I have to confess, I’m a sucker for a good insurance story, and a real sucker for anything having to do with Proposition 103.  Between my first and second year of law school, I was a summer associate for the private law firm that defended Proposition 103 when then-Attorney General Dan Lungren essentially refused to help regulate the insurance industry.  I suspect I was of little to no use, though I do recall reading one insurance company’s brief which argued that the company was constitutionally entitled to a forty percent return on investment.  Insurance companies.  Oy.

All of which is by way of introduction to this Chron Op-Ed about John Garamendi’s return to a fair insurance rating system for automobile insurance:

In December 2005, Insurance Commissioner John Garamendi announced his intent to end a “grossly unfair and irrational system” in which companies charge vastly different rates on drivers in neighboring ZIP codes.

Garamendi has come up with a sensible plan to base auto premiums on the three factors designated in Prop. 103: driving record, miles driven and years of driving experience. Insurers could still consider other factors, but their rate formula could not give any criterion more weight than the three factors in the initiative.

Not surprisingly, the insurance industry responded with “a campaign to scare the bejesus out of Californians,” Garamendi said.

One of its main scare tactics is a warning that diminishing the ZIP-code factor will force rural and suburban drivers to pay higher premiums to subsidize drivers in urban areas with greater congestion and higher accident rates.

However, a study by the Department of Insurance showed no statistical justification for ZIP-code pricing across the state. In many cases, in fact, such disparities worked against rural drivers. Garamendi pointed out that rates in Modesto were cheaper than in La Grange, a ghost town 30 miles down the road that has “more jackrabbits than cars.”

This is noteworthy not just for the straight news value and the sensible policy outcome.  What’s really interesting here is the penultimate graf in the quote.  The insurance industry pulled a straight-up Republican move:  pitting the “good” rural folks against the “bad” urbanites.  And just like when the Republicans do it, it’s pure propaganda.

I’m not saying there aren’t real differences between rural and urban communities; there are.  But the differences aren’t as great as people think.  We have more things in common than differences, and the big-money interests who are trying to divide us don’t mean anyone well.