The move would be the first major reform to group discounts since California voters approved Proposition 103 in 1988, the department reported. The revisions include:

Reducing barriers to the creation of new groups for lower-income drivers. The revised draft regulations require that insurance companies offering group discounts make sure they are available to drivers at different income levels who have similar driving experience.
Increasing incentives for the creation of new groups for underserved communities. The revised draft regulations were improved by adding an incentive system whereby insurers that excel in writing policyholders from underserved socio-economic communities will receive a small increased allowance in their expense calculation to account for the added costs of making this effort.
Increasing public awareness of available groups. Currently, insurance companies must provide a list of all available discounts to every new policyholder at every renewal. The revised draft regulations now require that all of an insurer's available group plans must also be included in this list to help drivers avail themselves of discounts they may be entitled to but not aware they presently exist.

While around 25% of California drivers receive a group premium discount, ranging from 1.5% to 25.9%, the study found that participation in these types of group programs decreases with declines in income and education levels. Drivers in ZIP codes with average per capita income above $49,000 are twice as likely to receive discounts as those in ZIPs with average per capita income of $22,500 or below, according to the California Department of Insurance, which notes in some high-income districts, participation can be three to four times higher.

Special Reports /

Cali. mulls extending group discounts to lower-income drivers

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