" after a tree falls on a house," he said.
Holding a copy of the disaster preparation DVD released the night before by the Red Cross, AP&T and the fire department, he praised Alameda’s effort to raise awareness and encourage preparation.
He also pushed for more home owners to buy earthquake insurance.
"Alameda is a risky place; it’s not on the most stable soil," he said. About 60 percent of home owners don’t have enough insurance to rebuild "if you have a wipe-out," he said. Just 13 percent of California homes and less than 20 percent of Bay Area houses are insured for earthquakes, he said.
Source:http://www.mercurynews.com/
