Settlement of Lawsuits With Auto Club Affiliate Announced
Santa Monica, CA -- The insurance affiliate of the Automobile Club of Southern California (the Interinsurance Exchange of the Automobile Club) will issue $22.5 million in refunds to approximately 120,000 policyholders to resolve lawsuits brought by The Proposition 103 Enforcement Project, a project of the non-profit Foundation for Taxpayer and Consumer Rights (FTCR), and Los Angeles resident Tracy Landers. The suits, filed in Los Angeles County Superior Court in January and September 2002 under the state's Unfair Competition law, each alleged that the Exchange improperly surcharged previously uninsured drivers and others who could not demonstrate proof of prior insurance when they applied for coverage.
Under the terms of the settlement, the affected policyholders will receive refunds averaging $187.
The Exchange disagrees that it engaged in the alleged practice, and has asserted and continues to assert that it acted properly and within California law. Nevertheless, in the interest of avoiding added legal expense and protracted litigation, the Exchange decided to resolve the actions for the benefit of its policyholders. The company will also pay the legal fees and costs of bringing the suits.
"We are pleased that the Exchange has agreed to settle this lawsuit by providing refunds for these surcharges," said consumer advocate Harvey Rosenfield, author of Proposition 103 and one of the attorneys representing FTCR.
Affected consumers -- people who purchased auto insurance policies from the Exchange between April 1, 1999 and July 31, 2004 and were allegedly surcharged because they did not previously carry auto insurance -- will receive information about the settlement by mail.
The Proposition 103 Enforcement Project and Ms. Landers were represented by FTCR attorneys Harvey Rosenfield, who authored Proposition 103, and Pamela Pressley, FTCR's Litigation Director; Ted Pintar of the law firm of Coughlin Stoia Geller Rudman & Robbins LLP, and former Missouri Insurance Commissioner Jay Angoff.
- 30 -
 Insurance Code section 1861.02(c) states that: "The absence of prior automobile insurance coverage, in and of itself, shall not be a criterion for determining eligibility for a Good Driver Discount policy, or generally for automobile rates, premiums, or insurability."
1/29/2014News ReleaseCitizen Groups Petition Insurance Commissioner Jones to Stop Auto Insurance Surcharges Based on Occupation and Education LevelSanta Monica, CA - Fourteen non-profit citizen, consumer and low income advocacy organizations today formally petitioned... More >
2/27/2014News ReleaseConsumer Watchdog Challenge to Farmers’ Auto Rate Filing Seeks to Enforce Proposition 103’s Good Driver Discount Policy MandatesSanta Monica, CA - Consumer Watchdog petitioned the Insurance Commissioner this week for a public hearing on the “new... More >
1/12/2014News StoryThe following Op-Ed Commentary was published in the Sacramento Bee on Sunday, January 12, 2014. ----------------- No political... More >
1/29/2014News StoryAutomobile insurance companies would be banned from using motorists' occupation and education levels in establishing... More >
1/30/2014News StoryInsurance companies are all about managing risk -- especially the risk to their bottom line. We understand why insurers charge... More >