Billionaire Baron’s Ballot Initiative Spends $2.1 Million
Good Drivers Penalized $1,000/Year
The billionaire insurance baron-backed ballot measure to surcharge millions of California drivers by 40% has released their financial disclosure report according to the California Secretary of State. The ballot measure has reported spending $2.1 million on petition costs, consultants, and office expenses. The ballot measure will reprise the company’s previous effort to enact auto insurance surcharges with Proposition 17, which Californians rejected in June 2010 despite $16 million in deceptive advertising by Mercury.
The filing also revealed that ballot measure is 99.4% funded by Mercury Insurance Chairman George Joseph and 99.956% funded by Mercury if you include Mercury Insurance Agents. In fact 26 out of the 29 donors are directly connected to Mercury Insurance, either as the Chairman or Mercury agents.
The initiative would increase premiums by as much as 40% or more for millions of Californians including students who went away for college, Californians who previously used mass-transit, and the long-term unemployed. Californians who had chosen not to drive for a time and did not need insurance would be surcharged when a new job, move or some other circumstance requires them to buy insurance again. This unfair penalty would punish drivers with premium surcharges that could reach $1,000 a year or more just because they took a hiatus from their automobile.
Raising Rates by $89 Million Before Promising a “Discount”
At the same time that its Chairman is advancing the ballot measure with a promise of alleged discounts, Mercury Insurance is seeking permission from the California Insurance Department to raise its auto insurance rates by $89 million, an average 6% hike for two million Mercury customers. According to a formal challenge of the rate hike by the nonprofit Consumer Watchdog, Mercury wants to use some of the rate hike to cover its donations to politicians and its 2010 ballot measure, as well as to pay off fines levied against the company, which is prohibited by California law. Consumer Watchdog has asked the Insurance Commissioner to deny Mercury’s request for the rate hike.
This is hardly the first time Mercury has faced challenges to its unfair rate hikes and illegal practices. Mercury Insurance has been prosecuted in civil courts for violating the provision of Proposition 103 that it now seeks to override and has faced regulatory scrutiny for a variety of discriminatory practices. In a regulatory filing relating to Mercury's illegal practices, the California Department of Insurance has written:
“Among Department [of Insurance] staff, consumer attorneys, and consumer victims of its bad faith, Mercury has a deserved reputation for abusing its customers and intentionally violating the law with arrogance and indifference."
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