New At-Fault Auto Insurance Requirements for California

By John Cantwell July 22, 2015

The California Department of Insurance (DOI) has provided updated information regarding its California Code of Regulations, 10 CCR § 2632.13(f)(2)(A). The DOI’s position is that insurers evaluating a driver with a previous claims history cannot rely on at-fault determinations in claims history reports unless they take specific steps.

  • For insurers that provide required accident data to an exchange and rely on reports from an exchange that provides fully compliant reports: As of January 1, 2016, insurers will be allowed to rely on such loss underwriting exchange reports without an obligation to reevaluate principally-at-fault determinations made on or before December 31, 2015.
  • For insurers not reporting required accident data to an exchange and not receiving fully compliant reports: As of January 1, 2016, consistent with 10 CCR § 2632.13(f)(1), (3), (4), or (5), insurers must contact the prior carrier or otherwise redetermine fault in a manner consistent with the regulation for every accident that occurred after December 11, 2011. This action must take place before applying any at-fault surcharges for any new or renewal policy with an effective date on or after January 1, 2016.

What it means for companies rating auto insurance in California

For cases involving auto insurance claims where property damage exceeds $1,000 or bodily injury 51 percent at-fault or greater, insurers must choose one of two options before rating. An at-fault indicator must be accompanied by five positive data fields, or the insurer must engage in due diligence with the previous insurer to verify the at-fault status.

What it means for Verisk A-PLUS contributors

To help contributors to the A-PLUS claims history database comply with California Regulation 10 CCR § 2632.13(f)(2)(A), we’ll make minor modifications to our reporting specifications.

When property damage exceeds $1,000 or bodily injury 51 percent at-fault or greater, the California DOI will require companies that report claims for California residents to submit one of these values:

  • D — property damage exceeds $1,000
  • B — bodily injury fault 51 percent or greater

The five yes/no fields below will be added for each contribution. A positive response for all five fields will be required to use the reported claim for rating purposes in California without triggering additional due diligence for the rating insurer.

  1. Determined that the insured driver’s actions or omissions were 51 percent or greater of the legal cause of the accident
  2. Complied with 10 CCR section 2632.13(c)(1-6)
  3. Complied with 10 CCR section 2632.13(d)
  4. Determined that property damage exceeding $1,000 or bodily injury or death resulted from the accident
  5. Determined that the driver was principally at fault for property damage or bodily injury

A-PLUS loss history reports will contain the above five flags plus the at-fault indicator value reported for each claim to assist insurers with their due diligence process.

Questions on the new regulation and contributions can be directed to the Verisk A-PLUS team at APLUSAutoBusinessTeam@verisk.com.

 


John Cantwell

John Cantwell, vice president, Auto Product Management, Verisk Insurance Solutions, is responsible for product management and branding strategy and leading the development and launch of innovative new products. Before joining Verisk, he was vice president of underwriting and product development at AIG Direct/21st Century Insurance.