Prop. 17 Is a Bad Deal for California Motorists

California voters know all about private interest groups who use the ballot initiative process to make a naked grab for power. So they won’t be surprised that one insurance company is trying to pull a fast one over the state’s motorists with its introduction of Proposition 17 on the June ballot. But they should be outraged all the same.

Prop. 17, for which support was funded in part by Mercury Insurance Chairman George Joseph and other company executives, would surcharge drivers, including soldiers, seniors, small business owners and middle-class families who have had a lapse in car insurance coverage for virtually any reason during the past five years.

Under the proposal, people who stopped driving and didn’t need insurance for a time would be required to pay hundreds of dollars more when they sought to restart coverage. Prop. 17 would also allow insurers to charge significantly higher premiums to people who missed just one insurance payment.

The measure would gut a provision of the 1988 insurance reform measure Proposition 103, which prohibits companies from raising rates on people because they did not have auto insurance in the past. It would hurt Californians across the board.

The Attorney General of California agrees. Jerry Brown stated in the official Title and Summary that Prop. 17 would allow insurance company to increase premiums.

Voices criticizing Prop. 17 have been strong. USAA, the national auto insurance company founded specifically to help military personnel, said it cannot support Prop. 17 on the California ballot because of the impact it will have on active duty service members. VoteVets.org, which represents 100,000 veterans and military families, signed the ballot argument against Prop. 17.

Consumer Watchdog’s ballot rebuttal was also signed by former Insurance Commissioner John Garamendi and John Van de Kamp, California’s former Attorney General. Garamendi was the first to win the office of Insurance Commissioner after it was made an elective post by Prop 103. Garamendi delivered $1.2 billion in refund checks during his first term, and successfully defeated an earlier attempt by Mercury to engage in the practices that Prop. 17 would legalize. As Attorney General, Van de Kamp successfully defended Prop. 103 in the courts after insurance companies sued to block the law from taking effect.

Recently, Mercury and its front group CalFAIR/Yes on 17 announced a lawsuit against Prop. 17 opponents over its ballot language wording. That’s a rich irony, coming from a company that, according to public records, has brazenly flouted California law, state regulations and court orders for years.

Now, as the Prop. 17 debate heats up, CalFAIR is preparing to spend tens of millions of dollars in deceptive advertising.

What the group won’t tell you is that one of its goals is to penalize active members of the military by surcharging them while training on a base in another state. That is simply un-American. What reputable company would tax troops for serving our country?

We know the answer to that, because we are not dealing with a reputable company. Internal government documents released last month show Mercury Insurance has a history of discrimination against military personnel and small business owners and the disabled — the list goes on and on.

What’s more, Prop. 17 will make California’s insured drivers pick up the slack for those who the Prop. 17 surcharge prices out of the insurance market. As the Department of Insurance has said, Prop. 17’s financial penalty:

“Discourages [people] from buying insurance, which may add to the number of uninsured motorists and ultimately drives up the cost of the uninsured motorist coverage for every insured.”

The bottom line is the only reason Prop. 17 is on the ballot is because Mercury Insurance executives want to find a new way to cheat good drivers out of fair rates to make more money at the expense of motorists.

Topics California Auto