No on 33
Editorial, RIVERSIDE PRESS-ENTERPRISE
Time does not make a bad idea better. Prop. 33 on the November ballot is a retread of a special-interest measure voters rejected two years ago. The new version deserves the same fate; voters should just say no to Prop. 33.
This ballot measure would let auto insurers give a discount to new customers who have a history of continuous insurance coverage. Drivers whose policies have lapsed for more than 90 days would not qualify for this break, though the measure does provide exemptions for active-duty military members and laid-off workers. Current state law, set by Prop. 103 in 1988, allows insurers to offer loyalty discounts to their own longtime customers, but bans companies from giving “continuous coverage” discounts to drivers who switch from one insurance company to another. The measure is similar to Prop. 17, which voters defeated in 2010.
Prop. 33 purports to offer savings to responsible drivers, and to spur lower insurance prices through greater competition. But this measure is not about rewarding good habits or benefitting consumers. Prop. 33 is an attempt by one company — Mercury Insurance — to gain a competitive advantage over other insurers. And Prop. 33 would get that edge by exploiting the state’s initiative process to create unwise public policy — hardly an agenda worthy of voters’ support.
State law now says that insurers should base auto insurance rates primarily on drivers’ safety records, the number of miles they drive each year and the number of years they have been driving. That approach sets costs to reflect the risk each driver represents. But Prop. 33 would change that formula to insert a discount unrelated to potential risk. Good and bad drivers both would be eligible for a break on rates, as long as they already had insurance coverage. And most of those without current policies would not get the discount, no matter what their reasons for not buying insurance.
Voters should also recognize the perverse policy incentive this measure would create. Insurance companies would have to offset those new discounts somehow, and the most likely option is by charging other drivers more. That approach would make insurance more expensive for drivers who do not have it now — which would undermine the public interest. State policy should encourage all drivers to buy insurance, to avoid the extra costs everyone else pays in collisions with the uninsured. Instead, Prop. 33 would throw new financial obstacles in the path of those who lack insurance.
The pro-Prop. 33 campaign has raised about $8.3 million so far, with $8.2 million of that coming from Mercury Chairman George Joseph. The idea that the head of an insurance company would spend millions of dollars to save drivers money defies all credibility.
No, a different and self-interested agenda drives this measure: poaching lucrative customers from rivals while encouraging less desirable customers to go elsewhere. Californians have no reason to reward that kind of special-interest scheme, and voters should reject Prop. 33.
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9/18/2012ArticleThe politics and the arguments of Proposition 33 are going to seem very familiar. The owner of Mercury Insurance wants to loosen... More >
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8/13/2012News ReleaseCourt Rejects Second Challenge to AG’s Neutral Ballot Language By Insurance Industry Backers of Prop 33Santa Monica, CA – The California Third District Court of Appeal summarily denied an appeal filed by the Mercury Insurance-... More >
8/17/2012News ReleaseLong Term Unemployed Targeted Under Prop 33 For Rate Hikes – NY Times Front Page Report Shows Face of Californians In Crisis Hurt By Ballot MeasureLos Angeles, CA --- A front page story in the New York Times about hundreds of thousands Californians who have been... More >