Some consumer groups are cheering the decision, saying it will mean lower rates for good drivers. However, groups like the Regional Council on Rural Counties and insurance industry representatives contends the regulations will result in higher rates for suburban and rural residents while giving decreases only to a few large urban areas like Orange County and San Francisco County. Insurers are still debating whether to appeal. Currently there are around 20 factors that contribute to the auto insurance rates that make up the premiums that you and I pay, however the current controversy is swirling around just one of those factors- your zip code. In the event that the rates were equalized for all zip codes Amador County will see rate increases of around 13.7 to 15 percent per policy.

Calaveras County would see rate increases ranging from 7 to 16 percent, according to opponents of the plan. Critics of the plan have base their argument on studies released by the Department of Insurance - the latest report from Mercer Oliver Wyman Oliver report came out last week - which show 52 of the 58 counties in California will see rate increases. Other likely outcomes according to the report would be: Massive rate increases of 24.1% in Modoc County; 32.2% in Mono County; 36.5% in Imperial County; and 29.0% in Siskiyou County (to name a few) to provide decreases of 1.3% in Orange County; 12.7% in Los Angeles County; and 11.8% in San Francisco County. 

According to Bob Downer, former chief actuary for Farmers Insurance and an independent actuary “I’m just quoting the numbers from the state authorized study … and only four, big urban counties see their rates go down,” he told the Calaveras Enterprise. That’s because there’s a correlation between where you live and what risks you face, said Tully Lehman, a Pleasant Hill-based spokesman for the Insurance Information Network of California, a nonprofit consumer group. Congested, urban areas like Los Angeles have high vandalism, theft and accident rates, creating a greater number of auto insurance claims filed. Lehman said ignoring ZIP codes doesn’t reduce the risk high claim areas have, or costs to insurance companies.

They would just offset losses by increasing premiums in low risk areas, he said. Still, attention to where a driver and their car reside is out of proportion with a 1988, voter-mandated proposition, according to Former Commissioner Garamendi. Part of Proposition 103 dictates that three mandatory factors - driving record, miles driven, and years of driving experience - be given the greatest weight in determining auto rates. During the decade after the initiative was adopted, auto insurance premiums dropped 22 percent statewide, while the rest of the nation’s premiums rose 30 percent, according to reports from the Foundation for Taxpayer and Consumer rights, a consumer watchdog group. The zip code controversy is one area of Prop 103 that has been loosely enforced, and by the late 1990s, the cities of Los Angeles, Oakland and San Francisco, along with consumer groups, engaged in legal battles with former insurance commissioner Chuck Quackenbush. Former Commissioner Garamendi was then approached by these groups after they saw little progress in the fight over the zip code rules. Garamendi made his position clear on this issue, saying in a recent interview that ZIP codes have nothing to do with how well a community drives.“It has everything to do with delivering the mail,” he said.