That wise-cracking Geico gecko has just been served a heaping slice of humble pie, courtesy of the state of California.

Recently, Geico asked the California Department of Insurance (CDI) for permission to raise rates on drivers by 4 percent. But the nonprofit Consumer Watchdog got a whiff of the proposal and barked.

Using a state law known as Proposition 103 – which allows citizens to challenge excessive insurance rates – Consumer Watchdog protested the rate-hike request, saying Geico improperly estimated future claims costs.

The upshot for Geico? The insurer that famously promises to save you "15 percent or more" agreed to lower car insurance rates by an additional 10.7 percent beginning Aug. 15, saving California drivers $91 million in annual premium costs, according to the CDI.

5 reasons insurance rates are sinking

Consumer advocates hailed Geico's about-face in California as another Proposition 103 success story. 

"There is no doubt that Prop 103 is the prime reason consumers have enjoyed low auto insurance [rates]," says Robert Hunter, insurance director at the Consumer Federation of America. 

But Pete Moraga, spokesperson for the Insurance Information Network of California, doesn't quite see it that way.

"If Prop 103 has had such a great impact for consumers, why hasn't a similar law passed in any other state of the union?" he asks.

Moraga says five other factors deserve most of the credit for helping make auto insurance more affordable in California.

"You can't look at one thing in vacuum. You have to look at the whole picture," Moraga says. "And these things have had as great an impact in lowering rates as anything else."

The factors include:

1. Fewer auto lawsuits. In 1988, the California Supreme Court rejected its own 1979 decision – commonly known as Royal Globe – that allowed third parties to sue insurers directly for bad faith acts, such as misleading policyholders or falsely adjusting claims.  Critics said Royal Globe was responsible for an avalanche of frivolous litigation. In the first 10 years after Globe was overturned, auto-related lawsuits fell statewide from 91,000 to 42,000, according to Moraga.
2. Safer cars. Technology ranging from air bags to automatic stability control systems has made cars safer. As a result, accidents have become less deadly. In 2009, California highway fatalities fell 10.3 percent to their lowest level on record, according to the California Office of Traffic Safety.
3. Stronger drunk driving laws. In the 1980s and 1990s, California passed a series of stiff penalties for drinking and driving, making roads safer.
4. Greater efforts to combat insurance fraud. As in other states, California prosecutors and law enforcement have joined forces with insurers and organizations such as the National Insurance Crime Bureau to aggressively root out and prosecute cases of insurance fraud.
5. Passage of "no pay, no play" legislation. In 1996, California voters passed Proposition 213 – the so-called "no pay, no play" initiative.  Under the law, uninsured motorists can receive only actual damages – such as medical care and lost wages – and cannot sue for pain and suffering compensation related to injuries suffered in an auto accident caused by an insured driver. 

Proposition 103: 'Remarkably effective'

Hunter agrees that several of the factors Moraga cites likely have played a role in reducing car insurance rates in California. But he authored a 2008 study examining the impact of Proposition 103 that concluded the law has been "remarkably effective," saving California policyholders $61.8 billion since it was passed in 1988.

Hunter says he adjusted for factors such as "no pay, no play" laws in his study, and California still led the nation in having the best regulatory system for protecting auto insurance policyholders.

"Prop 103 deserves great credit – by far the most credit – for the results in California," he says. "Excellent regulation works."

Whatever the real reasons for the drop in California rates, it's clear that the Golden State is not alone. Between 2004 and 2008, average annual insurance costs dropped steadily across the entire United States, from $843 per driver to $789, according to the National Association of Insurance Commissioners.

During that time period, just four states – Louisiana, Nevada, Washington and Wyoming – saw costs rise.

Moraga says "changes in auto manufacturing have saved countless lives" – lowering the rate of injuries and accidents and "thus, lowering the costs of auto insurance."