March 23, 2005

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Palo Alto Online

Palo Alto 94303

by Jocelyn Dong

When Palo Alto residents Louis and Edith Zitelli bought an Explorer SUV in Santa Clara a few years back, the salesman asked for their Zip code. When they gave "94303," he told them they lived in East Palo Alto and would have to pay the San Mateo County sales tax.

No, they countered, we live in Palo Alto.

The salesman didn't believe them, and ended up charging the San Mateo County rate -- which ironically was lower.

The Zitellis' car-buying experience is but one of the peculiarities of living in the 94303 Zip code, which is shared by Palo Alto and East Palo Alto and therefore Santa Clara and San Mateo counties.

The Zip code serves 45,500 residents according to the 2000 Census, includes all of East Palo Alto and parts of Palo Alto stretching from San Antonio Road to Embarcadero, east of Middlefield Road, and then east of Newell Road.

Residents in 94303 have grown accustomed, if not irritated, with dealing with this identity confusion. According to anecdotal accounts, the Zip code's straddling of counties continues to create difficulties for people applying to get insurance for their homes, cars and health -- or simply trying to subscribe to Gentry magazine, which does not deliver to the area.

Mary Carlstead was exasperated when she opened a coupon pack that arrived in the mail and looked at an offer from the Blue Cross insurance company.

"Think you can't afford quality health coverage?" it read. At the bottom, it listed counties for which the "affordable" coverage was available, including Santa Clara County -- "except 94303."

"Why is 94303 excluded? Is this discrimination?" Carlstead asked in an e-mail sent to the city's mayor, city manager and county supervisor.

Separate from the Blue Cross offer, Carlstead has experienced trouble with her own health insurance company, which keeps issuing her a card that says she lives in San Mateo County -- even after she sent them her property-tax bill stating her county of residence, she said.

Similar anomalies occurred when Evan Reade moved from Guinda Street in the 94303 area code to Fulton Street, located a few blocks north of the old residence but within the 94301 area.

When he called his auto insurance company, Reade was told his rates had gone down.

His reaction? "A: That's cool. What a bonus," followed by "B: That's a little strange," Reade recounted. He was, after all, still in the same neighborhood as before.

Reade figures one part of the problem lies in the databases that companies use. His own office, for example, uses a database that identifies only one city per Zip code.

The practice of using Zip codes to determine residency and insurance rates is not a mere annoyance. It has been sharply criticized by several civil rights and consumer groups as a discriminatory practice.

When the state Legislature prohibited race as a factor in setting insurance rates, "they could cross reference demographic characteristics by Zip code. It was one and the same," said Mark Savage, senior attorney with the Consumers Union.

Savage pulled up his database of insurance rates at his San Francisco office to show that homeowners in 94303 are paying different rates than their neighbors.

Complete coverage in 2002 -- including liability, property damage and collision insurance -- was $1,130 a year for 94303, but $100 less for 94301, Savage said.

In Reade's case, the key question is "Am I a different risk than before? The answer is 'no,'" Savage said.

The Consumers Union and other advocacy groups have been trying to get state Insurance Commissioner John Garamendi to close a loophole that allows companies to rank a person's Zip code or other factors as more important than his or her driving record, miles driven per year or safety record. The practice of charging poorer communities higher rates is known as "redlining."

But Tempe Javitz, an agent with State Farm, said her company is aware of the possible discrimination issues and that "we've been trying to be very careful not to be redlining."

Insurance companies do consider metropolitan areas -- and cities closer to them -- as carrying a higher risk, however. Then, too, the usual factors of number of incidents in an area and the severity of them contribute to a locality's insurance rates, she said.

To avoid cases of mistaken identity, the agents ask applicants for both Zip code and county of residence these days, she said.

The irritation over zip code seems to cover both East Palo Alto and Palo Alto residents. In 2002, East Palo Alto residents advocated unsuccessfully for their own Zip code, citing among other things a desire for a separate identity.

Sometimes the mix-up creates unforeseen problems down the road. The Zitellis accepted the different tax rate when they bought their Ford, but the government apparently did not. About a year later, Louis Zitelli said the authorities tracked them down and charged for underpayment of taxes.

"I don't mind sharing a Zip code with another community. What I don't like is being told I don't live in Palo Alto," said Edith Zitelli, a 50-year resident. Senior Staff Writer Jocelyn Dong can be reached at jdong@paweekly.com.

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