Insurance Rate Notice of Increase

by R. Stempler Esq.    Personal Injury & Lemon Law Consumer Lawyer-Protecting CA consumers since 1997.   Because Personal, and the right thing to do!

Question: I just received notice that my insurance company will be increasing my automobile insurance policy.  I made a claim after being rear-ended by a driver who was not paying attention.  I was not at fault.  Can they force me to pay a higher premium on my auto insurance policy?

Answer:  No.   Proposition 103, which California voters passed in 1988 (thanks to great organizations like Consumer Watchdog) prohibits insurance surcharges being imposed by an insurance company following an accident in which the driver was not at fault.  Proposition 103 protects each of us, as a consumer.  Prop 103 is a wonderful pro-consumer protection law.

The insurance company is also prohibited from cancelling or refusing to renew an insurance policy, except for the following reasons: (1) failure to pay the premium, (2) fraud or misrepresentation related to the policy, or (3) “a substantial increase in the hazard insured against.”  This is also thanks to Prop 103.

If your insurance company sends you or other consumers a notice that violates your rights under Prop 103, you can file a complaint against them to protect your Prop 103 rights and the rights of others.  According to Consumer Watchdog, a legal action can be prosecuted either before the Cal Department of Insurance or in court.  It may also be possible for a consumer to enlist the help of non-profit organizations to make such a complaint for any violations of Prop 103.

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Lemon Law Buybacks-California

Lemon Law buybacks California Lemon Law Attorney

The California Lemon Law, has several rules that the consumer or small business must follow to complete a successful lemon law buyback of a new motor vehicle.  What is the first rule?  Rule #1: at the first sign of a problem, bring your vehicle to an authorized dealer.  If you are not sure who is an authorized dealership in your area, you can call the customer service phone number listed in your owner’s manual or warranty booklet to find out, but it does not need to be the dealership that sold or leased the vehicle to you.  Any authorized dealer can perform warranty repairs.

Why is this Rule #1?  Because, to get the manufacturer or distributor to buyback a new motor vehicle, you and your lawyer will need to present evidence that the vehicle was or became defective, through no fault of the owner.  This usually requires a paper trail of reasonable repair attempts with an authorized dealer.

Also, under the Song-Beverly Consumer Warranty Act (California’s version of the “Lemon Law” that is most important to consumers and businesses for vehicle problems), the manufacturer is allowed to deduct for mileage on the vehicle before the first repair attempt.  For example, if a vehicle is purchased with 100 miles on the odometer and the consumer follows the advice and brings the vehicle to a dealer when the concern first appears at 1100 miles, the manufacturer is allowed an offset for the 900 miles used by the consumer.  In contrast, if the same consumer waits until 5500 miles, then the manufacturer’s office will be much larger, because it will be based on 5400 miles used.

There is an actual calculation in California’s Lemon Law at Cal. Civil Code, Section 1793.2, Subdivision (d)(2)( C).  To compute the actual offset under this section, take the actual purchase price paid or payable, including transportation charges and factory options, divide that by 120,000 miles, then multiply it by the number of miles when the vehicle was first brought to an authorized dealer for the concern.  Let’s see how this computes using the previous example and assuming a purchase price of $25,000: with 900 miles used, the offset would be $187.50, but with 5400 miles used, the office would be $1125.00, a difference of $937.50.

If you are like many people, a difference of $937.50 out of a $25,000 purchase price is not small change. It might represent two, three or more car payments!  Manufacturers eagerly enforce this offset amount (not always accurately) when they do decide to offer a vehicle buyback.  Even if you are slammed, just bring your vehicle to a dealer as soon as you notice each concern.  That first time, one never knows if it is a random problem or the first repair attempt in a string of efforts to try to fix a defect.

Lemon Law Questions? Call us to schedule your FREE Consultation- We can be reached by phone or by Email.

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