California Revises Proposed Mileage Verification Regulations

The California Department of Insurance has revised its proposed “odometer verification” regulations, deleting provisions that would have authorized insurers to require agents to verify the mileage if they met in person with an applicant or policyholder.

As revised by CDI, the proposed regulations would permit insurers to request “reasonable information” to support whatever estimate an applicant or policyholder has provided an insurer for the 12 months following policy inception or renewal. “Reasonable information” is defined to include the location of work, school or other destination if the vehicle is used for commuting purposes and the number of miles driven for work, number of days per week the vehicle is used for commuting, estimated mileage for pleasure or other uses, the approximate mileage driven the previous 24 months, the reason for any differences between the estimate given for the upcoming 12 months and the mileage driven the previous 12 months, the current odometer reading, and the approximate date the vehicle was acquired.

If the consumer failed to provide estimated mileage, and the “reasonable information” defined above, or if the information provided does not support the estimated mileage, an insurer would be permitted to use its own reasonable estimate or a default figure filed with and approved by the commissioner.

As originally proposed, the regulations would have permitted insurers utilizing the independent or captive agency delivery systems to require their agents to verify odometer readings if the applicant or policyholder “meets with an agent in connection with the insurance application.”

That provision, which was the subject of significant criticism from Insurance Brokers and Agents of the West in testimony submitted in June, has been deleted from the revised set of proposed regulations.

“The Commissioner has substantially improved these proposed regulations,” said IBA West General Counsel Steve Young. “We are especially relieved to see he has deleted the provisions that would have permitted insurers to require agents to verify odometer readings.”

The Department is now accepting public comment on the proposed revisions. The deadline for submission of comments is July 14. Another public hearing is not planned.

To view the proposed revisions, visit: http://www20.insurance.ca.gov/epubacc/REG/83909.htm.

Source: IBA West