SAN JOSE -- Dan Karr's new year began with sorrow, but the veteran Silicon Valley hand's new mission in life as an auto-insurance reformer is moving along nicely -- for a 21st-century Don Quixote.
"Tilting at windmills, hah!" he said over breakfast in downtown San Jose recently to talk about his new company, ValChoice.com. "It's probably a good analogy for what I'm trying to do."
Put simply: Karr wants consumers to know how well or badly the auto insurance company they sign up with will treat them, especially after accidents, and he's trying to make a buck at it. After all, Karr is a software engineer and former high-tech executive in Silicon Valley, one of the few places where socially minded businesses don't get laughed out of the board room.
The zeal is still there, though it was a bit subdued after the death of his father in Portland, Oregon, in early February. His father-in-law had died a few weeks before in New Hampshire, where Karr now lives with his wife, Kelly, and their two young children.
"That's not at all how we wanted to start the new year," he said. "When I get home, we hope to start it again with a toast to our fathers -- and then move on with life."
Readers might remember Karr from two previous East Side/West Side columns. First, he was the wiry and speedy Saratoga bicycle commuter I pedalled like hell to keep up with on Bike to Work Day in 2007. Seven years later, after he had suffered a near-fatal collision with a motorist, I interviewed him about "Injured Money," his eye-opening book about the nasty legal fight to get his own health and auto insurance company to cover his medical bills.
When Karr talks about reforming auto insurance, he doesn't mean anything like California's Proposition 103, the sweeping 1988 ballot measure that requires insurance companies to count a motorist's driving safety record, miles driven annually and years of driving experience more than other factors -- such as ZIP code -- when they set auto premiums.
With every state having its own set of regulations, Karr's approach is to rate and compare auto insurers within each state. More savvy insurance-buyers could force change from the bottom up.
"This is a perfect example of how business can take care of a societal issue," Karr said. "This can actually benefit the industry because the companies that perform the best for their customers will have the competitive edge."
Launched in January, ValChoice is an online analytics company that rates auto and home insurance companies on price, actual payments of claims by policyholders, and customer service. He wrote the algorithms that aggregate data on premiums on accident payment records, and he frequently commutes to the New York Public Library to read highly detailed government reports on the industry.
I decided to give ValChoice.com a test drive. For now Karr is offering his basic report on any one auto insurance company free to the public, a $9.95 value. The low-down on my auto insurer, a well-known one, is that it's barely above average. I found a comparison report more satisfying. For $29.95, it rated my company against Karr's three best auto insurers in California. They looked so much better, I almost called them immediately for quotes.
Just to be cautious, I called around for ratings of Karr's work. I found he's so new at this that he's barely on the radar inside or outside of the industry.
"I never heard of the guy. ... He sounds like a lone wolf," said Carmen Balber, executive director of Consumer Watchdog, the nonprofit group behind Proposition 103. But she likes the idea behind ValChoice.
"The concept is that this information he's providing would be incredibly valuable to consumers," Balber said.
In his latest report on the state of the auto insurance industry -- Karr has written for the Huffington Post -- he concluded that the publicly held companies, those traded on Wall Street, "overcharged" their own policyholders by $19 billion from 2011 to 2014. That translates to $243 per insurance policy.
Higher premiums account for some, Karr said, but so does the under-payment of claims for damages and medical expenses filed by accident victims. Karr said publicly held companies are more likely to screw their own clients because, as traded companies, their first duty is to please their stockholders, even if it means denying or delaying payments.
"Consumers have no idea of the level they're getting ripped off," he said. For example, he added, insurance agents for publicly traded insurers often talk accident victims out of filing claims, telling clients that the companies would cancel or hike their premiums. "That's crazy. It has to stop."
So far, the insurance industry hasn't taken much notice of Karr. The Insurance Information Institute in Washington, D.C. did not respond in time for this column.
Still, Karr appears to be attracting a fair amount of notice. Forbes Magazine last year described ValChoice as something akin to Carfax vehicle background reports, saying that Karr's company would help "consumers learn which insurance companies are best at paying claims" and more. Also last year, Karr won the top award and $10,000 from the New Hampshire Social Venture Challenge, a juried competition at the University of New Hampshire.
Silicon Valley can expect to see him again, in April, when he visits to meet with potential investors.
"If there's one place that can get behind an idea like this," Karr said, "this is it."