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Editorial: Where did biker QB's 'freedom' get him

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Editorial

Editorial: Where did biker QB's 'freedom' get him?

06/16/2006

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Ben Roethlisberger is home today, after spending much of the week laid up in a Pittsburgh hospital with a broken nose, fractured upper and lower jaws, several fractured facial bones and a series of head lacerations. Hard as it may seem, Roethlisberger is lucky.

For those of you who are not sports fans, Roethlisberger is the hero of last year's Super Bowl, the young quarterback who led the Pittsburgh Steelers to victory, in the process becoming the youngest QB in NFL history to do so.
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Garamendi shows how to beat big bucks

`WE only get to vote every four years; Money votes every day," says a T-shirt often worn these days by disaffected voters tired of special interests buying influence over both state and federal governments.


That's often true in a system where most politicians depend on campaign donations to survive.


But big money was stymied, if narrowly, in at least one key California race this month, as state Insurance Commissioner John Garamendi won the Democratic nomination for lieutenant governor by about 6 percent over termed-out state Sen. Jackie Speier of San Mateo County. He overcame a last-month advertising blitz paid for by insurance companies unhappy over a key regulatory change he plans to make later this year.


The change: As called for by the 1988 Proposition 103 insurance reform initiative, Garamendi will eliminate ZIP codes where drivers live as the key factor in their car insurance rates. Instead, drivers' own records will become the most important pricing factor, with their home address then being far less important.


Garamendi clearly knew his planned rule change could throw a monkey wrench into his hopes of becoming lieutenant governor upon being termed out of his present job this year. "No one else has tried to do this, because everyone knows it's a political buzz saw," he said in an interview before the campaign began. "But it's what the law requires, and I'm going to do it anyway."


Garamendi did not make the change in his first term as insurance czar during the early 1990s because he had to spend much of his time in court defending the very existence of Proposition 103, which also rolled back most insurance prices. Later, while insurance industry pet Chuck Quackenbush was commissioner in the mid- and late-1990s, he never even considered a change. That left it up to Garamendi when he resumed the office almost four years ago, and he finally decided to act.


Changing the significance of ZIP codes in insurance pricing risked more than insurance company ire. The very idea infuriates many rural residents, who figure they face far less traffic congestion than city people, thus making their risk of accident and car theft less. Of course, it that's true, their driving and theft claim records should also be cleaner than those of urbanites, thus assuring them low rates even under the new system.


But it wasn't rural drivers who raised millions to attack Garamendi. It was insurance companies,



which put more than $2 million into a series of "issue" ads attacking him.


Garamendi did not fold under the pressure, unlike in 2003, when he first declared he would not run for governor as a recall replacement candidate, then said he would, and finally ran for cover as he pulled out under pressure from fellow Democrats within hours of announcing he would run.


In a classic example of smart politicking this spring, Garamendi turned on his attackers. "Blackmail!" he cried. "There was a threat made to me to back off or else," he said. "A $2 million negative campaign would be released against me if I persisted with the rule change. That is blackmail. That is extortion, and it may very well be an attempt to bribe me."


His outcry won him far more media attention and public note than the ads would ever get. They also fortified his reputation as a straight shooter, which he will need in the fall campaign against another blunt veteran politico, termed-out Republican state Sen. Tom McClintock of Ventura County.


The anti-Garamendi campaign was funded by five insurance companies: Farmers, 21st Century, State Farm, Safeco and Allstate. Their ads began airing in early May primarily in rural counties.


The insurance companies sounded a lot like automakers that automatically oppose any toughening of smog regulations and invariably claim improvements are impossible or at least impossibly expensive. Insurance firms claimed Garamendi's change would be unfair to rural residents. Their real, but unspoken, objection is just like that of the carmakers, namely that they would have to change some of their procedures, and this might cost them a bit of money.


But the primary election results make it clear this is one big-money campaign that failed. In fact, all it apparently did was raise public consciousness of rural rancher Garamendi, who easily beat two prominent state senators from the San Francisco Bay.

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Rental Car Confusion: Do Consumers Really Need the Collision Damage Waiver

PEMCO's Northwest Insurance Poll reveals almost a quarter of Washington drivers buy additional insurance coverage they might not need

SEATTLE, June 12 -- One out of five Washington drivers might be wasting money by purchasing the additional Collision Damage Waiver (CDW) offered by rental car companies, according to PEMCO's latest Northwest Insurance Poll.

