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Get the Facts about the Insurance Industry-Backed Prop 33

When has an Insurance Executive Spent Millions to Save You Money?

The ballot initiative sponsored and funded by the chairman of Mercury Insurance, George Joseph, appears to promise drivers modest insurance discounts. However, the Mercury initiative would actually surcharge millions of drivers in ways that are currently illegal and raise premiums for all drivers because it would create more uninsured motorists on the road.

 The initiative:

  1. Allows insurance companies to raise auto insurance prices up to $1,000 a year for customers who didn’t have auto insurance at some point in the past five years, even if they weren’t driving or didn’t have a car.
  2.  Hurts Californians who dropped coverage while in college or temporarily gave up their cars for mass transit, walking, or riding a bike instead of driving.
  3. Punishes the unemployed, who would be subject to the same high surcharge after 18 months without insurance; this unaffordability could force them to drive without insurance, even prevent their re-entry into the job market.
  4. Will lead to higher Uninsured Motorist premiums for all insured drivers.

The Mercury Surcharge Initiative says one thing, but does another.

Mercury Insurance says the initiative is simply to allow companies to hand out discounts to some customers.  But why would an insurance CEO spend millions just to save his customers money?  The Mercury Surcharge actually guts a key consumer protection.  It weakens reliance on a driver’s safety record when setting rates and imposes a penalty—even on drivers with a perfect safety record—for being uninsured for a little as 90 days over five years.

Who Does the Mercury Surcharge Target?

  • The laid-off worker.   If the unemployed cannot afford insurance for 18 months or more, they would be surcharged when getting back on their feet. Reinstating car insurance may be unaffordable with the surcharge, threatening their ability to keep a new job.
  • Senior citizens. A senior who wisely stops driving for a few months after surgery or while staying with relatives would be penalized when she shops for new insurance coverage.
  • Any family suffering from the recession. Those whose coverage was canceled due to mortgage strain or other financial stress may find it impossible to renew.
  • Public transit users. People who temporarily gave up a personal car for car sharing, taking the train or biking to work would face surcharge shock when they need car insurance again.
  • College students. Students who were away at college and didn’t need or couldn’t afford a car would be penalized when they graduated and needed a car to enter the workforce.
  • All first-timers. Everyone buying auto insurance for the first time would pay the Mercury Surcharge in addition to the already higher premiums for new drivers.

If the Mercury Surcharge passes, there will be more uninsured drivers, raising premiums for all drivers. It would be a big step backward for consumer protection, and for a state that has seen a sharp climb in insurance coverage since voters passed auto rate regulation in 1988.

Click here to read more about why Prop 33 will be harmful to all Californians.




About Consumer Watchdog Campaign
The Consumer Watchdog Campaign (CWC), which was formerly the Campaign for Consumer Rights (CCR), a California-based nonprofit 501(c)(4) organization, is the advocacy and campaign affiliate of Consumer Watchdog. CWC and its campaign committee, Election Watchdog, were organized to protect consumers' interests in the ballot initiative and legislative process. We do not take positions on candidate elections.


Over the years CWC has co-sponsored ballot propositions on energy deregulation and HMO reform. It has fought corporate efforts to weaken the legal rights of consumers and has successfully campaigned to preserve some of the nation’s toughest municipal conflict of interest laws. Donations to CWC are not tax deductible.


View previous campaigns and projects of the Consumer Watchdog Campaign.


CWC is chaired by nationally recognized consumer advocate and author of insurance reform Proposition 103, Harvey Rosenfield. Also on its board of directors is consumer activist Jamie Court, author of The Progressive's Guide to Raising Hell. Rosenfield founded CCR's affiliate Consumer Watchdog, and Court currently serves as Consumer Watchdog's president.