Out-of-State Insurance Ruled Last Recourse Only

Consumers must prove they have exhausted all options before they will be allowed to buy car insurance out of state, a judge in Los Angeles ruled.

With the Tuesday ruling, Superior Court Judge Dzintra Janavs upheld a regulation imposed Friday by the state Department of Insurance to curtail the “skyrocketing” number of people buying insurance in other states.

The new regulation requires that before buying out of the state, consumers must prove they’ve been rejected by the California Automobile Assigned Risk Plan, which provides coverage in almost all circumstances.

The emergency regulation was prompted by reports between the second and third quarters of 1990 that the amount paid to out-of-state insurers was more than $2.75 million, said Insurance Department attorney Dana Brooks.

Under state law, consumers may buy liability coverage from out-of-state carriers when they have been turned down by three firms licensed to do business in California.