The inconsistency found in auto insurance will finally be modified. The gathering of signatures will begin this week. It will all be about the initiative which is planned to be carried out for the 2010 ballot. This will give consumers more benefits like expanded discounts and much cheaper premiums for auto insurance. This will affect millions of Californian policyholders who have a regular auto insurance coverage in effect.

Currently, the law provides insurance providers the prerogative to give their policyholders a discount for having a continued auto insurance coverage from their company. This is otherwise known as the loyalty discount. However, as the name implies, this discount will not be applicable once the customer decides to switch from one provider to another.

The modification gives rise to the Continuous Coverage Auto Insurance Discount Act, which will guarantee drivers a fixed discount on their automobile insurance, even if they do not decide to maintain under a certain company and transfer their coverage to another insurance provider. The question here are the beneficiaries. Definitely, it will be the consumers. Statistics show that about eighty-two percent of drivers from California have auto insurance that is required by the law. The people here come from a variety of groups like single parents, elderly, working families, and young drivers.

If allowed to offer the same kind of discounts to all policyholders, the insurance companies can make the nature of the auto insurance market more competitive. To keep the flow of new policyholders going, the different insurance providers would have to lower the prices of their premiums. In addition, this will also have to include a better plan and coverage with added improvements in customer service.

In fact, California is lagging behind in terms of this law. Several other states actually allow different insurance companies to offer this kind of discount to those prospective policyholders or those already with the company beforehand. Included in the areas that support this kind of law are New York, Texas, Oregon, Florida, Washington, and several other more.

Insurance companies will also be required to maintain the main basis by which insurance rates are determined. These are the safety record of the driver, annual mileage, and experience. In addition, the older discounts such as the student discounts and good driver discounts will continue to be in effect.

Several organizations are rallying this change. Such organizations like Consumers Coalition of California, California Alliance for Consumer Protection, and California Black Chamber of Commerce to name a few are supporting it. Ultimately, it will result to lower prices for everyone.

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