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CA Department of Insurance

Commissioner's Report on Underserved Communities

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Introduction

Welcome to California Department of Insurance Data Analytics and Reporting's webpage for the Commissioner's Report on Underserved Communities.

The Community Service Statement under Title 10 of the California Code of Regulations (CCR) Section 2646.6, has the purpose of addressing the issue of availability of insurance in "underserved" communities and of promoting anti-discrimination so that all have equal access to insurance in California.

The regulations require the California Department of Insurance to collect and analyze data from home, personal auto, commercial multiple peril and commercial fire insurers in California for all ZIP codes, and report on those that are considered as "underserved". However, due to changes in reporting methodology that caused inconsistencies, the commercial data was excluded from this report.

The reports included herein only focused on the lines of business listed below:

1) Line 1- Fire (PersonalLine)
2) Line 4- Homeowners Multiple Peril 
3) Line 19.2 - Private Passenger Automobile Liability
 

The report is a 5-year compilation of "earned exposures" and the number of service offices by individual or group insurer in the "underserved" areas. It measures the percentage that the "underserved" represents to the total for the state.

There are 145 communities in California that are considered "underserved" as defined herein.

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About this Report

This report consists of four tables (Tables A through D):
 

Table A - ZIP Codes in Underserved Communities

This table lists the communities in the state of California, by ZIP code, that fall within the definition of "Underserved" pursuant to Section 2646.6(c)(1)(a-c) of the CCR (see below). All three criteria must be met for a ZIP code to be deemed "Underserved".

Per Section (c) of CCR code 2646.6, a community shall be deemed to be "underserved" by the insurance industry if the Commissioner finds:

  1. the proportion of uninsured motorists is ten percentage points above the statewide average as reflected in the most recent Department of Insurance statistics regarding the statewide average of uninsured motorists; and
  2. the per capita income [1] of the community, as measured in the most recent U.S. Census, is below the fiftieth (50th) percentile for California; and
  3. the community, as measured in the most recent U.S. Census, is predominantly minority. Predominantly minority community can be qualified as any community that is composed of two-thirds or more minorities as those groups are defined in subsection (b) (6) (A) through (D) of CCR Section 2646.6.

The Department identified 145 ZIP codes that were "Underserved" based on the criteria above.


Table B - Summary Statistics

The purpose of this table is to summarize the number of earned exposures statewide and in the "underserved" communities for each of the experience years involved, for Real and Personal Property and for Private Passenger Automobile Coverage.

Table C - Number and Percentage of Total Earned Exposure per Company

The purpose of this table is to provide the total earned exposures, statewide and in the "underserved" communities, per company, for each of the experience years involved, including the percentage of total earned exposures in the "underserved" communities to statewide data. This report represents roughly 99% of the insurance market for the lines of business considered under the Community Service Statement. This table is comprised of two sections, with one section for each category of insurance business - real and personal property and private passenger auto. Each section consists of aggregate totals for the 5 experience years and reports the coverages that were written by the company (listed alphabetically).

Table D - Service Office Data per Company

The purpose of this table is to provide the number of service offices per company in California and in the "underserved" communities, for each of the experience years involved, including the percentage of service offices in the "underserved" communities to statewide data. The table lists the companies alphabetically and reports the largest number of service offices reported under the lines of business considered in the Community Service Statement for each business type - personal and/or commercial.  The total number of service offices shown in this report refers to the number of sales/marketing, claims offices and agencies a company had in the year reported.  Note that a service office can manage both business types and that a service office can represent multiple individual companies within the same parent company.
 

Data Differences

Any data differences from year to year can be attributed, but not limited to the following:

  • companies' confirmation of the increase/decrease in business that consequently changed their marketing strategies as far as the total number of service offices/agencies is concerned
  • discontinuance of a particular business line/program or if a book of business was in run off
  • addition of a business line from one year to the other
  • a group submission with an additional (or deletion) company's data for a particular experience year

It is important to note that the number of agencies will differ greatly between companies due to the different marketing techniques that each company incorporates, namely: captive, independent, and direct marketing/use of brokers. For those companies that write business using the direct marketing/brokerage approach, no agency data is found in this report.

Important Terms and Insurance Coverages Provided

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Conclusion

Communities that are considered "underserved" are with no or little insurance protection. Absence of or inadequate insurance protection can be detrimental to people's lives. To ensure that all individuals and families, as well as businesses or organizations get the insurance protection they need against the adverse financial consequences of losses is one of the goals of California Department of Insurance. California Code of Regulations (CCR) Section 2646.6 paves the way for the department in its strong mission to continually identify these "underserved" communities, so they too, can acquire the insurance protection they need.

This report cannot address the issue as to why some people do not have insurance. It is up to the community, insurance industry and the Department to make sure adequate coverage can be made available to all people. However, with this report, it is with hope that it can continue to encourage the insurance industry to invest and to make insurance accessible in the"underserved" communities, while the California Department of Insurance, continues with its utmost goal of trying to educate and help everyone benefit from the protection and the peace of mind that insurance can offer.

Below are examples of how the department and the State tackled or is dealing with the "underserved"communities:

What have the California Department of Insurance (CDI) and the State done or is still doing to address these "underserved" or uninsured communities?

1) California Low Cost Automobile Insurance (CLCA) Program was established by the Legislature in 1999 and exists pursuant to California Insurance Code Section 11629.7 as a program designed to provide income eligible persons with auto liability insurance protection at affordable rates as a way to meet California's financial responsibility laws.

On December 10, 2007, the program became available in all 58 counties of the state. The California Department of Insurance has an aggressive public relations campaign, including a new website at www.mylowcostauto.com and paid advertising and related publicity in targeted areas.

2) COIN (California Organized Investment Network ) was established in 1999 and is a collaborative effort among the California Department of Insurance, the insurance industry and the community. Its goal is to provide leadership in increasing insurance industry investment in "underserved" and rural communities throughout California. It has its shares of successes with insurance companies investing in California urban and rural communities with low-income families.

3) In January 2012, the formation of an Insurance Diversity Task Force was made to consider and make recommendations about diversity in the insurance industry. One of the missions is to identify and promote insurance companies that are actively engaged in diversity issues. This is in connection to the Assembly Bill 53 that was signed into law and requires insurers to report to the California Insurance Commissioner their procurement efforts with minority, women and disabled veteran-owned businesses. It was noted in this Bill that it is in the state's interest to encourage competitive business opportunities for all of its people.

Contact Information

Any questions or comments regarding the methodology of the data collection presented in this report may be forwarded to:
 

Luciano Gobbo
Division Chief
Data Analytics and Reporting
e-mail: Luciano.Gobbo@insurance.ca.gov
 

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[1] Per capita income was estimated by Western Economic Research.

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