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We recently lost a long-time client who became very upset that her insurance company took away her good driver discount. “How could they do that to me? I’ve been with them for many years, always pay my bills on time, and have never filed a claim! Why does my company hate me”?

Well, first of all, the insurance company didn’t take away your good driver discount (and they don’t hate you). They have absolutely no authority to do so. The 20% good driver discount was created as part of Proposition 103 which the good people of California (mostly in Los Angeles and San Francisco) voted to approve back in 1988. I tried to warn my clients in San Diego County back then not to vote for Prop 103 because those of us living in San Diego County would end up subsidizing the rates in LA and San Francisco but that’s another topic for another blog.

In other words, the good driver discount and the way it is administered by the various auto insurance companies are dictated by the State of California and the Department of Insurance. It is state law. The insurance companies have no say into how it will be administered or who will or who won’t receive it. It’s really that simple.Driver and passenger giving "thumbs up"

So how does it work? Simply put, a person must have had an active driver’s license for at least three years and their driving record must be verifiable. The driver is allowed one minor violation or one at-fault, no-injury accident within the past three years and no DUI’s within the past ten years. If a driver has been licensed for less than three years, their driving record cannot be verified for the past three years of experience, they have two or more minor violations within the past three years, they have an at-fault with injury accident within the past three years, or even if they had a DUI nine years ago, they don’t qualify for the state mandated 20% good driver discount.

What happened with my client is one aspect of the rules of Proposition 103 and the administration of the good driver discount in which I don’t totally agree with. Over the years, we have had clients who have had their driver’s licenses suspended for thirty days or more due to medical conditions. This could be a seizure or a blackout which the law dictates results in the loss of driving privileges for at least thirty days.

Sometimes, I understand why a client had to suffer a license suspension and at other times, it seemed to me to be a harsh punishment, especially considering the financial consequences in higher auto insurance premiums which can be significant. But these are the rules in which we must abide by with no exceptions.

Back to the client we lost….various members of our staff including me have had numerous conversations with her about why her discount was removed and why we were unable to place her in a preferred driver program that only accepted “Prop 103 good drivers”. We also explained that her auto insurance company had nothing to do with her losing the discount. We also explained that her company is one of the few preferred companies which also has a standard program which was perfectly suited for her but the explanations that were given by me and my staff many times fell on deaf ears. 

So, the client moved on to somebody else and will experience the same problem since all auto insurance companies in California must go by the same rules.

Facing consequences can be rough to accept. Many people put themselves into a situation where their premiums are high due to driving record activity. I refer to that as being self-inflicted. Losing the good driver discount and paying at least 20% more due to some medical issues is more of a grey area in my mind but for now, it is what it is.

--Ken May

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