"Almost half of Washington drivers rented a car for personal reasons in the past three years," said Jon Osterberg, PEMCO's spokesperson. "Of those drivers, 20 percent bought additional rental car insurance coverage they might not have needed."

The drivers who purchased the CDW might have already been covered either by their existing auto insurance policy or by a credit card company, noted Osterberg.

Still, additional rental-car coverage is entirely appropriate for some people and situations, depending on their existing coverage and their tolerance for risk.

Under most auto insurance policies, coverage carries over to a rental car, provided the car is driven within the United States, the driver is authorized by the rental car company to drive the car, and it is driven under temporary circumstances.

"While most auto insurance policies will cover physical damages incurred while renting a car, it's important that consumers contact their insurer to verify coverage," said Osterberg. "In most cases, the limits on their policy carry over to a rental car. For example, if they don't have collision coverage on their regular policy, they aren't covered for a collision in a rental car."

Many consumers are surprised to learn they also have collision protection through their credit card company. Most major credit card companies automatically provide rental car protection if the entire transaction is completed with a credit card.

"The intent is to provide supplemental insurance that augments consumers' existing auto insurance coverage," said Osterberg.

In most cases, for the credit card coverage to be activated, consumers must decline the CDW offered by the rental car company, and the car must be rented under the name of the cardholder. Most credit card companies limit the rental car period to 15 consecutive days or less.

According to Osterberg, consumers who have collision coverage on their auto policies have already carefully decided how much risk of out-of-pocket loss they can afford: it's the deductible amount they chose.

"Buying a CDW is like agreeing to a temporary increase in insurance costs in exchange for zero risk of losing out-of-pocket money," said Osterberg. "Since CDWs are priced on a per-day rate, it might not seem like very much money. Yet most people would balk at paying $3,650 per year to add a limited amount of coverage to one car, and that's how much a $10 per day CDW would cost if annualized.

"We don't want people driving rental cars without insurance coverage," said Osterberg. "At the same time, it's wasteful to buy coverage you might not need. Consumers can save money and relax on vacation by verifying their existing coverage before they leave."

When should consumers buy the CDW?
-- The CDW is especially helpful when traveling in a foreign country.
Most auto insurance policies will not cover damages incurred outside of
the United States. In addition, not all credit card companies will
cover rented cars outside of the country.
-- Because Hawaii is a "no-fault insurance" state, damage to a rental car
is always the responsibility of the renter. Claims must be paid before
you leave Hawaii, unless you've purchased the CDW.
-- If there's a collision, rental car companies often charge for loss of
use that covers revenue they would have received had the car been in
service, and they also charge for the related "administrative fees."
Those charges can be costly and add up quickly. Most auto insurance
policies don't cover loss-of-use charges.
-- Some rental car companies charge for other-than-collision losses.
Depending on the rental agreement, charges may be assessed to the
driver.


Consumers also should remember that, aside from limited coverage for clothing and luggage, personal belongings inside a rental car typically are not covered by any auto insurance policy, noted Osterberg.

According to the PEMCO Northwest Insurance Poll, 43 percent of Washington drivers have rented a car for personal reasons within the past three years. Of the drivers who typically don't buy the CDW:

-- 88 percent report they don't buy the additional CDW because they rely
on their existing car insurance.
-- 9 percent say they don't purchase the CDW because it's too expensive.
-- 9 percent say they rely on their credit card company for coverage.
-- 6 percent say they won't get into an accident and won't need the
coverage.


Consumers who want to compare their answers to the PEMCO Northwest Insurance Poll results can do so by visiting www.pemco.com.

About the Poll

PEMCO Insurance commissioned the independent, statewide survey that asked Washington homeowners several questions about automobiles and other issues.

Informa Research Services Inc. of Seattle conducted the poll. The sample size, 606 respondents, yields an accuracy of +/- 4 percent at the 95 percent confidence level. In other words, if this study was conducted 100 times, in 95 instances the data will not vary by more than +/- 4 percent.

About PEMCO Insurance

PEMCO Insurance, established in 1949, is a Seattle-based provider of auto, home, boat, life, and umbrella insurance to Washington state residents. PEMCO Insurance is sold by community agents throughout the state and through PEMCO offices. For more information, visit www.pemco.com.

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