No on Proposition 33
It will lead to unfair increases on auto insurance for the most financially vulnerable
The owner of Mercury Insurance, George Joseph, continues to stubbornly try to change the law established by Proposition 103, in order to sell more insurance policies . Two years ago, voters defeated his Proposition 17 and today we recommend doing the same with Proposition 33.
Currently, an insurance company can offer discounts to clients based on the length of time they hold a policy with the company. Proposition 33 allows insurance companies to offer clients these discounts when a new client has been covered by another carrier. The idea is to attract new clients by offering discounts for “continuous coverage.”
The problem is that this undermines the principle established in Proposition 103, wherein premiums are linked to the client’s driving record, age, distance traveled and the like. The new proposition brings into the mix a factor that is not related to the record of the insured person, moving away from weighing risk based on the driver’s record which has saved consumers billons of dollars.
Although the new measure can reduce the premiums paid by drivers, it can also raise them on individuals who have not had auto insurance for a minimum of 90 days within the last five years, with exceptions for those who are unemployed for 18 months or for those in the military.
Basically this means that a person who has been homeless for more than 18 months is going to have to pay for a more costly policy. Or, for example, any individual who doesn’t use a car for whatever reason, be it financial or health-related or simply because he uses public transportation, and therefore doesn’t pay auto insurance, will be penalized with fees not currently permitted when he returns to driving.
We’re concerned that this will increase the cost of insurance for individuals who are financially strapped and the ultimate consequence of this proposition will be more drivers on the streets without insurance.
Joseph, the multimillionaire who has funded this proposition, already tried with Proposition 17 two years to change the law so that Mercury could pull clients away from other insurers. Now he is trying again with Proposition 33.
This is an abuse of the system of initiatives, which was designed to put the brakes on corporate interests.
Proposition 33 is a bad idea that should be defeated in this election as it was two years ago.
