San Francisco Chronicle Editorial: Prop 33 A Bad Idea that Won't Go Away
San Francisco Chronicle
The politics and the arguments of Proposition 33 are going to seem very familiar. The owner of Mercury Insurance wants to loosen state insurance laws so he can offer more discounts. Consumer activists warn that the change will lead to significant surcharges on new customers.
Yes, this is a replay of Prop. 17, which California voters rejected two years ago.
Here's the core of the issue: Under Prop. 103 (passed in 1988), insurance companies cannot discriminate against new customers simply because they have not had insurance. However, companies are allowed to offer loyalty discounts to their long-term customers.
Prop. 33, a slightly tweaked version of Prop. 17 bankrolled again to the tune of millions by Mercury Chairman George Joseph, would allow companies to offer continuous-coverage discounts to customers they lure from other insurers.
It sounds good on the surface, but here's the hitch: Those modest discounts almost surely would come at the expense of rates on drivers who had not previously been insured. Yes, that could include some deadbeats who were driving without insurance in violation of the law, perhaps because they lost their job or otherwise had a financial crisis. But it also would include people who had a lapse in coverage because they lived in an urban area and did not need a car, or were ill and not driving.
The bottom line is that California's compelling public-policy interest is to make sure that drivers are insured. Keeping rates affordable advances that goal. Vote no on 33.
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